Halt to BAE probe sets dangerous precedent

By Sniffer

December, 06:- THE Blair administration is in the dock for damaging Britain's international commercial and diplomatic standing. It has interfered with the rule of law.

The controversy involves alleged corruption and bribery. Britain, a signatory of the OECD's anti-bribery and corruption convention, previously vowed that it would act against British miscreants.

Despite that promise, the government has interfered with a major investigation on the grounds of 'national interest'. Sceptics, ranging from the Liberal Democrat opposition and the media to lawyers and anti-corruption organisations, believe that the reasons are commercial.

The nub of the investigation

Let us briefly examine the background and the government's case before forwarding an opinion. The Blair government forced the UK Serious Fraud Office (SFO) to terminate its investigation into alleged bribery of BAE Systems, Britain's huge fighter aircraft and defence business.

For three long years, the SFO has investigated allegations that BAE had placed money in a 60 million (S$181 million) slush fund to land a previous Saudi contract worth billions of dollars. BAE has denied allegations that it bribed members of the Saudi Arabian royal family and other officials.

In its recent investigations, however, the SFO obtained permission from Swiss authorities to examine Saudi bank deposits. The Saudi Arabian government was furious about the turn of events. It threatened to terminate a deal to buy 76 fighter aircraft worth around 6 billion, and to purchase future arms contracts from France or another willing seller. According to some reports, the Saudi Arabian government also threatened to end diplomatic ties with the UK and stop forwarding information about terrorists in the Middle East.

Government intervenes to stop an investigation

UK Attorney-General Lord Goldsmith announced last week that the SFO was 'discontinuing' its investigation. In his judgement, a prosecution would not be successful. He added that the decision had been made in the wider public interest, which had to be balanced against the rule of law.

Prime Minister Tony Blair maintained that continuation of the SFO investigation would cause 'serious damage' to relations between the UK and Saudi Arabia. He claimed that although 'thousands of British jobs and billions worth of pounds for British industry would be lost, if the investigation went ahead', it was not stopped for commercial reasons.

'Our relationship with Saudi Arabia is vitally important for our country in terms of counter-terrorism (and) the broader Middle East. That strategic interest comes first,' said Mr Blair.

Criticism vociferous

The arguments of Mr Blair and Lord Goldsmith have been met with considerable scepticism, which is hardly surprising. For a start, the undemocratic Saudi Arabian government itself needs British intelligence to counter internal insurgency. It is highly unlikely that the Saudis would abandon their pro-western stance, just because a few executives appeared before a British judge. The diplomatic relationship goes both ways.

As Liberal Democrat leader Menzies Campbell contends, the decision to stop the SFO from doing its duty is deeply damaging to the rule of law. It has established a dangerous precedent. Dictators and kleptocrats will laugh off British suggestions that their corruption is unacceptable.

Indeed, as anti-corruption watchdog, Transparency International UK, opines, the decision smacks of 'double standards'. The move has taken place at a time when Britain is trying to convince developing countries to clean up their regimes. Companies dealing with corrupt regimes will also be tempted to take their chances on the grounds that the SFO will continue to be unsuccessful in its efforts to prosecute.

The UK government may still face several legal challenges. Officials of the OECD, for example, are concerned that Britain has failed to complete the bribing investigation. The Campaign Against the Arms Trade and Corner House have also threatened action.

Regardless of what Mr Blair and Lord Goldsmith claim, the decision to appease the Saudis was all about money, jobs and maintaining good relations with a significant oil producer.

Hypocrisy the rule of the day

Earlier this month, Hilary Benn, UK International Development Secretary and ministerial champion for tackling overseas corruption, stated: 'Tackling corruption wherever we find it - whether here or abroad - is essential. We will not tolerate those who extort, corrupt and deceive.

'Together, we can make progress and by strengthening the institutions of government, promoting better transparency and accountability, and giving a voice to those who are hit hardest by corruption - the world's poorest.'

Single word comment: Humbug.

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