Howard Wheeldon says its time to get behind BAE and not drag up the past...
Given the unfortunate history and various damaging leaks that have occurred over the past few years from the good offices of the Serious Fraud Office (SFO), few will be surprised that the senior prosecuting arm of government has decided to make a formal application to the Attorney General for permission to prosecute BAE Systems over bribery allegations with respect to certain arms deals with Czechoslovakia, Romania, South Africa and Tanzania.
Once papers are submitted by the SFO – a process that will take several weeks – Attorney General, Baroness Scotland will be required to make the final decision whether or not she considers that the SFO has sufficient evidence of wrongdoing by BAE Systems. Though I am of course not a member of the legal profession, I believe that any prosecution must be based on corruption related law in existence at the time of any allegation. This will have to be taken into account in the review that Baroness Scotland will now conduct, along with a review of evidence and likelihood of a successful prosecution being achieved, the potential cost and the potential damage to the reputation of the UK that could occur. Not surprisingly, this process alone could take several weeks meaning that, assuming a decision is made to prosecute BAE, a case is unlikely to be heard until well into next year.
I can at this stage have absolutely no idea as to what evidence there is against BAE or how strong that evidence is. However, given press and media suggestions that presumably emanate directly from the Serious Fraud Office itself and with particular regard to apparent protracted attempts to persuade BAE Systems to agree a plea bargain – meaning accepting full or tacit guilt in return for an agreed and no doubt sizeable fine – one may be entitled to ask why it is that the SFO has made such a great issue of BAE’s apparent reluctance to acquiesce? It could of course be due to the case that will soon be presented to Baroness Scotland for review is far from watertight – insofar as quality of evidence perhaps or whether the possibly of concluding a satisfactory prosecution in court could be hindered by what the actual laws on corruption has been at the actual time of the specific allegations (the Anti-Terrorism, Crime and Security Act 2001 extended corruption laws to include bribery of overseas officials). Equally it could be due to the cost of bringing such action with respect to the historic nature of these allegations. Whatever, going the route of formal prosecution is certainly not an easy cut and dried process for the SFO as the organisation knows only too well and perhaps to its cost.
Meanwhile BAE Systems, as it has done from the early beginnings of the separate enquiries, will continue to co-operate with the SFO. Clearly, one way or another, it would be of huge benefit to all parties concerned – the SFO, the UK and other foreign customer governments that have been regrettably drawn into this dispute, and BAE – to see the current unsatisfactory position brought to a satisfactory conclusion.
if the Attorney General decides to throw out the SFO proposal it must only be done on lack of evidence, unsatisfactory likelihood of achieving a successful prosecution or simply on the grounds of ridiculous cost. But whilst it is time to draw a line on this with whatever action the Attorney General decides, I would like to see a repeat of the 2007 action when the government rightly in my view pulled the earlier separate SFO enquiry into allegations related to BAE’s dealings in Saudi Arabia on national interest ground.
Meanwhile my view remains strongly that BAE Systems should only go down a plea bargaining route provided any potential fines involved are significantly less than say £100m. The idea that fines of £500m+ should be accepted for tacit acceptance of guilt is in my view as ridiculous as it is completely unacceptable. Put more succinctly and assuming the Attorney General does allow a case against BAE to be pursued, I hope that the BAE message to the SFO will be the same as mine: ‘see you in court – please bring it on’.
Given that a revamped and strengthened BAE management has now implemented every recommendation made within Lord Woolf’s ethical review of how the company conducts international business with its customers I am content to believe nothing like this will ever occur again. That BAE has been damaged by the many allegation made is hardly in doubt. The company has already paid a very heavy price in my view despite always maintaining a position of innocence. Clearly such a view also says that what the SFO is proposing here may be unnecessary. It is also a view that says given that the laws on bribery and corruption have been strengthened beyond doubt and that BAE has implemented every conceivable measure to ensure that in future it is squeaky clean, the door on the past really should be shut. It is Time to remember just how important BAE is to our exports, to employment and jobs and to the economy overall. It is time to start supporting our biggest manufacturer and it is time to start supporting the defence industrial base in the UK – just as Britain’s competitors do so well with their own national industry champions. It is time to remember then that dragging this unfortunate and unnecessarily long SFO process out further will benefit absolutely no one except international competitors.
By Howard Wheeldon, Senior Strategist at BGC Partners.
What do you think? Is Howard right – is it in the national interest to let the dust settle on this matter? Or is the SFO justified in seeking a prosecution? Email [email protected] with your views or leavec a comment below.