BAE's man in the MoD taken aside by feds in Miami
Brit arms execs feel long arm of US Justice Dept
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A third senior BAE Systems executive has been subpoenaed by US investigators in recent weeks, it has emerged. Alan Garwood, until recently seconded from BAE as head of the Defence Export Sales Organisation (DESO), the controversial Ministry of Defence arms-sales bureau, was served with legal documents while changing planes in Miami last month.
Garwood, now head of business development at BAE, worked at DESO from 2002 to 2007, bossing 600 military and civil-service staff at an average cost to the taxpayer of £15m per year. His tenure saw high-profile overseas arms deals brokered, including last year's sale of Eurofighter Typhoon superfighters - and accompanying technology transfers - to Saudi Arabia.
BAE confirmed to news media including the Guardian and Financial Times that several of its executives have recently been subpoenaed by the US Justice Department during visits to American territory. It is understood that these actions relate to the feds' investigation into the long-running al-Yamamah deal, previous to the Eurofighter one, under which the UK sold Saudi Arabia a panoply of jets, weapons and warships.
The UK's own probe into possible corruption around the al-Yamamah deal was dropped in controversial circumstances late in 2006, following personal intervention at Downing Street by the Saudi Prince Bandar. British Serious Fraud Office investigators believed him to be a key figure in their investigation, as he had received enormous sums - up to $1bn - from BAE via a Washington bank while serving as ambassador to the US. It was this American involvement, leaked to the media by disgruntled SFO investigators after they were ordered to drop the case by the Blair government, which drew in the feds.
Bandar does not deny receiving the money, but says that the transactions were entirely proper and consistent with his role as a Saudi official. BAE say that all transactions connected with the al-Yamamah deal have been fully overseen and indeed negotiated by the British government.
By this, they generally mean overseen and negotiated by DESO - in other words, pretty much by BAE but operating under the MoD's banner. It appears, in fact, that some of the Bandar Washington cash travelled via a DESO account. This may give a clue as to why the feds are so keen to speak to Mr Garwood.
Perhaps unsurprisingly, given the embarrassing position DESO has put the British government in - the SFO muzzling has recently been described as "abject surrender" by High Court judges, who may force a reopening of the probe - one of the first acts of the Brown government was to move DESO out of the MoD in a bid to regain control of its activities. Meanwhile, despite repeated US requests, the government has refused to release its al-Yamamah files to the feds. ®
COMMENTS
Too many cooks appear to have their fingers in this pie.
"the transactions were entirely proper and consistent with his role as a Saudi official": quite true, from my own experience of travelling to and working in Saudi Arabia in the past.
In Saudi, overt, blatant and pervasive bribery is THE WAY. Everything, from the queue at customs upwards. Everything is greased with a little "local currency". The entire economy, the entire society is organised and governed that way, it works beautifully. That is the way that it is - OVER THERE.
Here in non-muslim UK and, presumably also the US, bribery takes on a completely different role and there are quite specific penalties for those who knowingly and deliberately breach these rules. Well, there are penalties for "little" people anyway. Lets just see how this one pans out, given the unmistakable stench of UK central government collusion embroiled through the middle of it.
And the Americans are whiter than white??
I worked on this programme some time ago, and we all knew of the payments made (but not the details). It happened at every level of interaction with Saudis - not just at the Prince level - all the way down to giving the Security Guard a nice gold plated pen so that there would be no 'problems' with getting onto a site. I know of a story that a swimming pool was built so that a problem geeting a necessary permission went through without a hitch.
We knew it, the MOD knew it and the Saudis knew it, and it was all built into the cost of any deal. Over there getting kickbacks is not corruption, it is how you do business. The Saudis use it as a method if ensuring loyalty to the boss (stay loyal or loose all this moola I am letting you make on the deal). At the lowest level, they regarded it as a personal gift to show your respect.
Funnyest thing is that everyone did it - including the Americans. They probably just hid it through more layers of "agents" and other companies so that they could put up a completly clean set of books to their corruption investigators.
Why aren't they investigating M$
As recently highlighted M$ appeared to use a sweetner to a UK council to get them to use M$ products rather than Open Source. Recently rehighlighted as the Council still seem to be producing advertising material which some could easily misinterpret as part of the deal if there was one.
A company I worked for produced items at £100K which stomped the US competitions offerings at £500K. Their sales team got laughed out of every prospect visit. Their solution was to buy our company and shut it down albeit with smoke and mirrors, all highly illegal in the US and although the issue was raised at the highest (or with JP involved should one say lowest) levels, the response was "wasn't it fantastic that the US wanted out technology".
This entire US exercise is down to pure sour grapes as they did not get the deal.
If they had got the deal and the UK companies had complained you can guess the UK government response - might interfere with the lucrative speech circuit..
Unfortunately the one area where the US excels is BS/marketing and they will probably try to put a moral slant on this whereas in reality there isn't one, part of their fool all the people all the time mantra that nulab tried to adopt.
I'll do my bit by continuing to refuse to visit the US on holiday.
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