BAE court case must not bury bad news, say NGOs

By staff writers
November 23, 2010

A crucial court hearing involving the multinational arms firm BAE Systems has been timed for 20 December, raising fears that its proximity to Christmas will allow the company to “bury bad news”.

The hearing will allow the confirmation of a “plea bargain” between BAE and the Serious Fraud Office (SFO). The SFO has faced criticism for dropping all investigations into BAE in return for a payout of £30 million and a guilty plea to failure to keep correct accounting records.

BAE has long faced criticism for arming countries around the world, including oppressive regimes such as Saudi Arabia and Indonesia, and countries in conflict with each other, such as Pakistan and India.

The company faces corruption allegations in five continents and has long been accused of undue influence within the UK government.

At a preliminary hearing in Westminster Magistrates' Court today (23 November), magistrate Catherine Tubbs gave permission for settlement to be heard at Southwark Crown Court in London on Monday 20 December.

At this unprecedented hearing a judge will be asked to confirm the final settlement.

The single criminal offence against BAE presented by an SFO lawyer is that, “Between 01/01/1999 and 31/12/2005... an officer of British Aerospace Defence Systems Limited knowingly and wilfully authorised default to be made by the company in that it failed to keep accounting records which were sufficient to show and explain the company's transactions”.

When asked how BAE pleaded to this charge by the magistrate, a lawyer acting for BAE said simply “guilty”, and declined to add anything further.

Prior to the plea bargain announced in February, the SFO had been investigating alleged corruption in BAE's sales to the Czech Republic, Romania and South Africa as well as Tanzania. A corruption investigation into BAE's Saudi arms deals was dropped in December 2006 after the then Prime Minister Tony Blair brought pressure to bear on the SFO.

There was no mention by the SFO in today's hearing of a request by two NGOs to bring to the court’s attention the SFO's apparent undertaking never to prosecute any individual if doing so involves alleging BAE Systems to be guilty of corruption. The Campaign Against Arms Trade (CAAT) and The Corner House had expressed alarm about this issue.

Sarah Sexton of The Corner House said, “We remain deeply concerned about the terms of the plea bargain that the SFO has struck with BAE and hope that all will be revealed in court next month”.

CAAT's Kaye Stearman added, “The hearing date is so close to Christmas that, in the hackneyed phrase, this will be a good day to bury bad news. Yet there is still much about this whole sorry saga that the public deserves to know.”


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