The Democratic Alliance (DA) and the Independent Democrats (ID) say the plea bargain agreement announced on Friday between BAE Systems, the Serious Fraud Office (SFO) in the United Kingdom and the Department of Justice in the United States is not in the interest of truth and justice in South Africa.
In a strongly-worded statement DA shadow defence minister David Maynier says the “fact is that we have been shafted by the decision..”
In terms of the deal Europe’s biggest military contractor, will pay around $450 million in fines in the United States and Britain and admit to wrongdoing in Saudi Arabia, the Czech Republic, Hungary and Tanzania. Maynier notes the SFO had also been probing BAE Systems’ dealings in South Africa, notably allegations it paid bribes to senior politicians and officials in connection with the acquisition of 24 Hawk trainer jets and 26 Gripen fighter jets for the South African Air Force.
“The investigation by the … [SFO] was probably the last best hope of getting to the bottom of what really happened during the arms deal, Maynier said in connection with the 1999 Strategic Defence Package (SDP) that saw the purchase of the Hawk, Gripen as well as four frigates, three submarines and 30 light utility helicopters.
“That investigation has now been terminated, and we will now probably never know who received bribes and kickbacks from BAE. The details of the various investigations will remain hidden as a result of the plea bargain agreement and nobody – whether they bribed or whether they took bribes – will be held to account.”
ID leader Patricia de Lille, who made much publicity for herself out the SDP claims, said that by striking the deal the UK has lost the moral authority to talk about good governance and fighting corruption to other world leaders. “They are no better than any of the rogue leaders in Africa who have used funds from bribes in arms deal to stay in power,” she charged.
Reuters reports that according to a criminal charge filed in the US District Court in Washington, BAE had gains of more than $200 million on the business related to the false statements, including deals in Saudia Arabia. BAE will also plead guilty in Britain to one charge of breach of duty in relation to records of payments made in Tanzania. It will pay 30 million pounds, the largest penalty yet imposed by the SFO.
“While it’s a substantial figure, it’s less than the worse case scenario,” said analyst Tina Cook at brokerage Charles Stanley, noting initial media reports had suggested a figure of up to 1 billion pounds from the SFO alone, later revised down to between 200 million and 300 million. A statement by the SFO said its decision ended its investigations into BAE’s defence contracts. US Department of Justice officials, however, say their investigations are ongoing. They declined to elaborate.
BAE Chairman Dick Olver said in a statement: “The company very much regrets and accepts full responsibility for these past shortcomings. These settlements enable the company to deal finally with significant legacy issues.”
The US court filing outlined a number of BAE’s dealings, including the sale of fighter aircraft and other defense material to Saudi Arabia and the lease by the Swedish government of Saab Gripen fighter aircraft to the Czech Republic and Hungary. Because the leased jets contained US-controlled defence components, Sweden needed to secure an arms export license from the US Department of State. “BAE Systems did not subject these payments and benefits to the type of internal scrutiny and review that BAE Systems had represented it would subject them to” in previous undertakings to the US government,” the court document said.
The settlement BAE reached with the SFO of Britain relates to the sale of an air traffic control system in Tanzania, a contract worth 30 million pounds, according to an SFO spokesman. Part of the 30 million pound penalty will be a fine, to be decided by a court, with the remainder as a charity payment.
“In connection with the sale of a radar system by the Company to Tanzania in 1999, the Company made commission payments to a marketing adviser and failed to accurately record such payments in its accounting records,” Olver said. “The Company failed to scrutinise these records adequately to ensure that they were reasonably accurate and permitted them to remain uncorrected.”
After the settlement was announced, the SFO said it had withdrawn a corruption charge it filed on January 29 against Count Alfons Mensdorff-Pouilly, a BAE agent involved with BAE contracts in Eastern and Central Europe.
SFO director Richard Alderman said in a statement: “I am very pleased with the global outcome achieved collaboratively with the DoJ. This is a first and it brings a pragmatic end to a long-running and wide-ranging investigation.”
Pic: A Saab Gripen D over the Union Buildings, Pretoria. SA has ordered 26 of the capable aircraft at acost of R19.9 billion.