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Distasteful But Not Illegal, Say The Lords

The House of Lords ruled today that the Serious Fraud Office didn't break the law when it stopped its investigation into bribery allegations involving BAE Systems and Saudi Arabia.

In April this year the High Court in London slammed the SFO's decision. In its appeal to the Lords, however, the SFO argued that then-director Robert Wardle was justified in shutting down the investigation because of national security concerns. Wardle said he believed the Saudi threats to stop sharing anti-terrorism intelligence with the U.K government put British lives at risk.

All five law lords hearing the case agreed that the SFO acted lawfully. One of the Lords, Baroness Hale, said it was "extremely distasteful that an independent public official should feel himself obliged to give way to threats of any sort." Nevertheless, she said, the SFO's Wardle didn't break the law. And Lord Bingham said Wardle "was confronted by an ugly and obviously unwelcome threat." But because he believed British lives to be at risk, his action in stopping the investigation was justified.

The High Court in April rejected the SFO's argument that it was powerless to resist the Saudi threats. "So bleak a picture of the impotence of the law invites at least dismay, if not outrage," the court said. It added that to give in so easily "merely encourages those with power, in a position of strategic and political importance, to repeat such threats, in the knowledge that the courts will not interfere with the decision of a prosecutor to surrender."

U.S. authorities are continuing their investigation of BAE's sales to Saudi Arabia.

BAE has denied breaking any laws.

View our prior posts about BAE here.

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Full post as published by The FCPA Blog on July 29, 2008 (boomark / email).