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Sir Nigel Rudd
Detained: non-executive director Sir Nigel Rudd was met by justice officials in New York

BAE staff brace for action by America

Robert Lea, Evening Standard
19 May 2008


BAE Systems is bracing itself for a wave of US subpoenas of senior staff after its chief executive and a high-ranking board director were detained by the US Department of Justice over ongoing allegations of corruption in BAE's £80billion Saudi Arabian arms supply contracts.

The British defence company has been forced to admit that chief executive Mike Turner and non-executive director Sir Nigel Rudd were detained after flying into separate airports in Houston and New York last week.

Their detentions are a huge embarrassment for BAE, which is struggling to shake off the allegations that its officials were involved in bribing Saudis to gain arms contracts.

During the 30-40 minute detentions both directors had their laptops and BlackBerry communication devices examined.

While Turner was flying in to visit a BAE facility in Texas, it is understood Rudd, who is also chairman of BAA and a senior director at Barclays, was not on BAE business. Both were picked up by justice officials when the Americans became aware of their flight plans.

The company is refusing to reveal the contents of the subpoenas - it remains uncertain whether Turner or Rudd will be called back to the US to give evidence - but it did admit several of its US employees had also been issued with subpoenas.

BAE said it also "fully expects" other senior UK staff flying to the US to be detained but insisted it was not yet changing any employee flight plans.

The first 20-year al-Yamamah contract to supply dozens of jetfighters was signed in the Eighties under Margaret Thatcher's government. It was worth £43billion and secured Saudi oil supplies for the UK and the swapping of military and paramilitary intelligence. Further Saudi supply contracts are reckoned to be worth £40billion to BAE.

The corruption issue flared up at the end of 2006 when a Serious Fraud Office inquiry into the affair was ordered to be closed by Tony Blair's administration on national security grounds.

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