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The Sunday Telegraph: BAE corruption probe turns to commissions (*BAE – Saudi Arabia bribes scandal allegedly linked to Shell)

Helen Power
Last Updated: 12:09am GMT 02/03/2008

The Serious Fraud Office (SFO) is escalating its probe into alleged bribery and corruption at BAE Systems, with one line of investigation being a series of commission payments personally overseen by chief executive Mike Turner during the late 1980s.
The Sunday Telegraph understands that the SFO has escalated its inquiry in the last three months, interviewing a number of executives under caution and sending BAE an unprecedented number of requests for information.

Sources say several executives questioned by the SFO about their own role in the payment of commissions to sales agents have pointed to Turner as the person who authorised the payments. It is understood the SFO is concerned about a lack of documentation to show where sales commission payments of up to £32m a time actually went.

Turner, who was in charge of marketing at BAE from 1987 to 1992, has yet to be interviewed under caution, although it is likely he will be.

BAE said: “The company will not comment on an ongoing investigation in accordance with standard practice. BAE Systems has made its position clear repeatedly.”

It is thought the company, which has always maintained the commissions paid are perfectly legal, legitimate and not bribes, believes Turner is being unfairly smeared.

It has also emerged that BAE kept documents detailing the payment of commissions outside the UK in the Swiss city of Zurich. It is understood when the SFO asked BAE why they were kept in the super-secretive city, the company said it was because they were worried arms trade activists could seize them if they were on UK soil.

The SFO has narrowed its four-year investigation into BAE to focus on arms sales in Romania, Czech Republic, South Africa, and Tanzania. But while the number of jurisdictions has been cut, the regulator has extended its probe to BAE executives.

The investigation is being led by assistant director Helen Garlick.

An SFO spokesman said: “I can confirm there have, in recent months, been a number of requests and contacts. We are doing the job thoroughly and painstakingly.”

BAE is co-operating fully with the regulator’s inquiries, but has expressed irritation about the length of the probe.

Turner told The Daily Telegraph two weeks ago that he was concerned about how long the SFO is taking to make its mind up whether to bring charges.

“Our concern, particularly with the SFO, is that this has gone on for four years. All we ask for after four years is a timely conclusion.”

Turner has announced he will step down from BAE in August and the company is looking for a successor. It has hired head-hunter Egon Zehnder to conduct an external search, but is also considering internal candidates, with chief operating officer Ian King thought to be one possibility.

Turner has won plaudits for his success. But his last few years at Britain’s biggest defence contractor have been blighted by the SFO probe. A leaked SFO document published by a South African newspaper last year named Turner and BAE’s former chairman Sir Dick Evans as suspects in the inquiry. The document, which was a request for assistance from the SFO to the South African authorities, said there was “reasonable cause” to believe Turner, Evans and the company were guilty of corruption.

However, it is understood the company resents what it views as attempts by pressure groups such as the Campaign Against Arms Trade (CAAT) to personalise the SFO investigation and embarrass BAE executives.

The company will come under scrutiny in court for the second time in three weeks tomorrow when the CAAT will ask the Information Tribunal to release memoranda between the British government and Saudi Arabia which the activist body believes could detail a state-sanctioned bribery regime at BAE in the 1970s and 1980s.

The SFO sensationally dropped its inquiry into the multi-billion pound Al-Yamamah contract under which BAE sold Typhoon aircraft to the Saudis last year.

Headline comment in brackets added by John Donovan

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Executive Intelligence Review: The BAE Systems Affair and The Anglo-Dutch Imperial Slime Mold and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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