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The U.S. Is Gathering Evidence Against BAE

The U.K. and Saudi governments deny that any laws -- including the U.S. Foreign Corrupt Practices Act -- were broken. But questions persist about the £1 billion payment earlier this year by U.K. defense giant BAE Systems to Prince Bandar, the former Saudi ambassador to the U.S., for brokering his country's purchase of 72 Typhoon jet fighters.

The November 26, 2007 online edition of the Guardian newspaper now says the U.S. Department of Justice obtained documents from Swiss banking sources and more evidence from a U.K. businessman who was part of the deal. "According to US sources," the Guardian says, "businessman Peter Gardiner, who possesses boxes of invoices allegedly detailing payments made by BAE to members of the Saudi royal family, was flown by FBI agents to Washington on August 20 to give testimony there. It was arranged for him to travel via Paris to avoid British attention. Department of [J]ustice investigators are also seeking out the location of other potential witnesses from the UK. When Washington's moves came to light, US sources say that protests were made by the British, and Gardiner was warned his testimony was 'contrary to international protocols'. Gardiner refuses to comment."

The Guardian and other sources also report that Prince Bandar has retained Louis Freeh, a former head of the FBI, to represent him. ?There have been no charges filed,? Freeh said in an interview with a U.S. newspaper. ?The prince denies any impropriety and violating any statutes in the United Kingdom or the United States.? Some of the payments being investigated reportedly involve deposits to U.S. bank accounts controlled by Prince Bandar directly or through the Saudi embassy.

BAE Systems describes itself on its website as "the premier global defence and aerospace company . . . . With 96,000 employees worldwide, BAE Systems' sales exceeded £15 billion (US $27 billion) in 2006." It says it's the 3rd largest global defense company and that its U.S. operations make it the 6th largest defense company in the United States.

If BAE or Prince Bandar or both are charged or threatened to be charged with violating the FCPA, will they assert as an affirmative defense that "the payment . . . that was made, was lawful under the written laws and regulations" of Saudi Arabia? If they can prove that, then they're off the hook.

View the Guardian's November 26, 2007 Story Here.

Full post as published by The FCPA Blog on November 25, 2007 (boomark / email).

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