BBC BLOGS - Peston's Picks
IN ASSOCIATION WITH
« Previous | Main | Next »

BAE: Can't pay, would like to pay

Robert Peston | 08:09 UK time, Thursday, 1 October 2009

If, as expected, the Serious Fraud Office announces today that it intends to request permission from the attorney general to prosecute BAE, that will be an important milestone in perhaps the most sensational criminal case ever against a big British company.

RAF typhoon jetIt comes after years of investigations into allegations that BAE paid hundreds of millions of pounds in bribes to secure contracts from Africa, to the Middle East to Eastern Europe. It also follows BAE's admission last year that it hadn't in the past employed the highest ethical standards in the way it won business and promised to clean up its act.

But here's what may surprise many.

BAE, Britain's biggest manufacturer, would dearly like to make a limited admission of guilt, pay a fine and move on.

It would love to settle the case by plea bargain and turn over a new leaf, to use the cliché.

That's wholly rational, in that most of the senior executives of the company weren't with the business in the period when, by its own admission, it wasn't as scrupulous in its business practices as it would now like to be.

But its directors have a legal duty not to hand over cash or damage the reputation of the company - through what would be seen as a confession of wrongdoing - unless they are advised by their own lawyers that the SFO has an overwhelming case.

And they feel that the sum of money being demanded by the SFO for a settlement - between £1/2bn and £1bn (as disclosed by the Today programme) - is not warranted by the strength of the case.

It will continue to negotiate with the SFO to reach an agreement to cease hostilities.

The balance it has to strike is between the attractions of removing the heavy millstone of the case from around its neck, and the potential damage to its ability to win business in the future from sensitive international customers (typically governments) if it were to make a frank admission of guilt.

The stakes are high, not only for the company and its shareholders. Whether you love or hate that BAE is a world leader in defence, it is the biggest manufacturer in the UK and is a significant part of the British economy.

Comments

Page 1 of 3

  • Comment number 1.

    We seem determined to shoot ourselves in both feet over this. A 'dash' is the way of the world in many places and if we do not do it then other countries defence industries will.

  • Comment number 2.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 3.

    Paying out to gain advantage and avoid prosecution sounds very similar to the stuff BAE is accused of doing in the past, talk about one law for them and one for us, where is the control of big business? how do they hide such vast sums of money? regulation, its a joke.

  • Comment number 4.

    This is insane, it is not as if they were bribing British officials, but foreign ones, which is how you do business in these places. We cannot compete with realists like the French and Chinese with one hand tied behind our backs. Far from the SFO's skewed morality of whitchunting a solution to a non-problem, BAE should be lauded for the initiative in keeping British workers in jobs.

  • Comment number 5.

    Got to agree with post 1!

    As a country mhy aren't we encouraging other governments to make sure that their defence contractors clean up their act. All this will do is cripple one of the last few world class companies that reamins in the UK whilst the competition (mainly US based) merrily tosses cash around to get deals (allegardly!)

  • Comment number 6.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 7.

    There is a thin line between "bribery" which is illegal and "paying commission" which is legal...in some countries it is impossible to do business without such payments and the UK is shooting itself in the foot, i dont see any German or French companies suffering this fate....

  • Comment number 8.

    What planet are the SFO and those members of the UK Public yelping for prosecution of BAe,living on?
    How is it imagined that large Arms contracts are secured in the Middle East and Africa?
    On the one hand the UK Government supports the fraudulent re-election of a Government in Afghanistan, and sends ill-equipped British Forces to their deaths in that country, but considers it illegal that contracts are negotiated on the basis of commission payable to a company's agents in an arms purchasing country. More often than not, these turn out to be the Defence Minister or other member of the ruling family, without whose coperation or signature, the contract wouldn't be awarded in the first place; One man's bribe is another man's agency commission.
    If BAe wasn't oiling the wheels in this manner do you think that the French and the Americans and the Germans would be playing whiter than white?
    Do grow up and grasp the real politik of dealing with this whole distasteful business.

  • Comment number 9.

    Fat cat lawyers and BAE competitors will be salivating awaiting the outcome. Pity the same can't be said about the workers or shareholders.

  • Comment number 10.

    Anybody out there thinks this is not normal business practices for defence companies. Take away the even playing field and BAE will be in trouble. I'm sure the Americans won't be prosecuting their companies. How many workers will BAE need to let go on this statement?

  • Comment number 11.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 12.

    Madness. BAe are doing the right thing in the nest of vipers that is international business. If they did do those things - WELL DONE! They've enriched the country and secured British peoples futures. Who is going to pay for the SFO ivory tower now - themselves I suppose as they'll be £1bn richer.
    I can't fathom why the state is penalising business for winning huge contracts - which they also get vast sums from corporation tax.
    I agree with investigating internal (to Britain) fraud as this doesn't help competition, but external to Britain - they just don't play like that. The SFO needs to employ people who have had real jobs and are not just pious bureaucrats

  • Comment number 13.

    However we like to think that the rest of the world behaves as we would like to do.....the reality is that it doesn't.
    There are many corrupt regimes around the world who expect bribes from companies before their contract proposals will even be considered.
    All BAE are doing is operating in the real world. It may be distasteful to us, but it is normal business practice in other parts of the world.
    I remember the story a friend of mine told me many years ago. She was working in Africa, but was then thrown out. Why? Because she couldn't afford the bribe that the official demanded to have her visa renewed!

  • Comment number 14.

    If you want to see hoe America does a deal, search for Starfighter bribery.


    This article explains the French view on these matters:

    http://www.strategypage.com/militaryforums/54-573.aspx



  • Comment number 15.

    Can think of three points.

    1. Were these deals entered into before the law was enacted?

    2. Why are the individuals not being pursued by the SFO?

    3. Who if any of the Executive are still around at BAe?

    It does look like we are emasculating our companies with this sort of procedure. As another poster said they were not bribing UK officials, and it is common practice in some places.

    So if the deals were before 2001 they were not illegal, BAe is under a different management and no longer provides sweeteners. Surely it was specific staff members who authorised these alleged payments, so they are culpable.

    What moral authority does someone guilty of wrong doing have to recommend the prosecutuion of BAE?

  • Comment number 16.

    where would any fine go to? The losers seem to be the peoples of the countries concerned and perhaps the workers in various foreign countries whose companies did not offer bribes (or offered smaller ones). Are they to be distributed this massive fine?

  • Comment number 17.

    BAE finds itself in a difficult position, if, as alleged, previous managers of the business did offer incentives to win business for the company. I suggest that the distinction between incentive and bribe can be very close indeed and if indeed the benefits from these alleged"bribes" did not accrue to individuals but to the company and the country as a whole.It should be quietly dropped and BAE allowed to continue on its way as an extremely well run company and profitable company. As for Baroness Scotland's office coming to any conclusions on whether to proceed with a criminal case when she herself couldn't get the employment of foreign labour procedures correctly administered, doesn't fill me with confidence.
    No doubt politicians will join in the hue and cry but collectively I think they have to clean up there own mess first before claiming righteous indignation on the BAE situation. The stakes are high here both for the company and its employees so careful conclusions have to be considered.

  • Comment number 18.

    This is beyond belief. Perhaps the SFO want to notch up a case to validate their existence? Surely some form of compromise can be found in the best interests of not funding bottomless pits of legal costs and destroying the credibility of one of the last remaining manufacturers in this country?

  • Comment number 19.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 20.

    robert, is this not a similar situation to the banking crisis. The people who ruled over this mismanagement have now gone and the company is left to suffer. No doubt they would have been well rewarded at the time safe in the knowledge that if it gets difficult they can jump ship. Surely this is another example of executive officers indifferance to the long term interest of the business. make them responsable not the company.

  • Comment number 21.

    I know, let's potentially destroy 30,000 skilled UK manufacturing jobs in the middle of a recession - Is that really in the national interest?

    Thanks Clare Short/Richard Alderman, your principles are a credit to the nation.

  • Comment number 22.

    # 9. At 08:57am on 01 Oct 2009, albertobalsam wrote:
    Fat cat lawyers and BAE competitors will be salivating

    ++++++++++++++++++

    The SFO is filled with? Let me guess! Some sort of lawyers? This could drag on and on and on. Nice work if you can get it. And the winners?

    Yes, the lawyers.

    Gordo, get down to the SFO and straighten them out. Now!


    Toldyouitwould

  • Comment number 23.

    ah, the "British Disease" in full flow. It really doesn't matter if its sport, business, arts or entertainment. If a Brit is successful at something then we must denigrate and punish them. All Bae have done is what foreign companies do. the fact they sicceeded means they must be punished. And any fine they get?? Well folks, that goes into government coffers, think about it.

  • Comment number 24.

    The so-called custom of paying dash, or any other type of illegal transaction is so common in developing countries (and many developed countries) precisely because companies such as BAE have used it so often in the past. Eg. receiving dash in West Africa is illegal, and everyone knows it, and it developed out of the oil industry's profligate use of bribe money to cover up the woefully inadequate management of its operations (in terms of environmental, employment and local community responsibilities).

    Yes, we would lose opportunities to our competitors, but if that is the only reason you can come up with for justifying the extistence of practices that contribute in no small measure to maintaining miserable conditions throughout the developing world, then I am afraid you need to take a long hard look at yourself.

    Moreover, those who claim that conditions are easier in France and Germany, eg., are unaware that these countries are now also beginning to clean up their acts ... Russia I don't know. The EU could provide more effective leadership on this issue too, and no doubt is already doing so.

  • Comment number 25.

    Moreover, why does the UK government spend so much time and money helping arms manufacturers in this country and lets other decent manufacturing companies go to the wall? We sell other countries weapons which they use to kill each other and we think this is a good thing? Let BAe go to the wall. Use the money saved to finance something worthwhile.

  • Comment number 26.

    Instead of prosecuting BAE they should be congratulated. Would it have been better to let Boeing or our "allies" in Europe pay the bribes and get the contracts. They probably do and they won't get prosecuted.

  • Comment number 27.

    British jobs in exchange for Indonesian lives. I like the sound of that! ... Sad really, that people think this is a worthy exchange.

  • Comment number 28.

    Will this whole episode fall under some EU law to applied equally across industries across the continent?

    This is all historical, and by your own admission, the directors at the time and presumably the countries they had to deal with are all history too. What is the point in applying today's morality to yesterday's "custom and practice"

    Or by the same token can we use the law to prosecute Brown for his fiscal negligence?

  • Comment number 29.

    We are now plumbing the depths of the absurd!

    To export armaments you need an Export License from the DTI or whatever bloatedly long name it has these days.

    If there is a failure then it is a failure of regulation. What again? Oh yes? What is the point of having all these regulators if they do nothing?

    In the end the entire matter comes down to jobs in the UK: grubby manual jobs done by working people. How vulgar! How dare they: this working class thing is so terribly naff, isn't it? Why can't they just eat cake?

    Clearly we can't all be regulators but if we end up with no industries to regulate then I suppose we can get rid of the regulators, can't we? Our regulators had better step up to the plate and do some regulating for a change as their jobs are now in the firing line!

    I control millions of pounds of expenditure. I have been offered bribes, inducements, hospitality and so on but it is all politely declined with the request that if there is spare money for that sort of thing then take it off the price of the service.

    The way to manage corruption is to make it the responsibility of the recipient. That'll stuff the PR industry good and proper and leave all those politicians without a free lunch!

    Lastly, the idea that Baroness Scotland is to decide this just beggars belief. I hope the documents get read this time. Perhaps someone should send her some cake, but who is left to sweep up the crumbs?

  • Comment number 30.

    I appreciate it might be normal practice for such businesses but should these businesses exist in the first place? We would have issue if it was an black market supplier of small arms, just because it's a large legal company that contributes to the already corrupted British / world economy doesn't make it's trade any better and the "normal" practice of corruption doesn't make it right.
    Secondly if they have been found guilty of bribery then it seems only reasonable that a penalty is paid - however steep it seems.
    Trying to pay a fine and sweep it under the carpet is a pretty weak cop out.
    Seems like yet another powerful company / institution believing it can do exactly what it wants with no regard to integrity or honesty when driven by greed we seem to find any reason to justify the means...it's got to stop.

  • Comment number 31.

    Quelle Surprise!

    An earlier investigation into fraud was dropped due to 'National Interest' but now that the 'National Interest' has changed from winning defence contracts (regardless of the morals used to win said contracts) when times were good to today where cutting spending by any means necessary (fines, taxes etc rather than cutting back on waste) is the order of the day.

    Its quite convenient that BAE should be penalised now and not any time in the past few years.

    Why Serious Farce Office?

    This smells bad.

    It stinks to the heavens....

  • Comment number 32.

    It is quite BAD enough that Britain is the third largest arms exporter in the world and busily fuelling the slaughterhouses in the Middle East and elsewhere. Militarism is the curse, passed on from generation to generation through assumptions of inevitability. BAE Systems seems to be just another disgusting example of fat cat investors profiting from someone else's misery. If they have been following policies based on corruption of course they should be prosecuted. 'SFO's skewed morality'? 'If we don't do it someone else will'? WHAT redundant thinking is this? So, employ '30,000 people' (if this is even slightly accurate) elsewhere. What gives anyone the idea that blowing someone else's children to pieces is a strategy for economic recovery along with paying foreign princes for the privilege? Disgraceful.

  • Comment number 33.

    Just because "everyone else" (apparently) does it, doesn't mean that we should.

    This government came to power promising to be "whiter than white". And even though they failed miserably it is still a worthy aspiration.

  • Comment number 34.

    The Serious Fraud Office doesn't have to go looking for work like this, which in the end will be fudged and do nothing but harm to our defence industry. A short stroll down the road by their ever-eager investigative staff to the House of Commons, where a large number of people require detailed scrutiny, might be more appropriate and timely. Caledonian Comment

  • Comment number 35.

    "21. At 09:15am on 01 Oct 2009, TarnishBoffin wrote:
    I know, let's potentially destroy 30,000 skilled UK manufacturing jobs in the middle of a recession - Is that really in the national interest?

    Thanks Clare Short/Richard Alderman, your principles are a credit to the nation."

    But remember G Clown needs every penny he can raise, so a 1billion windfall from this is worth the odd job loss so he can get a little extra cash to spend on his latest re-launch. At whats the odd job when your fighting for another 4 years.

    Simples!

  • Comment number 36.

    The irony is that BAE probably used the threat of redundancies, when we could afford to have a few, to convince Blair to back them in selling an unsuitable air traffic control system to Tanzania. Now we are on our employment knees (and would be on our backs except for Brown's borrowing, for which we will dearly pay later), this government is having to force our largest manufacturer to pay millions in fines - which will surely lead to redundancies. And we are being told we are through the recession; I don't think so.

  • Comment number 37.

    The posts on this blog almost beggar belief. BAE sold Tanzania, one of the poorest nations on earth, an air traffic control system they did not need for an airforce that they did not possess. It is simply unbelievable that anything other than bribery of the most venal sort could allow this kind of deal to go through. That is utterly despicable. Those condemning Clare Short as International Development Minister for trying to prevent this deal have, I'm afraid, earned my contempt.



    Any job that depends on other people's starvation is surely a job that we, as a rich nation, can do without?

  • Comment number 38.

    ref #25

    I must be coming in from left field here, exactly waht money does the government put into Bae - actually NONE, they take it OUT, in taxes and as we can see, FINES!

    So what money are you talking about saving.

  • Comment number 39.

    All the comments (bar one or two) follow a pattern, that if we don't do it someone else will and we'll lose out. So why did the government get such a kicking for stopping the Saudi investigation? Or was that just a chance to put the boot into Blair?

    I agree, this is normal practice in an incestuous industry; defence is a dark industry and to suppose otherwise is the same as thinking that Gaddafi is a sound moral guiding light. The government should shut down this investigation again lest we damage irreparably our last great manufacturer. Gordon I think would finally get some credit if he did to protect British jobs.

  • Comment number 40.

    Who says the managers involved in setting past business policies at BAE have all left? This isn't true. The majority are still around. Practices in Saudi Arabia are now carried out through third party companies in which BAE has majority but low profile ownership.

  • Comment number 41.

    With their history of corruption in general, including SFO investigations into Saudi slush funds and reports of bribes to Law Lords to directly intervene in debates on their behalf and influence policy in our own country, it's not a surprise to see this come about.

    The 'ethical foreign policy' of New Labour turned out to be nothing but nuspeak, with an increase in arms sales to ethically dubious regimes and despots. It's time to convert BAe into a producer for different industries - any manufacturer building machines with the specific purpose of killing people needs to be outlawed in our country, and their highly skilled engineers put to better use in productive and proactive jobs for the betterment of the species.

    We don't need protectionism of UK jobs at the expense of foreign lives anymore, it's counterproductive. If you eventually kill off all your foreign customers with your goods, then who can you sell to? It's simple economics for anyone, even those who are morally challenged!

  • Comment number 42.

    # 27 DrDelbert wrote:
    British jobs in exchange for Indonesian lives. I like the sound of that! ... Sad really, that people think this is a worthy exchange.

    ++++++++++++++++++++++

    I take your point DrDelbert.

    We will just sit on our hands and let other countries defence industries prosper shall we?

    No. We do need our own viable defence industry so we can sit safely on our posteriors and have these high minded thoughts.

  • Comment number 43.

    What surprises me in all of this is that no one seems at all concerned with BAE selling sophisticated arms systems to despotic regimes i.e. the Saudis

  • Comment number 44.

    What surprises me in all of this is that no one seems at all concerned with BAE selling sophisticated arms systems to corrupt, despotic regimes i.e. the Saudis

  • Comment number 45.

    Just a quick question.

    Is paying sweetners fraud?

    Or are the SFO looking for work?

  • Comment number 46.

    Well done SFO! Whilst we are forced to play cricket by the rules, the rest of the world looks on and laughs in disbelief! BAE are simply playing by the unwritten rules of various nations, as distasteful as it may appear to some. Whilst we, as a nation, are "in the dock" our competitors are forming a queue behind us rubbing their hands.

    Never mind, at least we can sleep safe in the knowledge that whilst our Manufacturing industries go to the wall, at least we played with a straight bat! Simply unbelievable naivety by the UK - again!

  • Comment number 47.

    "37. At 09:58am on 01 Oct 2009, PorterRockwell wrote:
    The posts on this blog almost beggar belief. BAE sold Tanzania, one of the poorest nations on earth, an air traffic control system they did not need for an airforce that they did not possess."

    And you dont beleive that the DTI, Foregin office and goverment possibily including downing street were not heavily envoleved in the bid process let alown granting the export licence?

  • Comment number 48.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 49.

    What is it with the UK; BAE hasnt done anything that is anything but normal in the industry in which it operates.
    If most of its rivals are willing to offer sweeteners when going for a contract and BAE isnt it will go out of business, full stop. It seems our government and the SFO are so completely naive or just plain stupid that they are willing to risk the future of one of the countries biggest employers.
    I guarantee BAE's rivals around the globe are literally laughing their heads off, whilst obviously spouting fourth about how unfair BAE has been to try and push the SFO and the British government to punish BAE to an extent that it is no longer one of their rivals.

  • Comment number 50.

    Lots of posts here saying 'if we didn't do it, someone else would'.

    This is the drug-dealer's defence - does it justify selling crack cocaine?

    We have double standards here. When it comes to giving humanitarian aid to some of these countries, it's 'You've got to have good governance first'. But when it comes to arms dealing, it's: 'Corruption? Yes, that'll do nicely, sir'.

  • Comment number 51.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 52.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 53.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 54.

    #37. PorterRockwell wrote:

    "The posts on this blog almost beggar belief. BAE sold Tanzania, one of the poorest nations on earth, an air traffic control system they did not need for an airforce that they did not possess. It is simply unbelievable that anything other than bribery of the most venal sort could allow this kind of deal to go through. That is utterly despicable. Those condemning Clare Short as International Development Minister for trying to prevent this deal have, I'm afraid, earned my contempt.

    Any job that depends on other people's starvation is surely a job that we, as a rich nation, can do without?"

    How reassuring to see that there is at least one other contributor to this blog with principles.


  • Comment number 55.

    So the SFO has decided that it's original tack of "looking the other way" regarding BAEs' business pratices was the wrong one?

    Then why was "national security" cited as the reason for dropping the original investigation in 2007, as opposed to the truth, which was the the Saudis had threatened to abandon the (at that time unsigned) deal for 72 Typhoons if the investigation went ahead? Lo and behold, the investigation was binned and the deal signed shortly afterwards.

    Multi-billion pound defence contracts hold a lot of weight, particularly when the Saudis' Plan "B" would have been to take their money to France who would happily have sold them a fistful of Rafale fighters instead.

    Double standards? Surely not...

  • Comment number 56.

    Robert Peston grossly overplays the importance of the arms industry, in which BAE is the biggest player, to the UK economy. The 55,000 jobs supported by arms exports account for 0.2% of the UK workforce and less than 2% of manufacturing employment. A further 155,000 workers are employed producing equipment for the UK armed forces, but even the military industry total of 210,000 jobs makes up less than 0.7% of the UK workforce and around 7% of manufacturing jobs.

    Also, whilst £1billion is a lot of money, it is what BAE allegedly paid to Saudi Arabia's Prince Bandar to secure the military aircraft deals with that country.

  • Comment number 57.

    "The posts on this blog almost beggar belief. BAE sold Tanzania, one of the poorest nations on earth, an air traffic control system they did not need for an airforce that they did not possess".

    No, they actually needed it so that they could integrate with civilian air traffic control space in the surrounding areas and prevent aircraft from crashing. And before you castigate BAE for alledged bribes and inducements, you may want to look at the past practices of companies like Dassault and Lockheed. While it may be unethical, it happens and at the end of the day if BAE lose business, then they lose money, which in turn means job losses.

  • Comment number 58.

    I'm sure many criminals who e.g. robbed a Post Office would love to e.g. pay some of the money back (but keep most) and move on as they now claim to be "reformed characters".

  • Comment number 59.

    What surprises me in all of this is that no one seems at all concerned with BAE selling sophisticated arms systems to despotic regimes i.e. the Saudis

    And what about China and Russia selling arms to Iran? The US selling arms to Israel? The arms trade is reprehensible but it is a fact of life - until we as a species can overcome our desire to kill one another then people are going to continue to build weapons, and people are going to continue buying them.

  • Comment number 60.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 61.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 62.

    Well this is a puzzle. When suggestions of malpractice were made over the Saudi arms contracts, a "deal" was quickly done between powerful governments to appease and prevent an investigation. Suddenly, a few less powerful European states are flung into the news and the SFO are after serious money. So, is there evidence or not and if not, why is BAE prepared to plea-bargain? In this, the SFO is as underhand as any organisation. There'a lot of skullduggery about now that the Chancellor's coffers are looking a tad empty.

  • Comment number 63.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 64.

    I think more transparency is good for the British Economy and bad for the South Korean Economy.

  • Comment number 65.

    Judging by the comments on this page bar a couple, we are morally bereft. I am deeply ashamed of the sheer hypocrisy of it all. It is completely unacceptable to argue that "that's the way business is done" in any industry as a waiver for ethical and legal compliance. Consider diamonds and minerals from conflict zones, Agribusiness and enforced terminator crops, baby milk formula and the disposal of hazardous waste. If profit subordinates morals in every instance there is a conflict between interests, we get irresponsibility and excessive risk-taking. Leading to....I'm sure regular Peston readers can answer this one.

    If BAe or any other arms manufacturer or any corporation in any sector acts like this they should be heavily censured, to the point of criminal prosecution for their directors if necessary. Any complicit politician should be publicly castigated. Jobs will be lost and there will be an impact on the economy to be sure, but not as severe as the impact on the lives of the victims of this barbaric, corrupt and disgusting trade in death and destruction at the expense of democracy, development and public services throughout the development world.

  • Comment number 66.

    I can't believe that the SFO is going to investigate this. Afterall, when was the last time France or the US (or any other country) did something similar? In these countries, protecting national interests is paramount - and we should do the same.

  • Comment number 67.

    Why is everyone surprised by the workings of the Serious Farce Office. Not unlike the politicians, bankers and judiciary who manipulate us they have a vested interest in keeping them selves in highly paid renumeration at the publics expence. I feel a public enquiry coming on as this will keep the fat cat judiciary gainfully coining it in for many years. One only has to think of the Bloody Sunday enquiry which has cost £190 million for a finding which most people will not care about. This country would be best rid of them.

  • Comment number 68.

    Moderators a bit touchy, maybe key words trigger the blocking.

    Perhaps we should count the money in World Statesman of the Year's 0.7% of GDP as foreign aid???????????

    Regards

  • Comment number 69.

    Unusual for me to be in complete agreement with rbs_temp (#33 & 54) but on this one I am entirely.

    The 'everyone else is doing it so we have to' argument would be funny if it weren't so depressing. Taking a moral, ethical stand on business matters is surely not so far beyond us as a nation simply because we've had a rough ride economically?

    One thing I will say - I hope none of the posters who are justifying the bad behaviour of BAe with comments about similar behaviour by the Americans, French etc haven't at any point in the last few months joined in with the 'banker bashing' so popular on this blog. Surely to have done so would display an embarrassing level of hypocrisy, for all the much-maligned bankers in the UK were doing was 'business as usual'. Had they not behaved unethically, then some other bankers in different countries would have done so, to their huge competitive advantage, no?

    I am no apologist for the dubious moral behaviour of bankers, so therefore I am no apologist for the dubious moral behaviour of defence suppliers (or politicians, or automotive manufacturers, or teachers, or civil servants, or bin men, or milk men, or footballers, or...etc).

    As rbs_temp says, trying to be the best you can be 'is still a worthy aspiration'.

  • Comment number 70.

    Um, somewhat surprised to have been moderated out #11, can moderators explain why my asking that if everyone is 'at it', unethical though it may be, why the SFO is leaping all over it and potentially damaging a big British manufacturing company.
    I also asked where the money goes if BAE are fined a billion pounds? Do the SFO get to keep it in some way or does it go back into government funds and allow the govt to have cut the deficit somewhat?

  • Comment number 71.

    PS - is referring to the Prime Minister by the epithet 'Crash Gordon' now enough to trigger the moderators?

  • Comment number 72.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 73.

    got moderated out, can't think why.
    Second attempt

    Some of you seem to accept that we are now an institutionally corrupt country, and that these 'misdemeanors' should be tolerated.
    A co***pt government, an avaric**us legal system, and a generally l*zy media... -so why not bribery and largesse in our manufacturers.

    You forget that the UK still likes to see itself as above sordid dealings, and we think that the world should see that too.

    In which case we should thump BAe and anyone else really hard;
    Who knows if the mool*h went to the 'right' wrong people in any case.

    The plan should be to have the best products at the right price. Our only hope for the future exports of our economy is to beat the world on design quality and performance. I would rather be honourable and moral, but that is just me I suppose.

    If you tolerate corruption, you will sell anything.
    Perhaps BAe's armaments, land-rovers, software, jet-fighters, transport plans are all too cr*p to sell abroad without some greasing of the wheels.

    I hope that isn't the case or we're in real doo-doo (fine or no fine).

    Regards,

  • Comment number 74.

    At least Clare Short is a conviction politician and consistent in her beliefs. HOW do we present to the world, other than unscrupulous and greedy? No wonder we are now having trouble from those the West has consistently exploited. BAE Systems are possibly the tip of the chronic iceberg.
    The sooner we become a republic, with a bill of rights the better. It can't come soon enough. The citizens of this country have an absolute right to a transparent political system that transcends the harmful secrecy and dissembled reality of the elite aristocratic network of oath takers and allegiance swearers. Extending the Freedom of Information Act to include the monarchy would be a start, together with seriously questioning the role of our 'business ambassadors' regarding our arms sales.

  • Comment number 75.

    #56 and others.

    I don't know the full details but,,, seems very duplicous to me.

    It's fine for child labour and the third world poor to fund cheap imported clothes and food. Never mind what it has done to our manufacturing industry.

    It's fine to have a war based on Weapons of Mass Destruction that didn't exist. Never mind the 100,000's if innocent people killed.

    I didn't see any fines, jail sentences or even resignations other than Clare Short resigning from the cabinet - ALL CREDIT TO HER and my respect.

    UK families need these jobs, the UK military need a thriving UK defence industry thank to NuLabour war mongering.

    Don't get too hung up on bribes - it does go on as normal business practice in other countries as do Peerages and Directorships at J P Morgan for ex priministers,,,

  • Comment number 76.

    Nobody should condone corruption. But in the international arms business there is a real world. The measure is whether BAE sought to work within its murkey confines or whether it set out to streatch them to excess. There must be closure, which means a penalty for admitted wrongdoing. The margin between token and punitive is hard to define and will take tough negotiations. BAE clothed in righteousness and commercially impotent will be nationally useless and in terms of unemployment socially harmful.
    Great wisdom is called for here.

  • Comment number 77.

    My first attempt to post on this subject @ 61 was deemed to be 'defamatory' despite this knowledge being in the public domain.

    So I will try once more :

    Various Government investigations into the business practices of BAE since the 1970's have discovered all sorts of irregular goings-on.

    *** Paragraph redacted ***

    I left BAE as soon as I possibly could and mercifully, I have never worked directly for anyone i.e. as an employee, ever since that time.

    Whatever, the key point was that this had to happen to oil the wheels for these contracts and I suspect that this sort of behaviour had become pretty much institutionalised at BAE over the years.

    We are told that the Americans are very upright about this, do not tolerate corruption, bad for business, blah, blah.

    Yeah, tell it to the Marines, I do not believe that for a minute.

    If these companies want to do business with some of these regimes around the world, then they have to be prepared to sup with the devil.

    Usually with their respective Governments turning a blind eye until it slips into the public domain.

  • Comment number 78.


    In football terms this amounts to tapping up, illegal payments and breach of rules all in one! And think what just happened to Chelsea in this respect.

  • Comment number 79.

    It is really saddening to see how twisted the morals are of many posting here.
    "They do it so should we" absolute garbage, a demeaning view, rife in this country now, the Building industry fixing contractual pricing, a group of employment agencies recently fined for similar illegal practices, gang masters fiddling millions with illegal labour, this stuff is to light with a sickening regularity.
    Perhaps those here who see nothing wrong with bribery and corruption would like to see such behaviour extend right across our lives, paying bribes for NHS treatment etc, if you do not signal non toleration we could easily end up just like many thirld world countries.

  • Comment number 80.

    #42 Toldyouitwould. You really should try to raise your expectations and lift your gaze from the sewer. There is nothing particularly high minded in not wishing to kill people you have never met and who intend you no harm.

    Reading remarks like yours almost makes me have sympathy with the oligarchs who are busy turning you into an indentured serf.

  • Comment number 81.








    Odd what is and isnt acceptable. Its ok for banks to lend us money thats not theirs and for the government/tax payer to bail them out. Since Thatcher there seems to be an aversion to manufacturing, we can make money out of money, governments have been happy let manufacturing jobs be exported to the Far East. Finish off Bae and the job will be complete, no manufacturing, no banking, only services left, like working at fast food outlets, cutting each others hair and dialling non geographic/premium rate phone numbers. We are a de-developing economy!

  • Comment number 82.

    Maybe if they had paid commission to Blair and his band of thieves in the first place, the SFO would have been kept out of it.

  • Comment number 83.

    65 conciliation

    Of course we're morally bereft; look at the crooks who run the country. It all trickles down.

  • Comment number 84.

    Weak management and extremist unions destroyed the home owned, mass produced car industry and now we have sensible unions and world class management at BAE, the legal arm of government are doing the same thing. I'm sure that, from their nice, comfy, club world of the law, prosecuting BAE ticks all the boxes: morally correct and a very nice little earner, but for the rest of us who believe that the government should back manufacturing it's an incredibly un-patriotic decision.

  • Comment number 85.

    Ace prime minister, gordon Brown. LOL


    RESIGN NOW YOU B****Y FOOL!!!

  • Comment number 86.

    Walking down the street one day you meet a dubious character who asks you if you'd like to sell him the length of metal chain you happen to be carrying. You can see there are other guys who might like to sell him their metal chains instead. Meanwhile his bruised wife and children cower in fear. Do you:

    A - Sell him the chain on the basis that it's good business, it keeps employment in metal chain manufacturing and if you don't somebody else will?

    Or

    B - tell him where to get off, and do your damndest to get the other guys to do the same?

    Many of the posts here make me feel thoroughly sick. No doubt their authors would answer B every time - and they would do the same even when they have seen the chain sold first time round used to beat the wife and kids in question. They might even offer training in the most effective use of chains in beating people, just as we train foreign forces in the use of their weapons.

    The bombs and bullets we make and sell rip peoples bodies to shreds and condemn their countries to poverty. No doubt, from your coments here, many of you feel this is none of our concern. I beg to differ. We are responsible for the use made of the weapons we manufacture and for the opportunity costs to the poorer countries we sell to. If arms manufacturing is, indeed, such a significant part of our economy, then the sooner we are rid of as much as we can be the better. We seem to have achieved that for most of our other industries hasn't we? It's not as though we couldn't buy the weapons we need for our own defence elsewhere, is it?

  • Comment number 87.

    "BAE, Britain's biggest manufacturer, would dearly like to make a limited admission of guilt, pay a fine and move on."

    Sure they would - I expect that an SFO investigation would open a major can of worms.

    I would like to know how BAA managed to get export licences for their products. Only the Government can grant these.

    Tip of the iceberg ...................

  • Comment number 88.

    Whether the directors and decision makers who made these deals are still with BAE or not, that is immaterial - as it is BAE who profited. Doesn't mean the FSO should not prosecute these former directors though.

  • Comment number 89.

    #79
    "Perhaps those here who see nothing wrong with bribery and corruption would like to see such behaviour extend right across our lives, paying bribes for NHS treatment etc, if you do not signal non toleration we could easily end up just like many thirld world countries."

    Well, if we don't promote ourselves using what are, after all, standard business practices for big companies we probably will end up like a third world country. We have almost no British-owned manufacturing industry left (precious little industry at all, actually) and to prosecute our own country's corporations for enjoining in perfectly standard business practices is crazy. It'll kill off that little we have left.

    I'm not suggesting that ALL bribery should be regarded as legal so perhaps we should coin a new term for businesses trying to procure contracts (for the benefit of British work and jobs).

  • Comment number 90.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 91.

    Could someone tell me who Saudi Arabia have been at war with in the last 30 years or so ? No ? Thought not.

  • Comment number 92.

    About thirty years ago I was engaged on export. At that time there had been a 'Bribery' or 'Commission' scandal directed at Boeing at the time.
    Suddenly there was directives issued right left and centre that no British export deals should be anything but whiter than white. I was in Nicaragua at the time and met a sales delegation from Ericsson from Beeston, Nottingham who were soliciting a contract to instal a completely new telephone system in Managua. (There had been an eathquake and the contract was very large). Their leader, who in fact ranked very low on the management ladder had been told to do what he could but be 'Very Careful'! He told me that he felt helpless because he was aware that foreign competiton were not subject to the same constraints. We did not of course get the contract! I also had a friend in Hong Kong at the time and he told me that they had always previously bought Daimler Buses from the UK. The next time, they didn't do so! Someone else got the contract! When will these moral do-gooder learn that the way to hell is paved with good intentions and that it is the people who loose their jobs in the factories who are the first to suffer! Then of course, there are those little matters of the balance of payment and the National Debt!

  • Comment number 93.

    37. At 09:58am on 01 Oct 2009, PorterRockwell wrote:
    The posts on this blog almost beggar belief. BAE sold Tanzania, one of the poorest nations on earth, an air traffic control system they did not need for an air force that they did not possess.


    Alan Sugar would of definitely hired that salesman...makes you proud to be British !

  • Comment number 94.

    Talk about hypocrisy! Isn't the car scrappage scheme a system of bribes by government itself. "Along with the manufacturer, we'll give you £2000 towards a new car if you scrap your old one." What's that, if it isn't the same "immoral" business practice? Firstly half the money comes from other taxpayers' pockets and I certainly didn't approve that...I was waiting for the Old kitchen scrappage scheme. Secondly, how does it help the less well off who would love a new car but simply can't afford one even after the £2000?

    So, hmmmm, we have one rule for some and another for someone else. I think it's a crying shame when BAe's sentiments are obviously right: secure contracts (with a little help) for British jobs and people, thus nurturing what little industry we have left.

  • Comment number 95.

    #80

    I wish no harm to anyone. It seems to me that if no arms are sold to any countries, people will still die at the hand of their neighbours by sharp and blunt instruments.

    If we had not had a defence industry in the 1930's I think we may have been speaking German now.
    I only suggest we should not destroy our present industries.

    Toldyouitwould.

  • Comment number 96.

    i'm amazed at some of the thoughts in this blog that justifies what BAE is doing as "the necessary evil", that bribery is alright for as long the UK continue prospering, that justify BAE's actions as the mean to an end. it's a huge industry no doubt, but it just shows the mentality of the majority of britons and its corporate leaders, and i'm not at all surprised.

    if our government and leaders have been so vocal in condemning other nations on corruption and bribery, perhaps they should first look at themselves in the mirror.

    i have always preached transparency and have often times dropped multi-million deals and potential clients who shamelessly request for sweeteners, including foreigners. now, it would be utterly embarrassing if they now turn and say, well, u know what, your biggest manufacturer practices it, why shouldn't you.

    as a nation that prides itself for being one of the super majors of the world, this is utterly disgusting and shameful. yes, america does it as well with its oil industries, but does it mean that we should too? we have too many at stakes especially now that our country does a lot of work in developing countries and trade with a lot of countries in asia and the middle east.

    then again, it is probably pointless to argue with a nation that was built on precisely that premise.

  • Comment number 97.

    Preserve 30,000 jobs in an industry specialising in killing people??, mainly innocent people if you look deeper than the headlines. If we have any morals at all we should be looking to wind down the WAR industry and re-employ the infrastructure in making things we and the rest of the world's citizens want to buy.

    Just an idea but couldn't we start by becoming world leaders in the manufacture of solar panels, wind turbines, even nuclear power stations..... stuff that we actually need to meet our other comittments.

  • Comment number 98.

    #32

    Your post is spot on.

    Having travelled through countries where bombs and land mines have been used on millions of innocent people it is hard to justify any company or person who works in this arena.

    30,000 new jobs in green not mean technology perhaps.

    As for the fine (up to 1 billion), it would only pay for 2 days of this Governments shortfall in revenue.

  • Comment number 99.

    Yet more political correctness gone mad.

    The fact is, if BAE weren't doing this, other nations abroad would. You only have to look at the massive, and I mean massive scale of corruption in Iraq over the last few years with Halliburton and co.

    Someone's going to supply arms to countries that shouldn't have them regardless, better it's us and we take the money and taxes it generates to put back into solving the issue than have somewhere like Russia win the contract and put the cash into making the issue worse.

    Crippling British business like this wont help anyone and will only harm us. It's a case of shooting ourselves in the foot. It's rather telling that more effort seems to be getting put into tackling fraud here than tackling the fraudulent cases of the MP expenses scandal, all of which were dropped. If the moral do-gooders want to tackle fraud, their own backyard would be the best place to start.

    Blair allowed these contracts through because he understood the points I've made above- stopping the contracts would do far more harm both nationally and internationally than good.

  • Comment number 100.

    It would appear I've been censored. Hmmm. I did come out in support of rbs_temp, is that enough to get referred to the moderators these days?

    Most unfair on you, rbs_temp old chap...

    I thought my point was reasonable - to all those who say 'we have to behave badly because other countries do', I hope you haven't been bashing the naughty bankers recently. Apply the above argument to them and the fallacy of it is quite apparent. Or not to the mods, as the case may be...

    Unethical is unethical, whether you're the biggest manufacturer in the UK or not. Any other approach is surely hypocritical, and a road we don't need to go down, no?

 

Page 1 of 3

BBC iD

Sign in

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.