BAE criticised over bribery incident in Tanzania

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BAE Systems has been criticised by a UK parliamentary inquiry into a corruption case involving a 1999 air traffic control deal with Tanzania, and been told to pay the Tanzanian government a 30 million pound refund immediately or face further legal action.

In February last year the defence giant brokered a deal with Britain’s Serious Fraud Office (SFO) to pay a 30 million pound fine following an enquiry into a 28 million pound agreement to sell overly complex radar systems to the east African nation.

A London court later fined BAE 725,000 pounds for failing to keep proper records of payments to an adviser in Tanzania, and this was to be deducted from the multi-million dollar settlement.
“These funds were stolen from the (Tanzanian) government and should be duly returned to our government,” Tanzania’s Foreign Affairs Minister Bernard Membe told a news conference earlier this year.

BAE admitted to not keeping track of eight million pounds it paid to an agent who brokered the deal. The 30 million pound payment was essentially a compensation fee to Tanzania due to the suspicious nature of the broker’s payment.

However, BAE has always denied bribery and says the agreements it struck did not include an admission it had made any corrupt payments.
“BAE’s decision is deliberately intended to create a false perception that Tanzania is governed by corruption and cannot be trusted with this money, while in actual fact it is BAE itself that has been under corruption investigations,” said Membe.

MPs called BAE’s compensation programme a ‘complete sham’, according to a BBC report, which said that MPs on the watchdog International Development Committee dismissed some of the company’s positions as ‘waffle’ and ‘dissembling’.

With the Tanzanian government, British aid ministry the Department for International Development has drawn up a plan to spend the money on the Tanzanian education system – for desks, text books and teachers’ accommodation.

The MPs queried the fact that no money has actually been paid yet. Committee chairman Malcolm Bruce MP advised BAE to hand over the money “as soon as possible”.

As part of the UK plea bargain last year, attempts by the Serious Fraud Office to prosecute BAE for alleged corruption in Tanzania, the Czech Republic, Romania and South Africa were dropped.