Publication: The Guardian Issued: Date: 2007-05-14 Reporter: David Leigh Reporter: Rob Evans

Swiss Launch BAE Inquiry over Alleged Money Laundering

 

Publication 

The Guardian
Date

2007-05-14

Reporter

 David Leigh, Rob Evans

 

· Bern team will have access to billionaire's accounts
· Investigation into Saudi deal could be reopened

The corruption investigation into BAE's Saudi arms deals, a cause of international uproar when the Serious Fraud Office abandoned its inquiry in December last year, could be reopened after all thanks to moves by the authorities in Switzerland.

Federal prosecutors in Bern launched at the weekend their own official investigation into BAE, this time for alleged money laundering. Investigators there will be able to examine Swiss accounts held by billionaire middleman Wafic Said, who is regarded as a potential witness. Mr Said declines to comment.

Hundreds of millions of pounds are reported to have passed through the accounts, from an offshore company secretly owned by BAE called Poseidon.

The files have been already gathered by the Swiss authorities.

But as Mr Said's records were about to be accessed by police in London, Tony Blair claimed that national security was at stake unless the British investigation into the Saudi royal family was called off.

The Swiss announcement comes only days after BAE's chairman, Dick Olver, sought to fend off corruption allegations at the company's AGM, claiming there had been "no bribes".

It marks a dramatic widening of the worldwide inquiries into Britain's embattled arms company, and may have a significant impact on its international position.

The federal prosecutor's office in Bern announced: "Relating to BAE Systems, the Office of the Attorney General of Switzerland confirms having opened its own investigation into possible money laundering."

The scope of the investigation is being kept secret, the Swiss authorities said. But they disclosed that it followed a report from the MROS, the Swiss money laundering investigative authority. Swiss banks are required by law to report "suspicious transactions" to the MROS.

Last week, prosecutors from Switzerland also linked up with those from four other European countries at a meeting convened in The Hague by Eurojust, the EU's new anti-organised crime unit.

The group, from the Serious Fraud Office in Britain, Sweden, the Czech Republic and Austria, said they had joined forces to investigate bribery allegations over bids to supply Anglo-Swedish Gripen fighters. BAE said it had not been aware of the Swiss move. The firm said it had a strict ethical policy: "We will not tolerate bribery."

BAE's secret operations in Switzerland have emerged at the centre of many of the worldwide allegations against the company. BAE moved its global system for paying agents there in 1997. A BAE front company, Novelmight, was registered anonymously offshore.

With the help of the Swiss branch of Lloyds TSB bank, BAE set up a discreet vault in Geneva, regularly swept for bugs and watched by security cameras. The company's most secret files were then allegedly loaded into a van at company HQ in Farnborough and driven across Europe to be locked in a safe there.

This has hampered SFO investigations. In a 100-page dossier sent seeking assistance to South Africa, the SFO reportedly said a cause for suspicion was "the failure of BAE to produce documentation believed to be located in office locations in Switzerland".

A Geneva-based company has also been named as the alleged hidden intermediary for payments on BAE deals in the Czech Republic. A second offshore company set up by Swiss lawyers is alleged to have collected payments for the head of the Czech state arms company.

In South African arms deals, BAE is alleged to have paid £8m to a Swiss entity with concealed ownership, Brookland Management, located in Neuchatel. Its manager, British accountant David Clark, refuses to say who owns the company.

With acknowledgements to David Leigh, Rob Evans and The Guardian.


*1       Just what has the national security of the UK got to do with the Saudi royal family?