Arms giant's blanket immunity faces legal challenge

By staff writers
January 10, 2011

Multinational arms company BAE Systems look set to once again become the focus of legal proceedings with the news that part of its plea bargain with the Serious Fraud Office (SFO) is facing a fresh challenge.

The Campaign Against Arms Trade (CAAT) and The Corner House said today (10 January) that they are challenging the blanket immunity from prosecution given by SFO to BAE in the plea bargain announced in February 2010.

The clause in question states that, “There shall be no further investigations or prosecutions of any member of the BAE Systems Plc group for any conduct preceding 5 February 2010”.

This aspect of the deal triggered sharp words from a judge when the matter came to court in December, although he did not have power to overrule the agreement. Solicitors Leigh Day & Co, acting for the two NGOs, have written to the SFO Director arguing that this clause should be quashed.

They point out that the immunity covers any criminal conduct, including that unrelated to bribery, corruption and serious fraud and including that not disclosed by BAE to the SFO. It is not limited to the alleged bribery that the SFO had been investigating.

This clause became public only when the terms of the settlement agreement were read out in open court on 21 December 2010 by Mr Justice Bean.

In his highly critical judgment of the “loosely and perhaps hastily drafted agreement”, Bean said he was “surprised to find a prosecutor granting a blanket indemnity for all offences committed in the past, whether disclosed or otherwise”.

In exchange for securing this immunity, BAE pleaded guilty to a relatively minor accounting offence in their complex scheme of offshore companies used to pass and make payments relating to its supply of a radar system to Tanzania.

The letter from the NGOs’ solicitors states that “no public prosecutor . . . could properly enter into a settlement agreement guaranteeing immunity in respect of serious criminal offences of which it was entirely unaware.”

They point out that if BAE had disclosed all relevant conduct to the SFO, there could be no reason for the immunity clause. “The inference must be that BAE still has something to hide, of which the SFO is currently unaware,” say the solicitors.

In these circumstances, they add that "it is impossible to understand how the public interest is served” by the “exceptional, unusual and entirely unnecessary" immunity clause.


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