by René Lavanchy
The director of the Serious Fraud Office acted unlawfully when he stopped a major investigation into alleged bribery by arms giant BAE Systems, according to a legal opinion this week.
Lawyers for Campaign Against Arms Trade and The Corner House have written to SFO director Richard Alderman asking him to reverse his decision to end the inquiry, which reportedly could have led to BAE facing a £500 million fine.
The SFO has refused the request, which is likely to result in the High Court being asked to hold a judicial review. BAE has separately agreed to pay £255 million to the US Department of Justice to settle charges.
The SFO decided two weeks ago to accept a plea bargain deal from BAE and £30 million in respect of accounting malpractices over a Tanzanian arms contract. As a result, the corruption allegations – for which the SFO was preparing a case until this month – will not be tested in court.
The firm Leigh Day and Co argues that this decision contravenes SFO guidance which states that any plea agreement
must reflect the seriousness of the offence.
“Crucially, by striking this deal, BAE has managed to avoid the possibility of a conviction for bribery which would
probably have led to far more wide ranging sanctions (including debarment from public contracts) and the possibility of individual directors facing charges”, it said in a statement.
“While the SFO has announced that part of the fine being paid by BAE will be paid to the people of Tanzania in compensation for losses allegedly suffered as a result of the BAE deal, the potential victims in other countries now have no prospect of receiving compensation or discovering the full details of the fraud allegedly committed on them.”
Until this month, BAE was facing corruption charges in Britain relating to arms sales in Tanzania, Europe and South Africa. Although the firm has admitted wrongdoing on a wider scale to US prosecutors, it continues to deny allegations of bribery.
Nicholas Hildyard of The Corner House said: “Plea bargains should only ever be entertained when companies have really come clean. BAE has not. Once again, an SFO decision has reinforced the UK’s reputation for letting big companies get away with bribing.”
An SFO spokesperson said this week that “it would not be right for the director to delay proceedings”. They declined to comment on the allegation that the SFO had acted unlawfully, saying that a judicial review would allow it to be tested.
