"Suspicions over BAE termination of government contract"

by Peter Marshall, Newsnight

first published 29 May 2009

Jeremy Paxman, presenter of BBC2 Television's Newsnight current affairs programme, introduced this 8 minute broadcast as follows:

"BAE, the massive British arms company, the third biggest in the world in fact, is struggling to prove that it's an ethical arms dealer, if such a thing exists. You may recall that a couple of years ago, the British government scotched a Serious Fraud investigation into BAE's biggest deal of all with Saudi Arabia. Tonight, Newsnight can reveal that the company may have returned the favour. It stopped a billion pound insurance contract which tied the government to the Saudi business. The company's critics smell a rat."

The programme (see PDF transcript above) draws attention to the fact that BAE stopped the government insurance contract after more than two decades following a "blistering report from the international anti-bribery watchdog" (the OECD Working Group on Bribery) in October 2008. This report criticised the government department providing the insurance (the Export Credits Guarantee Department) for not acting on evidence provided to it that BAE had allegedly obtained its insurance fraudulently. Cancelling of the insurance cover, however, means that "both sides averted any audit of the Saudi deal".

Information about stopping the insurance contract came to light as a result of legal correspondence between The Corner House and Campaign Against Arms Trade with the UK Export Credits Guarantee Department and subsequent parliamentary questions tabled by Vince Cable MP.


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