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 *1."
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 *2 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.
With acknowledgements to Helen Power and Sunday Telegraph.
*1And extremely, extremely slowly.
*2In the SA deal, CEO Sir Dick Evans and Ian Macdonald,
head of BAE's IMSO (International Sales and Marketing Organisation) are the
chief suspects.
Evans approved the payments while Macdonald along with Richard Charter
identified the beneficiaries.
The prime beneficiaries (apart from Richard Charter himself *3) were Joe Modise,
Fana Hlongwane, the MK Veterans Association, the ANC, Some Among Us and inter
alia.
*3Richard Charter built himself a magnificent multi-tens of
millions estate somewhere in the north west, a huge game farm on the banks of
the Orange River and an exclusive home in Hermanus. The latter is right on the
border of the Admiralty Zone right above the whale watching area. He demolished
the original house and rebuilt another tens of millions of Rands home.
The bribes for the Hawk and Gripen deals amount to about R1,5 billion (in 1999
Rands).
Only one Gripen No. SA01 has been delivered to the SAAF so far. Actually the
completion of its pre-delivery flight test programme took place at the Test
Flight Development Centre (TFDC) at AFB Overberg near Arniston on 17 January
2008 before returning to Denel Aviation for a fresh paint job ahead of delivery
to the SAAF in this month (March).
So watch that space.
In the meantime, further Gripens are going to be delivered to the SAAF at the
rate of about four per year for the next seven years or so.
So if the SFO hurries up and get its act together in getting BAE convicted,
Armscor can invoke its Remedies in case of bribes clause and get our money back
plus 10% of the escalated contract price.
Sounds like a deal Terry Crawford-Browne would "die" for.
Then we can spend the money on giving our 38-odd Cheetah C third-generation jet
fighters a 10-year life extension and fly these until 2022.
In about 2015 and if we've still got a country left after Zuma and Mo Shaik have
had six years of tearing the rest to pieces, we can institute a new jet fighter
acquisition, stating off with a national security and risk analysis, then a
Project Study, then a Staff Target, then a Staff Requirement, then an
Acquisition Plan and finally a Contract to the lowest conformant bidder.
Hopefully Parliament will approve it this time, even get an inkling from time to
time what's going on.
Then in around 2020 / 2022 we can see some Joint Strike Fighters or whatever
flying around our airspace with some truly proud SAAF and DoD acquisitions
officers in attendance.
Unlike now where they and their SA Navy equivalents slunk off into the shadows
when names like British Aerospace, Thomson-CSF, African Defence Systems, Thyssen
and Ferrostaal are impolitely brought up in the conversation.