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UK to Prosecute Arms Dealer for Corrupt Practices

October 2, 2009

The UK Serious Fraud Office announced yesterday it would seek to prosecute Europe’s biggest weapons dealer, BAE, for alleged bribery in connection with weapons deals in Tanzania, the Czech Republic, South Africa and Romania.

BAE’s corrupt practices were exposed by the UK Guardian six years ago; the paper’s intense investigation highlighted a deal with the Saudi royal family which grossed 43 billion pounds in revenue for the company. According to the Guardian, BAE established a shill company to funneled bribe payments through Caribbean banks into the accounts of politicians and deal makers throughout the world. In the course of making the Saudi deal, BAE is alleged to have transferred 1 billion pounds and a personal jet to the son of the Saudi crown prince, with another 1 billion pounds transferred to various prominent Saudis.  The Guardian’s and other press reports exposed BAE shady operations in India, Zimbabwe and Qatar in addition to the four countries named by the Fraud office, and ultimately helped bring about the decision to seek prosecution.

The Guardian also published a piece by a former international development secretary who blew the whistle on a 2000 BAE deal backed by the Blair government to sell an unneeded, expensive military air traffic control system to Tanzania, when the country actually needed a civilian system that was available from other companies for much less money.

BAE was created in the 1999 merger of British Aerospace and Marconi Electronic Systems, the military sales arm of British General Electric (renamed Marconi Corporation after the sale of the weapons division). In addition to its status as the EU leader in weapons systems sales, BAE is also the largest foreign player in the US military market.  The U.S. Justice Department is also conducting an investigation of the company’s corrupt practices, but the day before yesterday’s announcement of the UK prosecution, BAE won a $313.3 million Pentagon contract for military “gunner restraints, vehicular safety belt kits and accessories.”

In 2006, BAE announced its plans for “environmentally friendly” munitions, including low-lead bullets, carbon-reduced emissions from armored vehicles, and weaponry with reduced amounts of toxic chemicals.

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