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SFO investigators set to force BAE’s hand

Daily Mail

By BEN LAURANCE

Last updated at 10:26 PM on 22nd January 2009

Britain’s Serious Fraud Office and the US Department of Justice believe they are close to completing a package of evidence against BAE Systems that will encourage the arms manufacturer to strike a settlement over long-running corruption allegations. 

SFO chief Richard Alderman has visited the US to meet Department of Justice investigators who are probing BAE’s controversial multi-billion pound al-Yamamah arms deal with Saudi Arabia. 

The SFO abandoned its own probe into the Saudi contract more than two years ago after coming under pressure from the British government. 

But the British investigators are still looking into bribery allegations involving BAE contracts with the Czech Republic, South Africa, Tanzania and Romania. 

The SFO refused to comment on the continuing probe. But according to impeccable sources, the SFO believes that it should have assembled a dossier of evidence to put to BAE by the end of March. 

The DoJ will present its evidence on the Saudi bribery allegations at the same time.

The SFO and DoJ hope that BAE will be persuaded to do a deal under which it will admit wrongdoing and agree a package of penalties that will allow the matter to be closed.

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It is highly unlikely that BAE would admit corruption involving the Saudi deal.

To do so would debar it from bidding for contracts from the US government. 

But the company is likely to be offered the option of striking a settlement under which it would plead guilty to lesser charges of false accounting or fraud. 

BAE maintains that it has always adhered to the laws of countries in which it operates.

‘We continue to support the SFO in its enquiries,’ the company said yesterday. It would be ‘inappropriate’ for BAE to comment on the DoJ investigation, it added. 

The SFO inquiry started more than four years ago.

As reported in the Daily Mail last month, the SFO has already spent almost £4.3million on outside help from lawyers and other specialists as part of its probe.

That is on top of the SFO’s own costs. 

Dramatic evidence suggesting that huge ‘commissions’ were paid to agents who helped BAE to clinch a £1.6billion arms contract in South Africa have emerged in court documents lodged in the republic. 

The papers says the payments, allegedly to secure a contract in 1999 for Hawk and Gripen aircraft, totalled £115million. 

The South African contract went to BAE although a rival deal, tabled by Italian firm AeroMacchi, would have been far cheaper. 

Daily Mail Article

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