BAE-Tanzania-SFO plea bargain settlement
The UK’s Serious Fraud Office (SFO, a UK government department that investigates and prosecutes complex fraud) has been investigating alleged bribery and corruption in BAE's arms deals since 2004 in several countries (including Chile, Czech Republic, Qatar, Romania, Saudi Arabia, South Africa and Tanzania). BAE is alleged to have paid bribes, often in the form of commissions to "advisers" to clinch the deals.
On 1 October 2009, the SFO announced that it intended "to prosecute BAe Systems for offences relating to overseas corruption . . . in Africa and Eastern Europe".
On 5 February 2010, however, it announced a plea bargain settlement under which BAE would plead guilty in court only to "accounting irregularities" in its 1999 sale of a radar system to Tanzania and would pay penalties of £30 million. The SFO would not bring prosecutions relating to alleged bribery and corruption in BAE's arms deals elsewhere, including those in the Czech Republic, South Africa and Romania.
On 26 February 2010, lawyers acting for The Corner House and Campaign Against Arms Trade (CAAT) requested permission to ask the courts to review the lawfulness of the plea bargain agreement with BAE on the lesser charge of accounting misdemeanours in Tanzania instead of the more serious corruption offences in Eastern and Central European countries.
In its response to the legal challenge, the SFO admitted "with hindsight" that its October press release had "overstated the stage which had been reached in both the investigative and prosecutorial decision-making process".
Based on this statement, the courts did not give permission, and the legal challenge had to be withdrawn on 8 April 2010, even though the SFO itself had stated in separate preliminary court hearings that "from 2002 onwards, BAE adopted and deployed corrupt practices to obtain lucrative contracts for jet fighters in central Europe" in a "sophisticated and meticulously planned operation involving very senior BAE executives." [1]
The SFO finally brought its settlement to court on 23 November 2010, when BAE pleaded guilty to one minor offence of not keeping accurate accounting records.
After a full hearing on 20 December 2010 in London, the company was sentenced on 21 December company for concealing that it was making payments to a Tanzania-based agent "with the intention that he should have free rein to make such payments to such people as he thought fit to secure the radar contract” for BAE from the government of Tanzania. BAE was fined £500,000.
On 7 January 2011, lawyers acting for The Corner House and Campaign Against Arms Trade wrote to the SFO Director asking him to quash the blanket immunity from prosecution given by the SFO to BAE Systems as part of the plea bargain settlement agreement. Details of this agreement emerged only during sentencing on 21 December 2010.
[1] David Leigh and Rob Evans, "BAE chiefs 'linked to bribes conspiracy'", The Observer, 7 February 2010.