The Hindu : International : BAE "faces'' probe in U.S.

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Friday, Jun 15, 2007
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International

BAE "faces'' probe in U.S.

Hasan Suroor

Charge of bribery to win defence contract

LONDON: Britain's controversial arms company, the BAE Systems, is reportedly facing the prospect of a criminal investigation in America following allegations that it paid £1 billion in bribes to a prominent member of the Saudi royal family to win a £43-billion defence contract in 1985.

The Guardian on Thursday quoted sources in Washington as saying it was "99 per cent certain'' that an inquiry would be opened under the Foreign Corrupt Practices Act by the U.S. justice department and it would cover the BAE-Saudi deal.

"Such an investigation would have potentially seismic consequences for the BAE, which is trying to take over U.S. arms companies and make the Pentagon its biggest customer,'' the newspaper said. A BAE spokesman told The Hindu that the company was not aware of any imminent U.S. investigation.

"We know there is no proposed investigation by the U.S. Department of Justice,'' he said.

"Staggered payments"

Last week, The Guardian and the BBC claimed that payments of up to £1 billion were made to Prince Bandar bin Sultan, head of Saudi Arabia's national security council and a former Saudi Ambassador to the U.S., for his role in facilitating the 1985 defence deal known as the "al-Yamamah deal''.

It was alleged that the payments, made through secret bank accounts in the U.S. and staggered over 10 years, were made with the "full knowledge'' of the Ministry of Defence. Prince Bandar has denied receiving any improper payments for personal benefit.

Prime Minister Tony Blair, who has come in for strong criticism for calling off an inquiry into the scandal by the Serious Fraud Office, again defended his decision saying such an investigation would have damaged Britain's national interests.

Rejecting calls for an independent investigation in the light of the wave of allegations , he said it would "wreck'' Britain's relations with Saudi Arabia"It would lead to wreckage of a relationship that is of fundamental importance for the security of this country,'' he said.

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