BAE Systems in Trouble for being naughty (ABC News)

[Milne Bay]

Defence giant slapped with $520m fraud fines

Posted Sat Feb 6, 2010 4:15pm AEDT
Updated Sat Feb 6, 2010 4:55pm AEDT

Related Story: BAE Systems faces prosecution over alleged corruption
Related Story: Uncertain future for defence company
Defence giant BAE Systems said it had agreed to pay fines of nearly $US450 million ($520 million) to settle charges brought by Britain's Serious Fraud Office (SFO) and the US Department of Justice.

The fines - $400 million to the DoJ, and 30 million pounds to the SFO - relate to investigations into BAE deals with countries including Tanzania, the Czech Republic, Romania and South Africa.

The defence firm admitted to making false statements to the US government about its compliance with anti-corruption regulations, and for failing to keep accurate accounts regarding a 1999 deal with Tanzania.

"The company very much regrets and accepts full responsibility for these past shortcomings," BAE Systems chairman Dick Olver said in a statement to the London Stock Exchange.

"These settlements enable the company to deal finally with significant legacy issues."

He said the firm had made significant changes to the way it operated and hoped that in future, "the company is as widely recognised for responsible conduct as it is for high quality products and advanced technologies".

Under the US deal, which still requires court approval, BAE has agreed to plead guilty to one charge of conspiring to make false statements to the US government concerning certain regulatory filings and undertakings.

The DoJ accused the firm of making hundreds of millions of dollars in payments to third parties, in the knowledge that the money would very likely be handed over to people to favour BAE in the awarding of defence contracts.

It claimed that before that, BAE had intentionally failed to put appropriate anti-bribery measures into place despite assurances to Washington that it would - and afterwards, it had failed to inform US authorities about the payments.

"The company will pay a fine of $US400 million and make additional commitments concerning its ongoing compliance," BAE said.

Acting US deputy attorney general Gary G Grindler confirmed the settlement, adding: "Any company conducting business with the United States that profits through false statements will be held accountable."

Under the British deal, BAE said it would plead guilty to one charge of breach of duty to keep accounting records concerning payments made to a former marketing adviser in Tanzania over the sale of a radar system in 1999.

BAE admitted the commission payments were not properly recorded, and it had failed to ensure its records were correct. It has agreed to pay 30 million pounds, of which some will be charitable payment for the benefit of Tanzania.

SFO Director Richard Alderman said he was "very pleased" with the settlement, and said it would bring an end to his office's investigations.

"The SFO has taken account of the implementation by BAE Systems of substantial ethical and compliance reforms... and has determined that no further prosecutions will be brought against BAE Systems in relation to the matters that have been under investigation by the SFO," it said.

British fraud investigators have been probing BAE's business activities for years, and the firm will hope Friday's deal will bring this to an end.

A decision by Britain's then prime minister Tony Blair in 2006 to drop a probe into BAE's arms deals with Saudi Arabia triggered a storm of controversy.

- AFP

[Unicorn]

If you think this one is bad, the Typhoon deal for Saudi Arabia is the gigantic elephant in the room, just waiting to crap over everyone involved.

Unicorn

[buglerbilly]

U.S. Partially Lifts Freeze on BAE Export Licenses

By william matthews

Published: 16 Mar 2010 16:36 Print | EmailThe U.S. State Department has begun issuing a limited number of export licenses to the U.S. branch of the British defense giant BAE Systems plc.

In general, export licenses remain frozen for BAE-made products or products made by others that contain BAE components. But on March 9, the State Department quietly made two exceptions for BAE products made in the United States.

According to a department official, export licenses may be approved for items that:

* Support U.S. and allied war efforts in Iraq and Afghanistan.

* Are related to existing programs for NATO and non-NATO allied countries.

The official would not identify the war supplies or NATO-related weapon programs the licensing exceptions were intended to unfreeze or to say how many licenses are involved.

BAE produces a variety of military supplies in the United States that might be useful in the Afghan and Iraq wars, from night-vision equipment to missile parts and mobile rocket launcher chassis.

And BAE is a major partner in the Joint Strike Fighter program that involves eight NATO members and Australia. BAE makes the plane's real fuselage and tail sections, electronic warfare systems, fuel system, flight control software, and crew life support and escape systems.

The department stopped issuing export licenses to BAE on March 1 after the company pleaded guilty to conspiring to defraud the United States and was fined $400 million.

BAE Systems plc admitted that it lied about complying with anti-bribery requirements of the U.S. Foreign Corrupt Practices Act. The period violated U.S. export-control laws, the U.S. Justice Department said.

The Justice Department said BAE paid more than $200 million to middlemen that the company hired to win weapons contracts.

The department also said the U.S. branch of BAE - BAE Systems, Inc. - was not involved in the criminal activity to which BAE Systems plc pleaded guilty. But the U.S. subsidiary was subject to the export license freeze nonetheless.

The State Department has not yet decided what to do about the freeze that remains on other BAE export license applications, the department official said.

"We're looking at what BAE pleaded guilty to determine" what action the department will take against the company, he said.