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BAE – getting away with paying peanuts

Demo outside BAE court case

A giant Dick Olver, chairman of BAE, paying peanuts

BAE managed to escape with a fine of £500,000 plus costs in court today. Its plea bargain (worth £30 million) to end years of corruption investigations was structured so poorly that if the court fined more, this would be deducted from the amount Tanzania is to receive in reparations. The judge described “moral pressure” to therefore minimise the fine.

But it is heartening that the judge, like the rest of us, could clearly see through BAE’s story:

“..on the basis of the documents shown to me it seems very naïve in the extreme to think that Mr Vithlani was simply a well-paid lobbyist”

“In any event, the suggestion that Mr Vithlani was merely a well paid lobbyist using his valuable time to hold legitimate meetings with decision-makers in Tanzania with no money changing hands is inconsistent, in my view, with the wording of the basis of plea that “there was a high probability that part of the £12.4m would be used in the negotiation process to favour BAEDS”.”

“The victims of this way of doing business, if I have correctly analysed it, are not the people of the UK, but the people of Tanzania. The airport at Dar-es-Salaam could no doubt have had a new radar system for a good deal less than $40million if $12million had not been paid to Mr. Vithlani.”

The judge noted that the then chairman of BAE, Richard Evans, personally approved Mr Vithlani’s appointment. While he accepted that there was no evidence that BAE was party to an agreement to corrupt, he noted, there “did not need to be” because the company had explicitly structured its payments to the marketing adviser in Tanzania via offshore companies so that they were “placed them at two or three removes from any shady activity”.

Despite the judge’s strong words, he was left with no power to impose stricter penalties. He further condemned the fact that the structure of the plea bargain means BAE cannot be pursued for offences committed before February this year, even if it has concealed evidence.

BAE may be off the hook technically, but neither the judge, the media nor campaigners are “naive in the extreme”. BAE’s reputation has taken another battering and we will keep up the pressure on this huge arms company until its privileged position close to governments and above the law is brought to an end.

5 comments to BAE – getting away with paying peanuts

  • Phil lyon

    I’m supportive of caat but feel that a complaint about this result is misplaced. Sure a small fine in this companies terms but 29m going back to the people of Tanzania is great news. And bae has been exposed again.

  • Nkilijiwa Ntinginya

    I am a Tanzania citizen living in Dar es Salaam.

    I am very stunned that criminals can easily get away from the jaws of justice at the door steps of the custodians of good governance!

    Some of the people who benefited from the cut from this deal are still in power in my poor country making similar shoddy dealings with impunity, they can afford to do this because they have the support of the UK and US governments.

    Whatever deals that the SFO entered with BAE to conceal the identies of the criminals involved in this case (both in Tanzanian and the UK) should be condemed with every drop of blood available.

    I believe there are a lot of people in the UK who have been hurt by the decisions taken by SFO on behalf of the UK government, there are a lot more here at home who are sick and can only sit and watch the perpetrators walk away with impunity. I request for the support from all the well wishers of the Tanzanian people to request all those who were involved in reaching the deal that have cleared these criminals from the law be asked to resign from public offices, they have failed to protect justice and the integrity of the UK people

  • Fumbuka Ng'wanakilala

    It’s a sad day for justice. The Tanzanian anti-graft watchdog — the Prevention and Combating of Corruption Bureau (PCCB) — has been conducting is own investigation into the BAE deal. It is understood that Britain’s Serious Fraud Office (SFO) handed PCCB a full case file on the transaction with iron-clad evidence of corruption against prominent individuals in Tanzania, including senior politicians (past and present) and businessmen.
    However, it seems very likely that PCCB will use the plea bargain between BAE and SFO and the fact that reparations will be paid to Tanzania as an excuse to shut down its corruption investigation. This means that well-known government officials and businessmen in Tanzania who were involved in this corrupt transaction will not be prosecuted. Tanzanians feel cheated. Justice was clearly not served.

    Fumbuka in Dar es Salaam, Tanzania

  • Toby Clarke

    It is shameful that again priorities of arms company profits are being put above those of people in need in Tanzania. I am from Britain, not proudly as the armourer of the world, but have read a great deal about Tanzania. Corruption in my view is synonymous with minority rule, something that surely Tanzania has some understating of. In the declaration “Tanzania is the people and the people means everyone” then the people deserve prioritising decent services education “education for self reliance as Julius nayree said an majority rule. BEA play a dangerous game when they wish to undermine this hopeful democracy. It has been a long time since we were on a less than friendly basis with this now ally. However are friendly relations will not be encouraged when the working people of Tanzania are conned out of their development by a cash hungry elite selling arms.

  • Alan Storkey

    There are many appalling aspects to the agreement between the Serious Fraud Office and BAe Systems in Case S2010565 at Southwark Crown Court. Foremost was the fact that the case removed from Mr. Justice Bean and a jury the possibility of judging that bribery had taken place when it is clear that it has. The Serious Fraud Office, instead of doing its legally required job of prosecuting cases, has decided that it has the authority to ignore the rule of law and not prosecute.
    The Attorney General, and any other Government Ministers or Civil Servants, in agreeing to this course of action, as the officer charged with upholding the rule of law has therefore abrogated his basic charge. We should know what communications have allowed this to happen and the Attorney General should answer to this point.
    Further, and astonishingly, the agreement between the SFO and BAe Systems included the following clauses:
    “8) There shall be no further investigation or prosecutions of any member of the BAE Systems Group for any conduct preceding 5 February, 2010.”
    Surely in English law no prosecutor can ever give such a blanket indemnity. It could include BAe acting criminally in all kinds of unspecified ways, but being immune from examination. It seemingly is an agreement in perpetuity, removing BAe from scrutiny by the SFO. The rule of law requires that no such blanket indemnity should be provided to any group, however powerful.
    “9) There shall be no civil proceedings against any member of the BAe Systems Group in relation to any matters investigated by the SFO.”
    Surely, too, the SFO cannot be allowed to presume power in relation to civil cases which may be brought by any plaintiffs in relation to BAe Systems.
    Yet these clauses, Mr Justice Bean states, he has no power to set aside. This allows a systematic evasion of injustice, that the Attorney General and the Department of Justice have left unchallenged.
    It is admitted by BAe Systems that Shailesh Vithlani received $12.4 million from BAe Systems in relation to the Tanzanian contract of $39.97 million, 31% of the total contract price. It is also admitted that money was channeled via Red Diamond an offshore company controlled by BAe Systems and paid into another offshore company controlled by Mr. Vithlani. Clearly, BAe Systems so channelled it to disguise its links with the bribery that has now been made evident. Yet the Crown refused to contend that BAe was party to an agreement to corrupt. This failure is the equivalent in a prosecutor of a lie, and it should so be addressed.

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