Recent press on BAE corruption scandal
BAE refuses to reveal source of secret email
By Katherine Griffiths, City Correspondent
Last Updated: 8:17am GMT 03/02/2007
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/02/03/cnbae03.xml
BAE Systems has been accused of trying to undermine a judicial review of the axing of the Serious Fraud Office's investigation into alleged corruption by the defence giant in Saudi Arabia.
The company received a confidential email giving legal advice to Campaign Against Arms Trade (CAAT), the pressure group bringing the judicial review but will not disclose how it received the information, a court heard. BAE also threatened through its law firm, Allen & Overy, to seek legal costs from CAAT if it tried to force BAE to reveal how it received the email in a move designed to have a "chilling effect" on the pressure group, its lawyer, Dinah Rose, QC, said.
BAE has said it did not "solicit" the email. Ms Rose said it appeared that BAE was "more deeply" involved. She cited allegations that BAE had a "history of infiltrating CAAT".
advertisement
"There is substantial evidence that between 1995 and as late as September 2003 BAE infiltrated CAAT with a number of secret agents who supplied voluminous reports to BAE," Ms Rose said.
There were reports that BAE spent 120,000 a year on this, Ms Rose added.
In December CAAT said it would seek a judicial review of a decision by the Government that continuing the investigation into BAE's alleged corruption in its 40bn Al-Yamamah contract with Saudi Arabia threatened national security.
As a result of the Government's decision the SFO abandoned its Saudi investigation. It continues to look into its activities in other countries. Last week CAAT said it had discovered that BAE had received one of its confidential documents.
Yesterday it sought an injunction from the High Court in order to get the defence company to explain how it received the document, which it has now said was an email from its law firm, Leigh Day, giving advice on "costs and tactics" over the judicial review.
BAE said yesterday: "Whilst the hearing is ongoing we won't be making any comment." Last week it said: "As we understand it, no allegations of wrongdoing are being made against BAE."
Meanwhile, the SFO continues to investigate allegations of corrupt contracts struck by BAE in South Africa, Tanzania and elsewhere.
Tanzania's president, Jakaya Kikwete, said he would lodge claims against the British Government if it is discovered the price of the air traffic control system that was purchased by his government in 2001 from BAE was inflated.
BAE in court over anti-arms trade leak
By Nikki Tait
http://www.ft.com/cms/s/797a5258-b32b-11db-99ca-0000779e2340,_i_rssPage=34c8a8a6-2f7b-11da-8b51-00000e2511c8.html
Published: February 3 2007 02:00 | Last updated: February 3 2007 02:00
Anti-arms trade campaigners and BAE Systems yesterday faced off in London's High Court, as the former seek a court order which they claim could help reveal how one of their confidential legal documents ended up in the weapon maker's hands.
The Campaign Against Arms Trade says it received a letter from BAE's solicitors last month, which said that the company had been sent the document electronically, that this e-mail was not solicited and that both the company and its lawyers had taken "all reasonable efforts" to destroy any electronic or paper copies of it. However, CAAT is seeking an order that would allow it to probe further into the source of the apparent leak.
But lawyers for BAE argued that, for such an order to be granted, there had to be evidence that the recipient had done more than receive the information and, in some way, had participated in the wrong-doing. A decision will be given next week.Nikki Tait
Goldsmith halted BAE deal on minor charges
** Attorney general denies Number 10 interference
** Lords critical of decision to end fraud investigation
*Rob Evans and David Leigh
Friday February 2, 2007
The Guardian <http://www.guardian.co.uk>*
Lord Goldsmith, the attorney general, yesterday confirmed that the Serious Fraud Office considered offering senior BAE executives a plea bargain in which they would admit relatively minor charges and investigators would drop their potentially embarrassing inquiries.
He denied that he had changed his mind following pressure from Downing Street. However he did not give a detailed explanation of how the offer was vetoed or of his discussions with Downing Street.
The Guardian revealed yesterday that Lord Goldsmith had initially agreed there was enough evidence to make the offer, but, within 48 hours, had blocked it after decisions taken in Downing Street.
Yesterday he was subjected to heavy criticism by peers over the government's decision to kill off the SFO's inquiry into allegations that BAE had bribed Saudi royals.
He told the Lords he had been sceptical for quite some time that there was strong enough evidence to mount any sort of successful prosecution of BAE over the Saudi allegations before the investigation was halted by the government in December.
The Liberal Democrat peer Baroness Williams, who initiated a Lords debate on the inquiry, said the attorney general had been over-ridden unconstitutionally by the prime minister on the idea of offering BAE the bargain.
Lord Dykes, a Liberal Democrat, called the decision to end the SFO investigation a "grotesque farce, an utter and monumental disgrace".
Labour peer Baroness Kennedy said: "We have been told the decision ... was based on diplomacy and security but have not had much evidence that it was about security. It seems that we were really anxious not to offend the Saudi princes, given the mess over Iraq."
Lord Skidelsky, a crossbencher, criticised the attorney general's explanation that the rule of law had to be set aside because the nation's security was at risk, as the Saudis threatened to stop supplying vital intelligence about al-Qaida terrorists. He said that proposition was unacceptable. "You either have the rule of law or you don't. That gives the government licence to break the law whenever it wanted to."
In an interview with the Financial Times, Lord Goldsmith disclosed yesterday what he said was BAE's explanation for operating an alleged 60m slush fund providing luxury holidays, cars and cash for top Saudis. The bills were secretly charged to the official al Yamamah arms contract administered by the Ministry of Defence. The attorney general said that, according to BAE, the Saudi ruling family authorised the payments "at the highest level". As a result, it would have been impossible to prosecute the arms company for corruption.
Lord Goldsmith admitted, however, that this view was disputed by the head of the Serious Fraud Office, Robert Wardle, who was forced to drop his investigation. The attorney general said: "I know the SFO have said something different ... I know [Wardle] took a different view."
He admitted MI5 and MI6 never assessed the Saudis would cut security links as Tony Blair claimed at the time. The "Saudi threats" were not made to the intelligence services. "It was communicated to the government at the highest level." In the Lords, he said the Saudis were "not bluffing".
*Related articles*
16.01.2007: MI6 and Blair at odds over Saudi deals <http://www.guardian.co.uk/Politics/foreignaffairs/story/0,,1991282,00.html>
07.01.2007: Blair faces new challenge over Saudi arms deal <http://www.guardian.co.uk/Politics/economics/story/0,,1984657,00.html>
15.01.2007: BAE's secret $12m payout in African deal <http://www.guardian.co.uk/Politics/foreignaffairs/comment/0,,1990533,00.html>
17.12.2006: Risk to British lives ended Saudi jet probe <http://www.guardian.co.uk/Politics/foreignaffairs/story/0,,1974052,00.html>
06.01.2007: Arms deal investigators probe BAE payments to South African <http://www.guardian.co.uk/Politics/foreignaffairs/story/0,,1983979,00.html>
05.01.2007: Anti-bribery watchdog calls for explanation of BAE decision <http://www.guardian.co.uk/Politics/economics/story/0,,1983311,00.html>
23.12.2006: Fund manager raises alarm over dropping of BAE inquiry <http://www.guardian.co.uk/Politics/economics/story/0,,1978130,00.html>
19.12.2006: OECD to press Blair over BAE inquiry <http://www.guardian.co.uk/Politics/foreignaffairs/story/0,,1975498,00.html>
18.12.2006: Blair pressed to publish secret report on BAE inquiry <http://www.guardian.co.uk/Politics/homeaffairs/story/0,,1974686,00.html>
18.12.2006: Blair told to boost funding for other BAE inquiries <http://www.guardian.co.uk/Politics/foi/story/0,,1974263,00.html>
18.12.2006: Ethics are dead. Long live BAE! <http://www.guardian.co.uk/Politics/economics/story/0,,1974478,00.html>
17.12.2006: Leader: The BAE affair sends all the wrong signals <http://www.guardian.co.uk/Politics/comment/story/0,,1974028,00.html>
Blair forced Goldsmith to drop BAE charges
*David Leigh and Rob Evans
Thursday February 1, 2007
The Guardian <http://www.guardian.co.uk>*
The attorney general, Lord Goldsmith, changed his mind about whether there was enough evidence to bring corruption charges against the arms company BAE after pressure from Downing Street, legal sources have told the Guardian.
In emergency meetings before Christmas, Lord Goldsmith initially agreed with lawyers and prosecutors that the Serious Fraud Office could bring charges against the former head of BAE Sir Dick Evans.
The allegations involved backdoor gifts to the then head of the Saudi air force, Prince Turki-bin-Nasser.
Having reviewed the SFO's files, Lord Goldsmith agreed that BAE could, in effect, be offered a plea bargain in which investigators would drop further potentially politically embarrassing inquiries if the company agreed to plead guilty to these relatively minor charges.
But within 48 hours the agreement was countermanded after decisions taken in Downing St, Whitehall sources said.
The director of the SFO, Robert Wardle, was forbidden to make the approach to BAE. Instead the attorney general told parliament the entire Saudi investigation was to be halted, and that there was insufficient evidence for it to succeed.
Lord Goldsmith also said in the Lords that MI5 and MI6 believed national security was in danger. The heads of the agencies have refused to endorse his claim.
The attorney general is supposed to act in an impartial, quasi-judicial role, to protect the public interest. But since the prime minister's elevation of Lord Goldsmith to the post in 2001, he has caused increasing controversy.
Writing in the Guardian today, the human rights lawyer Lord Lester calls for Lord Goldsmith to be stripped of his political powers. The Lib Dem peer criticises his conduct in three key "political" cases: the BAE inquiry; his Iraq advice, where it also emerged that he had changed his mind under political pressure; and the cash-for-honours police inquiry. The government's reputation has been harmed by "weaving and ducking, buck-passing and hand-wringing", Lord Lester says, and the scandal of Lord Goldsmith's halting of the BAE investigation has "gravely eroded public confidence in the government's integrity".
The attorney general's conduct is likely to be the subject of attacks by other Lib Dem peers in the Lords today. The veteran former Labour minister Shirley Williams has called for a debate on his responsibility for preserving the rule of law.
The SFO initially assembled evidence on the Prince Turki aspect of their Saudi case with the close involvement of a senior fraud barrister, Timothy Langdale QC, who regularly acts for the government as Treasury counsel.
The legal view was that adequate evidence existed to bring charges and to open a Crown case against BAE in court, although their defence to the allegations has so far never been heard.
Yesterday BAE said the suggestion there was enough evidence "directly contradicts the position of the attorney general and the SFO". They stressed that Lord Goldsmith had said: "I consider, having carefully examined the present evidence, that there are obstacles to a successful prosecution so that it is likely that it would not in the end go-ahead."
Asked whether Sir Dick Evans and the company denied making payments to Prince Turki, BAE said: "The fact that we have not commented specifically on any statements made by the Guardian should not be taken as any kind of admission."
The SFO refused to comment last night, but Lord Goldsmith's office said: "The decision to discontinue the [Saudi] investigation was made by the director of the SFO ... The final decision was his alone. The prime minister gave his views on the national security implications.
"Having considered the full public interest case the SFO concluded that pursuing the case, either as a full investigation or on some more limited basis, created the same risk to national and international security. In view of those risks to national and international security the director of the SFO decided to halt the case."
On Tuesday, Tories and Lib Dems also attacked ministers in the Commons over alleged BAE corruption in government-backed arms sales to Tanzania. Disclosures in the Guardian that the company made secret payments of $12m (6m) into a Swiss bank account to seal the deal were not disputed by the international development secretary, Hilary Benn. He said: "Those matters are the subject of investigation by the Serious Fraud Office".
His cabinet predecessor, Clare Short, told MPs: "The police came to see me and said they have the documents showing that it was bribery." She said it was time to end the "deep culture" within government which "sees it as their duty to push all arms sales deals". BAE deny wrong-doing in the Tanzania deal.
BAE refuses to reveal source of secret email
By Katherine Griffiths, City Correspondent
Last Updated: 8:17am GMT 03/02/2007
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/02/03/cnbae03.xml
BAE Systems has been accused of trying to undermine a judicial review of the axing of the Serious Fraud Office's investigation into alleged corruption by the defence giant in Saudi Arabia.
The company received a confidential email giving legal advice to Campaign Against Arms Trade (CAAT), the pressure group bringing the judicial review but will not disclose how it received the information, a court heard. BAE also threatened through its law firm, Allen & Overy, to seek legal costs from CAAT if it tried to force BAE to reveal how it received the email in a move designed to have a "chilling effect" on the pressure group, its lawyer, Dinah Rose, QC, said.
BAE has said it did not "solicit" the email. Ms Rose said it appeared that BAE was "more deeply" involved. She cited allegations that BAE had a "history of infiltrating CAAT".
advertisement
"There is substantial evidence that between 1995 and as late as September 2003 BAE infiltrated CAAT with a number of secret agents who supplied voluminous reports to BAE," Ms Rose said.
There were reports that BAE spent 120,000 a year on this, Ms Rose added.
In December CAAT said it would seek a judicial review of a decision by the Government that continuing the investigation into BAE's alleged corruption in its 40bn Al-Yamamah contract with Saudi Arabia threatened national security.
As a result of the Government's decision the SFO abandoned its Saudi investigation. It continues to look into its activities in other countries. Last week CAAT said it had discovered that BAE had received one of its confidential documents.
Yesterday it sought an injunction from the High Court in order to get the defence company to explain how it received the document, which it has now said was an email from its law firm, Leigh Day, giving advice on "costs and tactics" over the judicial review.
BAE said yesterday: "Whilst the hearing is ongoing we won't be making any comment." Last week it said: "As we understand it, no allegations of wrongdoing are being made against BAE."
Meanwhile, the SFO continues to investigate allegations of corrupt contracts struck by BAE in South Africa, Tanzania and elsewhere.
Tanzania's president, Jakaya Kikwete, said he would lodge claims against the British Government if it is discovered the price of the air traffic control system that was purchased by his government in 2001 from BAE was inflated.
BAE in court over anti-arms trade leak
By Nikki Tait
http://www.ft.com/cms/s/797a5258-b32b-11db-99ca-0000779e2340,_i_rssPage=34c8a8a6-2f7b-11da-8b51-00000e2511c8.html
Published: February 3 2007 02:00 | Last updated: February 3 2007 02:00
Anti-arms trade campaigners and BAE Systems yesterday faced off in London's High Court, as the former seek a court order which they claim could help reveal how one of their confidential legal documents ended up in the weapon maker's hands.
The Campaign Against Arms Trade says it received a letter from BAE's solicitors last month, which said that the company had been sent the document electronically, that this e-mail was not solicited and that both the company and its lawyers had taken "all reasonable efforts" to destroy any electronic or paper copies of it. However, CAAT is seeking an order that would allow it to probe further into the source of the apparent leak.
But lawyers for BAE argued that, for such an order to be granted, there had to be evidence that the recipient had done more than receive the information and, in some way, had participated in the wrong-doing. A decision will be given next week.Nikki Tait
Goldsmith halted BAE deal on minor charges
** Attorney general denies Number 10 interference
** Lords critical of decision to end fraud investigation
*Rob Evans and David Leigh
Friday February 2, 2007
The Guardian <http://www.guardian.co.uk>*
Lord Goldsmith, the attorney general, yesterday confirmed that the Serious Fraud Office considered offering senior BAE executives a plea bargain in which they would admit relatively minor charges and investigators would drop their potentially embarrassing inquiries.
He denied that he had changed his mind following pressure from Downing Street. However he did not give a detailed explanation of how the offer was vetoed or of his discussions with Downing Street.
The Guardian revealed yesterday that Lord Goldsmith had initially agreed there was enough evidence to make the offer, but, within 48 hours, had blocked it after decisions taken in Downing Street.
Yesterday he was subjected to heavy criticism by peers over the government's decision to kill off the SFO's inquiry into allegations that BAE had bribed Saudi royals.
He told the Lords he had been sceptical for quite some time that there was strong enough evidence to mount any sort of successful prosecution of BAE over the Saudi allegations before the investigation was halted by the government in December.
The Liberal Democrat peer Baroness Williams, who initiated a Lords debate on the inquiry, said the attorney general had been over-ridden unconstitutionally by the prime minister on the idea of offering BAE the bargain.
Lord Dykes, a Liberal Democrat, called the decision to end the SFO investigation a "grotesque farce, an utter and monumental disgrace".
Labour peer Baroness Kennedy said: "We have been told the decision ... was based on diplomacy and security but have not had much evidence that it was about security. It seems that we were really anxious not to offend the Saudi princes, given the mess over Iraq."
Lord Skidelsky, a crossbencher, criticised the attorney general's explanation that the rule of law had to be set aside because the nation's security was at risk, as the Saudis threatened to stop supplying vital intelligence about al-Qaida terrorists. He said that proposition was unacceptable. "You either have the rule of law or you don't. That gives the government licence to break the law whenever it wanted to."
In an interview with the Financial Times, Lord Goldsmith disclosed yesterday what he said was BAE's explanation for operating an alleged 60m slush fund providing luxury holidays, cars and cash for top Saudis. The bills were secretly charged to the official al Yamamah arms contract administered by the Ministry of Defence. The attorney general said that, according to BAE, the Saudi ruling family authorised the payments "at the highest level". As a result, it would have been impossible to prosecute the arms company for corruption.
Lord Goldsmith admitted, however, that this view was disputed by the head of the Serious Fraud Office, Robert Wardle, who was forced to drop his investigation. The attorney general said: "I know the SFO have said something different ... I know [Wardle] took a different view."
He admitted MI5 and MI6 never assessed the Saudis would cut security links as Tony Blair claimed at the time. The "Saudi threats" were not made to the intelligence services. "It was communicated to the government at the highest level." In the Lords, he said the Saudis were "not bluffing".
*Related articles*
16.01.2007: MI6 and Blair at odds over Saudi deals <http://www.guardian.co.uk/Politics/foreignaffairs/story/0,,1991282,00.html>
07.01.2007: Blair faces new challenge over Saudi arms deal <http://www.guardian.co.uk/Politics/economics/story/0,,1984657,00.html>
15.01.2007: BAE's secret $12m payout in African deal <http://www.guardian.co.uk/Politics/foreignaffairs/comment/0,,1990533,00.html>
17.12.2006: Risk to British lives ended Saudi jet probe <http://www.guardian.co.uk/Politics/foreignaffairs/story/0,,1974052,00.html>
06.01.2007: Arms deal investigators probe BAE payments to South African <http://www.guardian.co.uk/Politics/foreignaffairs/story/0,,1983979,00.html>
05.01.2007: Anti-bribery watchdog calls for explanation of BAE decision <http://www.guardian.co.uk/Politics/economics/story/0,,1983311,00.html>
23.12.2006: Fund manager raises alarm over dropping of BAE inquiry <http://www.guardian.co.uk/Politics/economics/story/0,,1978130,00.html>
19.12.2006: OECD to press Blair over BAE inquiry <http://www.guardian.co.uk/Politics/foreignaffairs/story/0,,1975498,00.html>
18.12.2006: Blair pressed to publish secret report on BAE inquiry <http://www.guardian.co.uk/Politics/homeaffairs/story/0,,1974686,00.html>
18.12.2006: Blair told to boost funding for other BAE inquiries <http://www.guardian.co.uk/Politics/foi/story/0,,1974263,00.html>
18.12.2006: Ethics are dead. Long live BAE! <http://www.guardian.co.uk/Politics/economics/story/0,,1974478,00.html>
17.12.2006: Leader: The BAE affair sends all the wrong signals <http://www.guardian.co.uk/Politics/comment/story/0,,1974028,00.html>
Blair forced Goldsmith to drop BAE charges
*David Leigh and Rob Evans
Thursday February 1, 2007
The Guardian <http://www.guardian.co.uk>*
The attorney general, Lord Goldsmith, changed his mind about whether there was enough evidence to bring corruption charges against the arms company BAE after pressure from Downing Street, legal sources have told the Guardian.
In emergency meetings before Christmas, Lord Goldsmith initially agreed with lawyers and prosecutors that the Serious Fraud Office could bring charges against the former head of BAE Sir Dick Evans.
The allegations involved backdoor gifts to the then head of the Saudi air force, Prince Turki-bin-Nasser.
Having reviewed the SFO's files, Lord Goldsmith agreed that BAE could, in effect, be offered a plea bargain in which investigators would drop further potentially politically embarrassing inquiries if the company agreed to plead guilty to these relatively minor charges.
But within 48 hours the agreement was countermanded after decisions taken in Downing St, Whitehall sources said.
The director of the SFO, Robert Wardle, was forbidden to make the approach to BAE. Instead the attorney general told parliament the entire Saudi investigation was to be halted, and that there was insufficient evidence for it to succeed.
Lord Goldsmith also said in the Lords that MI5 and MI6 believed national security was in danger. The heads of the agencies have refused to endorse his claim.
The attorney general is supposed to act in an impartial, quasi-judicial role, to protect the public interest. But since the prime minister's elevation of Lord Goldsmith to the post in 2001, he has caused increasing controversy.
Writing in the Guardian today, the human rights lawyer Lord Lester calls for Lord Goldsmith to be stripped of his political powers. The Lib Dem peer criticises his conduct in three key "political" cases: the BAE inquiry; his Iraq advice, where it also emerged that he had changed his mind under political pressure; and the cash-for-honours police inquiry. The government's reputation has been harmed by "weaving and ducking, buck-passing and hand-wringing", Lord Lester says, and the scandal of Lord Goldsmith's halting of the BAE investigation has "gravely eroded public confidence in the government's integrity".
The attorney general's conduct is likely to be the subject of attacks by other Lib Dem peers in the Lords today. The veteran former Labour minister Shirley Williams has called for a debate on his responsibility for preserving the rule of law.
The SFO initially assembled evidence on the Prince Turki aspect of their Saudi case with the close involvement of a senior fraud barrister, Timothy Langdale QC, who regularly acts for the government as Treasury counsel.
The legal view was that adequate evidence existed to bring charges and to open a Crown case against BAE in court, although their defence to the allegations has so far never been heard.
Yesterday BAE said the suggestion there was enough evidence "directly contradicts the position of the attorney general and the SFO". They stressed that Lord Goldsmith had said: "I consider, having carefully examined the present evidence, that there are obstacles to a successful prosecution so that it is likely that it would not in the end go-ahead."
Asked whether Sir Dick Evans and the company denied making payments to Prince Turki, BAE said: "The fact that we have not commented specifically on any statements made by the Guardian should not be taken as any kind of admission."
The SFO refused to comment last night, but Lord Goldsmith's office said: "The decision to discontinue the [Saudi] investigation was made by the director of the SFO ... The final decision was his alone. The prime minister gave his views on the national security implications.
"Having considered the full public interest case the SFO concluded that pursuing the case, either as a full investigation or on some more limited basis, created the same risk to national and international security. In view of those risks to national and international security the director of the SFO decided to halt the case."
On Tuesday, Tories and Lib Dems also attacked ministers in the Commons over alleged BAE corruption in government-backed arms sales to Tanzania. Disclosures in the Guardian that the company made secret payments of $12m (6m) into a Swiss bank account to seal the deal were not disputed by the international development secretary, Hilary Benn. He said: "Those matters are the subject of investigation by the Serious Fraud Office".
His cabinet predecessor, Clare Short, told MPs: "The police came to see me and said they have the documents showing that it was bribery." She said it was time to end the "deep culture" within government which "sees it as their duty to push all arms sales deals". BAE deny wrong-doing in the Tanzania deal.