Morning:
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While what is left of our major armaments industry is put through the wringer, the rest of the world's defence companies must be chortling.
The idea that BAe Systems may be alone among weapons contractors in bunging foreign potentates in order to secure orders is risible. The Serious Fraud Office needs to understand something and understand it well: all countries engage in such activities. By moving against our virtually last remaining large defence contractor, the SFO threatens to undermine British interests and jobs on massive projects like the Eurofighter.
Of course, nobody condones bribery. But to single out one company from a worldwide industry is ridiculous and highly damaging. The legal purists determined to prosecute may not agree — an offence is an offence — but it's impossible to ignore the context of the field in which BAe operates. Fine, if other nations also haul their arms companies before the courts, but to single out one is crazy. The French, Germans, Spanish, Italians and Russians have all been doing the same. And the holier-than-thou Americans.
What is a pity about the SFO investigation is that it began with the best of intentions. The original push to examine BAe's books was not directed at foreigners who received cash but to see who, in this country, benefited from the biggest UK arms deal ever, the £43 billion Al-Yamamah contract to supply BAe Tornado aircraft and other equipment to Saudi Arabia.
It was a government-to-government project and one of the crowning achievements of Mrs Thatcher's reign. However, the widely held suspicion was that some of those extremely close to her may have received substantial backhanders for helping to fix the order.
The National Audit Office launched an inquiry, resulting in a never-published memorandum sent to Robert Sheldon, the then chairman of the Commons Public Accounts Committee. Sheldon refused to release it because he said he was fearful that BAe jobs, some of which were close to his constituency, could be jeopardised. The Saudi inquiries were stymied. Later, an SFO probe into whether BAe had a £60 million slush fund to furnish Saudi royals with prostitutes was also blocked, this time by Tony Blair's administration. The excuse was that relations with Saudi Arabia, a valuable trading partner, would be fractured and again jobs put at risk.
In danger of being made to look impotent the SFO focused its efforts on less politically fraught cases: those involving much smaller BAe deals with the Czech Republic and Tanzania. There is a strong whiff in all this that getting BAe has become a cause célèbre within the SFO. If so, that is a great pity. It's Al-Yamamah, and who in this country may have benefited, that is of legitimate and still abiding interest.
