BAE: Can't pay, would like to pay
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.
It 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.
I'm 
© MMIX~RS~q~RS~~RS~z~RS~41~RS~)
Comments
Sign in or register to comment.
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.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
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.
Complain about this comment
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.
Complain about this comment
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!)
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
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....
Complain about this comment
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.
Complain about this comment
Fat cat lawyers and BAE competitors will be salivating awaiting the outcome. Pity the same can't be said about the workers or shareholders.
Complain about this comment
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?
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
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
Complain about this comment
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!
Complain about this comment
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
Complain about this comment
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?
Complain about this comment
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?
Complain about this comment
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.
Complain about this comment
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?
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
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.
Complain about this comment
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.
Complain about this comment
# 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
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
British jobs in exchange for Indonesian lives. I like the sound of that! ... Sad really, that people think this is a worthy exchange.
Complain about this comment
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?
Complain about this comment
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?
Complain about this comment
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.
Complain about this comment
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....
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
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
Complain about this comment
"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!
Complain about this comment
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.
Complain about this comment
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?
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
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!
Complain about this comment
# 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.
Complain about this comment
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
Complain about this comment
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
Complain about this comment
Just a quick question.
Is paying sweetners fraud?
Or are the SFO looking for work?
Complain about this comment
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!
Complain about this comment
"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?
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
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.
Complain about this comment
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'.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
#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.
Complain about this comment
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...
Complain about this comment
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.
Complain about this comment
"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.
Complain about this comment
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".
Complain about this comment
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.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
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.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
I think more transparency is good for the British Economy and bad for the South Korean Economy.
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
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
Complain about this comment
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'.
Complain about this comment
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?
Complain about this comment
PS - is referring to the Prime Minister by the epithet 'Crash Gordon' now enough to trigger the moderators?
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
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,
Complain about this comment
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.
Complain about this comment
#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,,,
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
#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.
Complain about this comment
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!
Complain about this comment
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.
Complain about this comment
65 conciliation
Of course we're morally bereft; look at the crooks who run the country. It all trickles down.
Complain about this comment
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.
Complain about this comment
Ace prime minister, gordon Brown. LOL
RESIGN NOW YOU B****Y FOOL!!!
Complain about this comment
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?
Complain about this comment
"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 ...................
Complain about this comment
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.
Complain about this comment
#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).
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
Could someone tell me who Saudi Arabia have been at war with in the last 30 years or so ? No ? Thought not.
Complain about this comment
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!
Complain about this comment
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 !
Complain about this comment
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.
Complain about this comment
#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.
Complain about this comment
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.
Complain about this comment
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.
Complain about this comment
#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.
Complain about this comment
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.
Complain about this comment
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?
Complain about this comment
I'm glad to see so many "moral" people commenting here - it's reassuring that, as ever, the high-ground is occupied by sanctimonious fantasists who think they are the only people with ethics.
I'm not going to touch on whether there's an ethical difference between paying a bribe and accepting a bribe. Nor whether a practice legal in a foreign country should be subject to criminal sanctions here. Both are, of course, valid and interesting philosophical questions.
I do, however, need to rebut the comments suggesting that "warmongers" and "death-dealers" should be driven into the sea. I'm sure you commentors, personally, would never start a war or invade another country. That's nice. Sadly the fact is that there are a lot of people in this world who don't share your objections, and who - even if materiel were banned and obliterated - would fight wars and kill each other with nothing more powerful than rocks and pointy sticks.
We have a defence industry for two reasons: i) this is a free country and it's possible to profitably run a business supplying military hardware - if people wanted peace, there'd be no market, and the industry would atrophy; ii) because, some day, someone who doesn't think disputes should be solved by talking and hand-wringing is going to try to invade us or our foreign interests and we need to be able to defend ourselves - something that's not guaranteed if we have to rely on other countries' support.
Complain about this comment
It was either a case of BAe using "incentives" to win work for their employees or ultimately the Government "bribing" the workforce not to work by paying them dole!
Complain about this comment
Those who say we're shooting ourselves in the foot are spot on.
How much is this ludicrous and continuing investigation costing the already bankrupt taxpayer?
Complain about this comment
Having lived and worked in Africa for a few years I can confirm you simply cannot do business in many African countries without greasing the wheels to some extent.
I've been to African countries where I had to pay a bribe just to get through immigration even though I had a valid visa.
It's distasteful and difficult to comprehend but that's the way in which you go about your business in many developing countries.
Complain about this comment
As far as I can tell its a lot better for BAE to fess up and get it over and done with here rather than wait for the US to prosecute.
If we don't 'shoot ourselves in the foot' the US will take a head shot.
Complain about this comment
Why all this hoo-haa now? This was standard practice 40 years ago, major British contractors and every sub-contractor built an amount into their contract for 'contingencies' - everyone knew what it was for! The Government were well aware of the situation - they had also done whatever was necessary to acquire the contracts for British companies in the first place!
Complain about this comment
I have heard that BAE systems are going to be forbidden to operate in the UK and asked to move operations abroad at the loss of 30,000 jobs this will mean all military contracts cancelled and other ship building moved to another country possibly asia this came from a friend in the Business
Complain about this comment
There are a lot of precious consciences on display today arguing that other people should loose their jobs.
How many of these precious consciences work for national or local government which is funded by the taxes of the poor?
I have never worked for the state, I have never worked for an arms company and have found other employment when I have been unable to tolerate the business practices of superiors. These are my decisions and the consequences to me rest on my conscience.
I have no right to dictate to others what they should do. Yes, I will suggest to others that rather than do electronics or computer systems on a fighter plane that they find another outlet for their obvious talents but if they choose to do that work it is on their conscience and I have to respect that.
The fact that our country is a successful arms manufacturuer and supplier is disagreeable as it would of course be better that we did more constructive work. However, let me whisper in your ear; only the arms manufacturers get massive government support where exports are involved for the simple reason it makes the UK government's own purchases of arms so much cheaper.
Manufacturers of other products in the UK get little or no support from government which is why so many have closed down and there is so much unemployment.
So if you have a delicate conscience, as I do, then don't work for the state and be less ready to shout about the hypocrisy of others.
Complain about this comment
#37 well said.
Complain about this comment
RussWilliams (#101) - your point ii) about why we have a defence industry is both a little paranoid (is someone really going to invade us? Really? What have we got that's worth coming all the way over here for??) and also, wrong, in that defending ourselves is why we have an army, not why we have a defence industry. We could feasibly have one without the other couldn't we?
Anyway, I think a lot of people aren't objecting because they're 'sanctimonious fantasists'. I've nothing against BAE turning a profit (in fact I used to be a supplier to BAE, and indeed most of the defence contractors operating in the UK). My issue is with dodgy business practices across the board. I'm not naive enough to think they don't go on, I'm just possibly old-fashioned enough to think that when you get caught you get punished. Same rules for MPs, bankers, benefit cheats and defence suppliers - get caught and you do the porridge...
Complain about this comment
This continuing case is absurd. If you wanted to do business in this area (at that time, at least) you had to pay bribes. Those who didn;t pay bribes didn't get the business.
To start wringing one's hands now and saying we were all wrong is fatuous. The ethics are a question for the contry that paid them, not those who did business with them.
Complain about this comment
I worked directly for *** redacted *** in the early 1970's and *** redacted ***.
I left *** redacted *** 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 *** redacted *** 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.
Complain about this comment
sweetners like this are normal business practice in most other nations it still wont garantee a contract but still it is a recognised thing to try and get one it all depends on how big a sweetener your competiters offer for the contract on wether you get it or them
Complain about this comment
I don't understand why is it that the SFO aren't looking to prosecute the board of directors at the time they were the ones taking the decisions, the only thing that can help by fining the company is to destabilise it financially.
For me the fat cat directors keep saying that the reason for such large salaries is because they are responsible then let them take responsibility for there actions....
Complain about this comment
I see I have been censored.
Complain about this comment
A case of todays morals being applied to yesterdays cases.
Are todays morals right in this case?
Complain about this comment
Let's hope the SFO does "get its man." It had some luck with several of its investigations of the Water Companies, Thames, Severn, Southwest etc.
The SFO is one of the last lines of defence in terms of being a proverbial bulwark against Corporate corruption. The message isn't to the companies, as such, it should be going to the people who generally matter - The Shareholders. I hope they get "stung." They need to be taught that being a shareholder isn't a passive option.
But, yes, of course Britian would be better off With a manufacturing sector, than Without one. But that shouldn't stop us doing it properly! If the big bad U.S.A is forever cheating in this respect then shame them, take them to court, even dare I say institute sanctions against them. Either way do something, don't just moan about it.
Complain about this comment
So the SFO uses a load of taxpayer money to pursue BAE. If they win the money presumably goes back to the Treasury. So the main winners are the lawyers.
Complain about this comment
most arms deals are governement to government , with embargo on trade with others. But this is how the game is played on the world stage.
to simple out BAE for the past in this area would not be doing UK plc any great service.
take Angle Merkell and the GM subsidy is that not corruption then
Complain about this comment
I'm in agreement with #32. The manufacture of arms is abhorrent. End of.
Complain about this comment
The French, USA, and the other arms countrys must be laughing all the way to the bank.
If you want to sell anything into Arab and other markets you have to pay at least 10% to local party to get business.
Realy cannot understand this witch hunt to cripple BAE unless of course started by pressure on UK goverment from USA or other parties.
Complain about this comment
Come on, people! Regardless of one's individual regard for what BAe do/make, it is still a business and a major player in the British economy. Now, we haven't many of those left, have we? If we want to compete internationally we have to face up to "sweetening". You bet every other developed country does it. I mean, probably hundreds of thousands of UK jobs hang on it directly and otherwise.
What gets me is the hypocrisy. I'm surprised that giving a bribe is illegal at all. The more you think about it the more you realise you're victims of receiving bribes all the time:-
i) The car-scrappage scheme;
ii) Extra reward points when you buy more than... or buy some object. Perhaps reward points themselves are bribery.
iii) Cashback schemes which are a promise of bribery
iv) Not being penalised if you authorise companies to debit your bank account directly;
v) coupons in magazines on which you can get a discount.
and on...
There are many shades of meaning to the word "bribe".
In fact, is giving an impromptu discount substantially the same as bribery?
Complain about this comment
@James8112, 110:
Paranoid? I assume you predicted the Falklands in '82, then? The disintegration of Yugoslavia? The Somali pirates? Georgia? That our mutual-defence treaty obligations to Kenya might be invoked if a Somali militia crosses the border? Conflicts are, by nature, hard to predict, even from hindsight - real Black Swan stuff.
And, yes, that's what we have armed forces for. Armed forces who, when preparing for the Iraq invasion, were denied munitions from the NATO stockpile in (if memory serves) Belgium as they didn't support the war. That's the sort of thing that happens when you give away a sovereign capability and trust that other nations will be able and willing to plug the gaps.
As I said, I'm not going to discuss alleged corruption - just idiotic comments like "The manufacture of arms is abhorrent. End of." (#120)
Complain about this comment
I do find it amusingly ironic that the Americans claim the moral high-ground on this.
Go read a book called 'Confessions of an economic hitman' to learn more about the business practices of the likes of Haliburton and the other US defence contractors.
They didnt just stop at paying bribes - they lobbied congress to invade sovereign countries in order for them to rape them of their wealth!
Panama, the Saudis, Java and more recently Iraq - the list of countries that were pillaged is almost endless.
Their business model was to walk into a country and offer them infrastructure that was very much too developed and expensive for their needs.
When the infrastructure didnt deliver the economic growth that the Americans promised there wouldnt be enough money to cover the repayments.
The Americans would then 'negotiate' payment in kind which related, for example, free passage through the Panama Canal negotaited from Panama or land on which to build military bases etc.
Complain about this comment
A West African businessman once told me that a "dash" was acceptable but a "bribe" was unacceptable. I asked what was the difference between the two and he told me, without hesitation, that it was a question of the amount.
In these cultures the practice of sweetening deals is so common that they have different words depending on the value of the sweetener.
Complain about this comment
Sorry #122;#123 I could never work for a company such as BAE Systems and still sleep at night knowing what I was contributing towards.
Complain about this comment
The 'rule of law is not a luxury to be deemed superfluous when weighed against several thousand jobs. It is the bedrock upon which every contract stands.
The other party to these BAE contracts was a national government, not the politicians and civil servants taking bribes. BAE executives knew this. The next question is, are the contracts now void. Potentially BAE could find itself having to pay back the full price to the buyer and take back the goods in whatever condition they now are.
We should be very worried. Our largest manufacturer is dependent on bribery and corruption. Finance, our largest industry, has been bankrupted by it's own greed inspired fraudulent products. A widespread culture of defrauding the public purse has been uncovered in parliament. Our government is printing money to cover it's everday expenses while our competitors build real infrastructure.
We are in very serious trouble. We are a service economy. If our customers can't trust us, they will go elsewhere.
Complain about this comment
If BAE are turning over a new leaf from years gone by, don't you think what the SFO are attempting now is a form of extortion. If BAE's dealings are now totally clean and above board then don't try to ruin what is now a rarity, A truly excellent British company.
Complain about this comment
Robert - I can assure you that "sweetners" to win third world contracts are commonplace in the construction industry, as well as no doubt many other industries including defence. This is a fact and the Americans, French, Germans, Russians are all at it too. It is not the fault of the companies that this has to be done to win business, it is due to the corrupt governments of these nations. All that we will do by victimising these companies is to lose the business and the british jobs that go with them.
Complain about this comment
I can see that the consensus is that it is OK to do pretty well absolutely anything if it makes money. I would be interested to know whether some of the commentators here believe we should be willing to engage in human trafficking and drug smuggling if we can make a quick buck?
Complain about this comment
Oh, I see, the arms trade is just a great Job Creation Scheme, is it?
Remember that each arms sale kills twice - once if it can be used for its main purpose, and once by further impoverishing the ordinary people of the purchasing country - where the money would be better spent on health care, infrastructure, and, in some of the poorest, food for survival.
This is especially true of countries which need a bribe to achieve the sale. Almost by definition, the greater the bribe, the less the people of that country would actually benefit from the arms.
I can think of better Job Creation Schemes than this one, which, oh yes, remember,also gave us General Galtieri and Saddam Hussein, both champion arms customers of their time.
Complain about this comment
How pathetic!!!
Does anyone seriously believe that the arms industry is a pleasant one? The skullduggery that goes on would have to be seen to be believed, never mind all the smoke and mirrors that the political dimension entails. Why do you think that Tony Bliar called off the Saudi enquiry?
There are some rocks that you just don't want to look under. The whole idea of finding bungs distasteful is a joke. If you are looking for something really distasteful, I suggest you start with the arms industry itself. Now that is something that stinks, but hey-ho who said that the world is a nice place?
Complain about this comment
And another thing - I wonder what the Saudi beneficiaries of all this BAE munificence actually spent their money on? Haven't they got enough from oil to build palaces and stuff? Or was this all usefully un-traceable cash for somewhat more dodgy activities?
I think al Quaeda gets most of its money from Saudi, doesn't it? Hmmm...
Complain about this comment
The question is not about the morality of the arms trade: it is about how you do business in certain parts of the world. And sometimes it involves paying baksheesh. Smart, otherwise 'reputable' companies keep it out of their own books - and presumably out of sight of the SFO - by working with a local 'partner', who takes care of 'local issues'. May be the secrecy in the arms business makes such partners unacceptable or BAe are less hypocritical?
We live in a dirty world. We cannot change the way it works outside our borders. I would suggest that the SFO concentrates on what goes on in the UK and accepts that British companies have to play by foreign rules if they are to sell their products on foreign markets.
Complain about this comment
@janchild, 126:
Fair enough, and I respect your choice - it's just not the only possible/ethical one.
Apologies for citing your comment as "idiotic", it was just a much more concise quote than the other anti-arms-trade-no-matter-what ones.
Complain about this comment
Hello. Can you imagine the French prosecuting any of their arms companies? Do we believe they do not practice shall we say interesting ways of winning foreign arms contracts. The Germans who are presently seemingly bribing a certain car manufacturer completley against all EEC rules...do they care other than for their own interests....but wait along come the Brits....oh yes we can ruin our main maufacturers....we happily lose the jobs....we bow down all the time...why....just in reality what are those MP's on who are trying to destroy this company...I mean whose payroll...Russia...France...Germany...all of these???? They are the ones who need to be investigated not BAE for good ness sake...remember the Cambridge spy ring...well get real they still exist in the form of the various individuals pushing for this stupid prosecution....does anyone really believe they have the public interest at heart....
Complain about this comment
Seems quite difficult to post a comment that is blunt......
Moderated twice on this one so far.
(What if I gave you 50p to let this thru') -err that would be corruption
Some of you seem to accept the idea that we might be an institutionally corrupt country, and that these 'misdemeanors' should be tolerated.
A c------ government, an a--------- legal system, and a generally lazy 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;
In matters of corruption, presumably you should make sure you pay the right wrong people. Maybe they weren't very good at it.
The plan should surely 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.
Can anyone say whether BAe's armaments, land-rovers, software, jet-fighters, transport plans are all too crap 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,
Complain about this comment
That is OK then - stop British Companies 'trading' according to the conditions they not only face but which their competitors embrace.
No compensating orders from the EU nor within the UK so - a few thousand more jobs lost and skilled workers on permanent benefits.
This is how the export world is despite the practices which offend our puritan senses.
Time we grew up!
Complain about this comment
I could never work for a company such as BAE Systems and still sleep at night knowing what I was contributing towards..
What, like studies into how windfarms can produce more efficient energy withou disturbing the local environment? Graduate placement schemes that contribute towards our country being able to compete technologically with the rest of the world?
You should read their website - you will see that they do more than just build ships and tanks - they are actually working towards a better Britain.
Complain about this comment
Where does the SFO dream up the fine value. What imaginery formula have they used to make the punishment fit the crime, if indeed a crime has been committed.
Complain about this comment
For all the high - moralists 'Let BAe got to the wall' and 'the dispicable defence industry' types, answer this then.
Would you have us live in a country where we have no defence, no military? If so, then we're sitting ducks.
If you would still approve of us having a defence i.e. a military to defend us, would you;
A) like to see all British defence jobs go, on high moral grounds. We would then purchase all our military equipment from abroad (mainly US as would be the case) and then all we do is give even more of the UK money to foreign Companies and no British people see beniefit. These same foreign companies will sell to the very Countries you don't want British companies to sell to, therefore what has been acheived? Less jobs in Britiain, less money coming in from foreign sales, and more money leaving the country to fuel companies coffers abroad. OR
B) Accept that while there is any threat at all in the world, defence is a nesseccary requirement and that we should be proud to have the second largest defence Company in the world, which supplies jobs to many and actually makes money. They also prevent the Gov having to spend all their defence budget abroad which would see no British jobs/British workmen etc benefit. Not to mention the smaller compaines involved in supplies etc.
Those suggesting BAE should go to the wall for their part in the arms trade; should Rolls Roycw then be castigated and shut down? For they supply engines for military aircraft? This could go on and on.
In this world, the real world we need defence and BAE should be praised for securing these contracts and the jobs that went with them.
The gov should support a successful British based company and not penalise them for securing contracts which in turn secure jobs in THIS COUNTRY!
Complain about this comment
136. At 4:19pm on 01 Oct 2009, birt4president wrote:
I agree.
I seem to remember Jacob Zuma, the South African president, and his financial advisor being involved in a corruption scandal related to their dealing with Thint, a French arms dealer.
His finacnial advisor was even found guilty and spent a stretch in jail because of it.
Yet nothing was done to Thint...
Complain about this comment
Not that long ago BAe sought and got Govt approval for the idea of moving their HQ to the USA. The Govt basically said that provided it could still buy what it needed then it couldn't care less where BAe was headquartered.
Strikes me that such a move would suit the deindustrialisation strategy being followed by the Govt and the City and that this move by the SFO is aimed at helping move that along. For example - the Saudis implied once before that if they are dragged into this then there will be no more order coming BAe's way.....
Put bluntly - the SFO need to be told to pull their horns back in and go ask some serious questions about how the banks screwed our economy.
Complain about this comment
if the SFO are looking at BAE why not NR,RBS and BOS as there was something very wrong going on there on a far larger scale than BAE
Complain about this comment
Allmyfault:
Can anyone say whether BAe's armaments, land-rovers, software, jet-fighters, transport plans are all too crap to sell abroad without some greasing of the wheels.
Well BAE supplied some computer systems for the F-22 - an American plane which is (according to the USAF and Lokheed) the 'best fighter in the world' this is an aircraft with no British involvement (other than the Yanks purchasing off BAE). Of course they are biased, but this plane clearly is up their with the very best including (and bringing me nicely to my next example) the Typhoon which is an incredible aircraft (BAE being a major part of the development and production of it). They have also developed leading missiles etc.
BAE do make world leading products.
Complain about this comment
Japan is, now, one of the richest countries in the world. It has world beating manufacturing in all manner of fields and is one of the most technologically advanced countries. Its military is tiny in comparison to the potential ... the USA spends six times per capita what Japan spends. Japan also has the strictest rules in the developed world regarding the manufacture and sale, especially overseas, of equipment that might be used in military defense.
In the case of Japan, manufacturing prowess has come precisely because it does not have a defense industry to speak of. The idea that Britain needs BAe to preserve manufacturing jobs is, in the long run, a complete blind alley of an argument.
Complain about this comment
The news that the SFO are pursuing BAE regarding so called fraud and demanding up to £1billion in fines, makes interesting reading. Anyone who has dealt in large contracts with the Middle East, Africa, (I have no knowledge of Eastern Europe, but am sure the same mind set prevails), will know that fees, kickbacks, bribes, call them what you will, are part of a recognised pattern of doing business, and without them, your bid will not be considered. The fact that the US is also pressing, would indicate that they were outbid by BAE, and not for any other reason. Let me also say that French and German companies have also followed this practise. I am not surprised that BAE have refused to pay such a huge figure, it will be interesting to see what the SFO can produce in the courts, on their present record to date my money would be on BAE. The ultimate irony of course, is that it is now in the hands of the Attorney General, whether to prosecute!!!?.
Complain about this comment
Like PorterRockwell (#37) I'm utterly amazed at the almost unanimous defence of corruption and bribery that fills up this comments thread.
http://www.knowingandmaking.com/2009/10/worrying-bizarre-defences-of-corruption.html
Some of you should be ashamed of yourselves.
Complain about this comment
99 iwinter
"Yet more political correctness gone mad. The fact is, if BAE weren't doing this, other nations abroad would." writes 'iwinter'
What mind-boggling cliched rhetoric is THIS. Do you propose the redundant law of hopelessness and inevitability in any other areas, insisting that the problems are in the box marked 'Too Difficult To Solve'? Consistent intelligent effort leads to profound change, otherwise you would be applying the theory of 'if we don't someone else will' historically to slavery and a raft of other major concerns that have been dealt with successfully.
I am heartily sick of those who remain always defeated, display no confidence and accept the status quo. The fact is that we are exporting arms at an exponential rate. Innocents all over the globe are being atomised because of financial greed that WE are ignoring other than to justify the slaughter (facilitated through alleged corruption) through the possibility of job losses. It's lucky that we are not major drugs exporters like Afghanistan; imagine someone trying to stop it, against a backdrop of whining that jobs might have to go. BAE systems ought to be seriously curtailed in my view anyway, on humanitarian grounds never mind the corruption charges. If senior politicians are all forced to play the game demanded of them by other corrupt nations, do we really want them in charge of our country? What does exporting vast quantities of arms do for ending the war on terrorism? We have absolutely no control over them once they have reached their initial destination? Our illustrious leaders should be securing arms reductions on a grand scale as part of a far wider initiative to improve relationships in all other areas.
Our unelected, unremovable monarchy might also consider giving up the pantomime version of militarism as a way of changing popular perception for the better. What deals does the self-styled 'ambassador for trade' Andrew Windsor clinch? Do we know? Does it involve arms sales? Surely not.
Complain about this comment
inoncom:
Would you rather risk thousands of jobs for the sake of theoretical ethics than the companies rivals do not adhere to? Putting Britain, BAE and ultimately the jobs of thousands of workers (many skilled workers to boot) at risk?
Granted we would all like to live in a fair world were no backhanders and sweeteners took place, but that world does not exist so for BAE to compete they have to stand on the same level as their competitors - if that means back handers, then sobeit.
Let's face it, they gave a bung to a government, nobody was actually affected, nobody got hurt by the bung, they haven't evaded income tax etc etc is it really such a big deal? Many people like to have a pop at a suceesful British company.
Complain about this comment
There does seem to be some confusion amongst the commenters here. Perhaps I should point out that the SFO are charging BAe because they (allegedly) paid bribes, not because they are an arms manufacturer.
Their line of business (while not very edifying) is irrelevant to the story. The SFO could just as easily pick on anyone else giving bribes (eg the construction industry, as someone mentioned).
Or even, to pick a counter example, if the field operatives of a UK charity have to pay bribes to immigration officials in the country they work in - should that charity be prosecuted by the SFO?
Or perhaps it's seen as a case of scale - it's OK to pay a few 100 pounds, but not a few million? But is that then the thin end of the wedge - shouldn't laws be laws, regardless of scale?
Complain about this comment
I love this morally bankrupt country. Our greatest exports of the past decade are our corrupt arms industry and the corrupt banking system.
We used to be the power house of the world, now all we sell is enslaving debt, guns and bombs.
The words: made in Britain, sends a patriotic shiver up one's spine, then a feeling of utter black depression and loathing.
Who needs a soul as long as business is good.
Complain about this comment
I am amazed at the general tone of the comments. Clearly moral corruption is widespread n British society now.
Bae s world class - thus if country A buys from company Y because of a kickback then country B would have the arms advantage if it bought from the more moral world class Company X. Country A loses the arms race. Graft means nothing.
But the sewer always becons to salesmen.
1st rule. Provide good value at a good price
Last rule. Provide good value at a good price or walk away.
They got caught - prosecute.
Complain about this comment
I agree with all the comments attacking the decision to prosecute BAE.
It is insane to take action against one of Britain's biggest companies for doing what everyone else does in order to win contracts in their type of business. It is the way business is done and why should we take any action if the countries concerned where the alleged bribery/commission was paid, are not taking action?
I'm sure that all our competitors are laughing at our stupidity!
Complain about this comment
The arguments in favour of law breaking are so predictable, the same old excuses of protecting jobs, British self interest, if we don't do it etc.
Until laws are changed we all live by them they are not optional, ask Baroness Scotland, she now knows all to well that we are ALL liable should we transgress.
First, if the BAE products were world class it would be possible for them to sell on merit.
Secondly the amount of whining about poorly equiped British troops would have you believe there might be enough potential for BAE to actually equip our own forces properly thus protecting jobs, far better for our forces to use the best than have to face it because you have helped equip the enemy, we have been there and done that.
And thirdly whatever gives folk the idea that this damaging fiasco is not going to attract the attention of the EU commisioners at some future point and end up much as Microsoft has with more massive penaltys being levied is delusional.
As for BAE being one of the last bastions of British manufacturing industry, absolute rubbish, there are thousands of industrial estates across the country each with many SME's readily filling any order they can land, sure things are slack at the moment but they are still there if you care to actually look for them, difference is they can't compete with companies who are able to divert vast sums away from the gaze of the Inland Revenue into slush funds in order to win contracts, it could be asked which British jobs are being best looked after?
Complain about this comment
I am amazed at the defence of BAE on here, they broke UK law on allegedly providing bribes, last week a major civil engineering company reached agreement with the SFO on a same issue of getting road and bridge contracts illegally, so it is not just BAE who are in the frame, it is not about arms traders being targeted it is all about corruption.
Some of the same bloggers I see supporting BAE, were in recent months castigating politicians for their antics, bashing bankers for the same type of behaviour, pure hypocrisy.
Complain about this comment
Bribery is endemic and an expectation throughout the Middle East and Africa when conducting high value business with questionable governments and has been for at least the past 50 years.
Why the Serious Fraud Office / New Labour and the PC brigade are throwing their hands up in horror is laughable. How on earth do they think other multi nationals from say America, France, Italy, Spain, Brazil, China, India and Russia do business with these regimes? If there was not an expectation that various officials, members of royal families, sponsors and high level government ministers did not expect a thick wedge of wonga in a brown envelop or a deposit to a Swiss bank account, does anybody with even one brain cell really think BAE Systems or any other contractor would contemplate such an act?
It is not in the interest of any contractor because the bride value comes of their margins. If a brown envelop was indeed part of the deal, then if BAE Systems really wanted the business, they would have been told in no uncertain terms, that was the expectation. Let us not be totally naive and believe that American, French, Brazilian, Chinese et al defence and major project contractors have not been subject to and indulged in this expectation. Nobody wants to do it but when it is an expectation and jobs and revenues and taxes are at stake, nobody with even a modicum of business acumen takes the lofty moral high ground and turns down the contract.
If the Serious Fraud Squad/New Labour and the PC brigade want to go witch hunting, then their quarry should be those Middle Eastern and African countries which expect a bung. The same PC zealots bleat like hell when an English company loses large taxable revenue generating, job preserving deals.
If the Serious Fraud want something to do, then let them target the fraudulent acts of politicians and civil servants including the BBC senior management team. There is enough real evidence available via the Freedom of Information Act to assure convictions. Ah but that would be hunting their paymasters wouldn’t it. As we all know, Brown promised the culprits would be subject to the full force of the law but not one politician, civil servant or BBC senior manager has been cuffed!?
Of course the irony of BAE’s predicament is that they have been put in the hands of Baroness Scotland – hardly a paragon of high moral virtue. But there again, she is immune from any censure, criticism or sense of moral expectation because she is part of the New Labour/PC brigade machine.
No doubt BAE Systems will be found guilty and subjected to a crippling fine which will result in loss of market opportunity playing right into the hands of BAE’s foreign competitors, loss of revenue and reduction in operational budgets which will lead to downsizing the workforce, blighting communities, increasing unemployment, bringing people to the point of despair, burdening the taxpayer with even more social services support handouts but that does not matter to Baroness Scotland and New Labour. They will go on destroying England, their primary mission, before their inevitable demise at the 2010 general election.
Then, God willing and the creek don’t rise, David Cameron will have the
guts to dismantle this virulent socialist state, rid this country of the PC cancer which is destroying it and return England to freedom and prosperity.
Universal Vision
Complain about this comment
152 maroon3
What do you suggest we sell instead?
Historical Theme Park UK?
Complain about this comment
If you want to do business in certain parts of the world then 'dropsy' or sweetners are the only way to get a foot in the door. I find it extraordinary that in a country where a substantial nuimber of MPs are on the fiddle we don't just accept the way of the world
Complain about this comment
#1 got it right.
#146 Japan can afford to take the stance it does in the sure knowledge that the USA will save it from whatever whenever.
This is one decision GB will HAVE to make. A chance to out-do pragmatist Blair.
Cannot understand SFO. Hope BAE holds firm and makes SFO mount its case. The prospect of relevant evidence ever seeing the light of day is nil. Too many foreign interests are affected for the prosecution to get off the ground.
Stand fast BAE. Avoid the insidious plea bargain; the most dissolute form of legal process ever devised. But then it was devised by lawyers for lawyers
Complain about this comment
#154 busby2. So pleased to read that you do not believe in the rule of law. Presumably you will not object if I come round your house and rob it. I guess you be equally happy to be run over by a drunk uninsured driver.
Ah the pettiness of the law!! Bring on mob rule I say, lets see how you and your ilk make out then.
Complain about this comment
Bribery is endemic and an expectation throughout the Middle East and Africa when conducting high value business with questionable governments and has been for at least the past 50 years.
Why the Serious Fraud Office / New Labour and the PC brigade are throwing their hands up in horror is laughable. How on earth do they think other multi nationals from say America, France, Italy, Spain, Brazil, China, India and Russia do business with these regimes? If there was not an expectation that various officials, members of royal families, sponsors and high level government ministers did not expect a thick wedge of wonga in a brown envelop or a deposit to a Swiss bank account, does anybody with even one brain cell really think BAE Systems or any other contractor would contemplate such an act?
It is not in the interest of any contractor because the bride value comes of their margins. If a brown envelop was indeed part of the deal, then if BAE Systems really wanted the business, they would have been told in no uncertain terms, that was the expectation. Let us not be totally naive and believe that American, French, Brazilian, Chinese et al defence and major project contractors have not been subject to and indulged in this expectation. Nobody wants to do it but when it is an expectation and jobs and revenues and taxes are at stake, nobody with even a modicum of business acumen takes the lofty moral high ground and turns down the contract.
If the Serious Fraud Squad/New Labour and the PC brigade want to go witch hunting, then their quarry should be those Middle Eastern and African countries which expect a bung. The same PC zealots bleat like hell when an English company loses large taxable revenue generating, job preserving deals.
If the Serious Fraud want something to do, then let them target the fraudulent acts of politicians and civil servants including the BBC senior management team. There is enough real evidence available via the Freedom of Information Act to assure convictions. Ah but that would be hunting their paymasters wouldn’t it. As we all know, Brown promised the culprits would be subject to the full force of the law but not one politician, civil servant or BBC senior manager has been cuffed!?
Of course the irony of BAE’s predicament is that they have been put in the hands of Baroness Scotland – hardly a paragon of high moral virtue. But there again, she is immune from any censure, criticism or sense of moral expectation because she is part of the New Labour/PC brigade machine.
No doubt BAE Systems will be found guilty and subjected to a crippling fine which will result in loss of market opportunity playing right into the hands of BAE’s foreign competitors, loss of revenue and reduction in operational budgets which will lead to downsizing the workforce, blighting communities, increasing unemployment, bringing people to the point of despair, burdening the taxpayer with even more social services support handouts but that does not matter to Baroness Scotland and New Labour. They will go on destroying England, their primary mission, before their inevitable demise at the 2010 general election.
Then, God willing and the creek don’t rise, David Cameron will have the guts to dismantle this virulent socialist state, rid this country of the PC cancer which is destroying it and return England to freedom and prosperity.
Universal Vision
Complain about this comment
A couple of points to clear up here:
* BAES is only accused of bribery - contrary to the guilty-until-proven-innocent attitude NuLabour have being inculcating, these allegations have no substance until they are proven in a court of law (note: that doesn't include the Court of Public Opinion, Hattie)
* The law was only enacted in 2001 and has, to my limited understanding of law, some rather major jurisdictional issues: how does doing something, that's legal when/where you do it, become a crime when you get home? How does that work? Can 18-year-old US tourists have a beer in London and then get thrown in jail when they get home for underage drinking? If I smoke a joint and screw a prostitute in Amsterdam, then fly to Riyadh, do I get stoned (again!) for adultery?
* Although the law was only enacted 8 years ago, the previous SFO attempt to prosecute BAES was based on a deal (Al Yamamah) made 20 years ago. I don't think ex post facto criminalising historical events is a good precedent to set, since we can't change the past.
* "Bribery" is pretty much indistinguishable from "Introduction fees", "Commissions", "Offsetting", "Consultancy fees", and a wide variety of other constructs. Pretty much anyone who does any sort of business anywhere is doing it to be personally enriched - mostly that's just wages, and some profit share if you own the company, but it's still there.
* Pragmatically, settling (for a nominal price) is the best approach - this has affected the share price (down 5% before the US markets opened and crashed the FTSE), will linger and, frankly, will make the salesmen's jobs harder: just about every foreign customer will now be asking for a bung, as they've heard from the BBC that the company pays them!
Don't let your hatred of Big Business and/or the Arms Trade cloud your judgement here: this is not an open-and-shut case.
Complain about this comment
When I saw this blog, it reminded me much of a an episode from "Yes, Minister". You may have to read it more than once, but in the end, it certainly makes you look at this scandal in a different light. Have any of you seen the episode "The Whisky Priest"?
http://en.wikipedia.org/wiki/The_Whisky_Priest_(Yes_Minister)
Complain about this comment
Great news..fine them as much as possible it is about time big business was put in its place... but what happens to this money paid in fines?..can it be used as venture capital to help develop new industry in the uk that doesn't depend on wars.
Complain about this comment
Interesting story for you about BAe...... Back in the late seventies when the N Sea oil and gas business was taking off with a vengeance a small team of BAe engineers developed an all electric remotely operated vehicle (ROV) for offshore use. It was bought by a small company in Barrow in Furness who operated it primarily in the N Sea doing seabed surveys, inspections and assisting pipeline work. It did well but when this company and others tried to buy another one it was found that BAe had decided to shut down the programme because it wasn't defence related.
The sector then became rapidly dominated by a US company which as it happens was a major US Navy defence contractor called Amatek Straza.
BAe never re-entered this market and lost it's potential advantage very quickly. Even the Royal Navy's minehunting ROVs ended up being built by the French!
Strange bunch.. It's a company that has the skills and knowledge to do things such as develop renewable energy technology and a lot of other thing but wouldn't. Their management need slinging out and replaced with some people with vision.
Complain about this comment
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.
So where are those executives that were with the business in the period in question? Whilst the company may get away with a fine, those who made the decisions should certainly not get away at all.
Complain about this comment
It is a credit to this country that the SFO is seriously considering prosecuting the largest manufacturer for overseas corruption.
Far more serious and damaging are political corruptions. Possible bribery-in-kind "gift" of book deals, speaking tours, directorships, "opportunities" etc for serving or ex-politicians and their family members.
Complain about this comment
#162. EnglandMedway wrote:
"Why the Serious Fraud Office / New Labour and the PC brigade are throwing their hands up in horror is laughable."
Why? Because what BAe did is illegal. And it matters not a jot that others do it; we should aspire to be better than that. I'd rather live in a morally sound society than a rich, corrupt one.
"Then, God willing and the creek don’t rise, David Cameron will have the guts to dismantle this virulent socialist state, rid this country of the PC cancer which is destroying it and return England to freedom and prosperity."
If you really think this is a socialist state then I suggest that you're going to be sorely disappointed in David Cameron's Conservative government.
Complain about this comment
Frankly like the tobacco industry the armaments industry and big airlines are not savoury organisations - and people who work for them are rather silly if they knowingly work for them and yet hold ethical or moral values not consistent with working for them.
Armaments kill people (as does tobacco!) Much, if not most of the buying and selling in the industry is corrupt, by legal standards. It is all rather precious to take BAE to task over this particularly when Tony Blair and Margaret Thatcher both signed off these and other, deals, presumably knowing, or they ought to have known that they were obtained by corrupt means.
I would prefer to see the directors responsible in prison for quite a time and no fine for the company as a just remedy as hurting the company lets those who actually perpetrated these corrupt dealings off of the hook.
Complain about this comment
At 7:41pm on 01 Oct 2009, Tantivvy wrote:
#146 Japan can afford to take the stance it does in the sure knowledge that the USA will save it from whatever whenever.
You mean that the USA defends Japan ahead of the UK, and that we need BAe for that reason? Whatever happened to the special relationship?
Fact is, Britain claims the Special relationship with the USA. Then all we need do is, like Japan, dismantle the large proportion of our defense related industries, get out of the sick and ugly business they are in, and turn the manufacturing talent that is undoubtedly within those companies to making decent products that ordinary people want to buy.
Complain about this comment
When BAE Systems relocates to the States taking the jobs and tax revenues with it, perhaps the Government will wake up and smell the coffee.
When will people realise that it is in the Strategic Interest to retain an arms industry. For Christ sakes, we've lost steel making capacity to the Italians, and ships are now built in Korean shipyards. Our food is grown overseas and people want to give up our arms production capability because of some perceived moral duty? How about the duty to provide a secure and productive future for our descendents?
Frankly, Britain could be starved into submission inside 2 weeks if the trend continues. The trade defecit will be astronomical.
A nation of call centre workers and 'service' industry automatons. Chaff in the wind waiting for the next financial crisis. But at least we were sat on the moral high ground when the Tsunami hit...
Complain about this comment
LandyStang wrote:
A nation of call centre workers and 'service' industry automatons. Chaff in the wind waiting for the next financial crisis. But at least we were sat on the moral high ground when the Tsunami hit...
And where were you when the industries we were so good at were being steadily dismantled in favour of financial services? Cheering them on, I bet. Now all you have to defend is a bunch of corrupt, venal, and sick sociopaths who are quite happy to send thousands to their deaths in other parts of the world simply to protect their pensions.
Let BAe go to the wall. Those with talent will find other work soon enough and many would be glad to be out of the sad mess of a company that is BAe today. Prosecute to the full extent of the law and send a signal to anyone that wants to play in that cesspool of a business, that Britain can do things better.
Complain about this comment
I could not agree more with Toldyouitwould. Sadly, whether we like it or not, in some parts of the world this is the way business is done. We do not live in an ideal, fluffy world. There is no level playing field and no fairness. That's just the way it is.
Backhanders and corruption in general come as part of the culture in some regions and if our companies don't join in businesses elsewhere will and the UK will miss out on big contracts. We have precious little in the way of large British-owned (well majority British-owned) manufacturers left. I can see that BAE Systems may just up sticks and relocate elsewhere, possibly to the US where much of their business is now based! Do we want that to happen?
Complain about this comment
I can't help but wonder whether charities should also be facing SFO investigation, fines and banishment from the UK.
After all, the common practice of bribes for movement of food and medical supplies has been going on for decades.
Bribes extend to many, many countries - Russia, China, the Middle East and Africa.
These BAE bribes/back handers may well be legal and as stated NORMAL in those countries. If the contracts were signed there quite frankly I doubt there is a case to answer.
When you move to a foriegn country you cannot live as an Englishman you live by the local culture - if you don't you are disrespecting their way of life. Remember the teacher who name a teddy bear "Muhammed" ?
#169 rbs_temp
"I'd rather live in a morally sound society than a rich, corrupt one."
Well, it may surprise you but a lot of countries find the UK's ways just as displeasing and would say the UK has it's morals back to front.
As regards corruption I doubt there is any level of the UK society that doesn't have it's measure of corruption, that's the nature of the beast.
Complain about this comment
The UK is in BIG trouble. Even call centres are moving out! Just how can the UK make its way in the world? Yes, it is morally reprehensible to make products that kill but our Governments over 40 years have allowed our country to put all its eggs in three baskets namely banking, defence industries and supermarket chains, with the latter mainly retailing imported goods. We hardly have a broad based economy. Virtually all our skills base has disappeared and most other areas of manufacturing are now under foreign control or have declined to become 'cottage industries.'
OK, we have service industries but so does everyone else!
I think we have to get used to the idea of having massive balance of payment deficits not for years to come but for ever, unless, of course, it gets to the point where most of the population can no longer afford to buy the products produced oversees, which I believe is very possible!
Complain about this comment
Excellent blog Robert, light the blue touchpaper and stand well back
Complain about this comment
I am pleased that the debate is more balanced now, at my second visit, than at my first. I am no less appalled at the views expressed that suggest that "political" corruption is worse than "business" corruption (#168 - do you get the irony of what you are arguing? see #87 on the award of export licenses and #108 on effective subsidy for arms supplies to the British military, not to mention #147 on the corruption of the governments that BAe supplies, a "rule of the game" not to be challenged, apparently).
The analogy in #86 is melodramatic but apt. If standards of human conduct such as women's rights, democratic governance, progress and the rule of law are to be extolled as "civilised" yet the opposite effectively perpetuated by supplying the means of force projection necessary to suppress those standards, we are indeed aiding and abetting the international equivalent of a wife-beating child-abusing tyrant. Lest we forget, the customers of our arms companies make decisions on purchases by virtue of their position as officials of the apparatus of state, in many cases illegitimately held and despotically wielded. To personally aggrandise a Defense Minister in return for state concessions not only enables them to maintain their position of power and allocate resources at the expense of the ordinary people of the country, but shows classic core-periphery short-sighted thinking and stores up a national security nightmare for the future. To continue the analogy, the domestic violence offender subsequently beats his wife and children into submission, but unsatisfied, decides to lace into your kid when he or she is walking home from school past his house. With the chain that we sold him.
Please do not assume that in the assertion of an ethical aspect to international trade I am a woolly-minded bleeding heart tree-hugging hippy liberal (#4, #92). Even if I were, that's pretty much irrelevant to the argument I am advancing here. Every jet BAe sells to the Saudi's is a supersonic flying billboard recruiting for Al Qaeda or subsidiaries, and when the House of Saud falls, or is so pushed it has to commit a massacre to maintain authority, we will be at best, tarred with their brush or at worst, compelled to intervene and our own troops killed with the weapons we sold. How many Apaches have been taken down with Stinger missiles supplied to the Taliban during the Cold War? How many British servicemen have been maimed by landmines bought from the UK by Saddam Hussein? It is absolutely counter to our own national security (realpolitik) interest to supply sophisticated force delivery platforms to regimes that use them for the suppression of their own population and the intimidation of others. Further, it is destabilising to geostrategically significant regions to foster arms escalations and distorting of the balance of power to tie arms deals to negotiations on, for example, deals on oil or foreign troop base location.
As for the impact on the UK of the declining manufacturing industry (#21 #46, #81, #84 and on and on and on), an equally short-term view pervades the arguments I am reading. Britain is unable to compete with the low costs of manufacturing in other countries because an under-educated, subservient and un-unionised workforce cannot demand or command premium wages. Our workers can, and do, to the point that the lowest paid jobs are refused by a significant number of indigenous (born here) British people and carried out by first generation immigrants. By providing undemocratic governments with the means to maintain political power without the appeal to consent, we ensure our national competitors in the global manufacturing industry keep a ready supply of powerless, exploitable and consequently very cheap labour to work in their factories, production lines and warehouses. Once again, it is counter to Britain's economic interest to permit arms trading with undemocratic regimes.
Although disregarded by classical realists, it is an important truth of our independent world that leadership legitimacy is eroded by hypocrisy, and corruption demonstrated by our flagship businesses legitimates the same in others. This may seem a minor point compared to the two big ones above, but there is a fundamental decision to be made, as to whether markets need morals - as Peston, and more recently Brown has suggested. My own view is that what markets need, more than anything else, is fairness, transparency and single standards for everyone. When business has opaque and privileged access to government monopoly and influence on decision-making capacity, the efficiency and energy of the market and the sovereignty and equity of government respectively is compromised. Politics and business both hate uncertainty, particularly public uncertainty, and BAe and Labour will both feel the sting of this court case.
All the above points do not need ethical sanctimony to be recognisably valid. A wider and longer-term conception of what constitutes national interest is all that is required.
Complain about this comment
Putting morals aside, the most important thing is the money.
Those alleged bribes were stolen from the UK taxpayer in the form of skimming off R&D grants, Tax concessions and generous procurement deals with the MOD, it did not come off the margins as BAe have been making healthy profits and paying dividends to the owners (shareholders).
That stolen money should be returned to the taxpayer.
If the owners (shareholders) of BAe feel agrieved then they should pursue the employees (both ex and current) responsible who were acting in the owners (shareholders) name.
As to the moral issue :-
all those that condone bribery and corruption will find themselves victim of blackmail by those selfsame bribers and corruptors (for that is how they work)
Complain about this comment
Just a quick comment to anyone referring to BAe - British Aerospace (BAe) ceased to exist back in 1999 when they merged with Marconi Electronic Systems to form BAE Systems. Gordon Brown demonstrated a similar level of ignorance the other week following the announcement of job cuts saying it was 'a bad day for BAe' on local news in the North West.
Finger on the pulse as ever eh Gordo!
As for all the Peaceniks on here - Would you have also stopped my Great Grandfather building Spitfires in 1940? Didn't think so!
Complain about this comment
DrDelbert:
What a ridiculous post.
So if BAE went to the wall, which is fairly unlikely and I certainly hope does not happen, then I ask you this:
Where would YOU like Britian to spend it arms budget? Would you like the money to all be pumped steadily out of the country into foreign arm companies? While they laugh at us for 'morally' destroying our own industry?
Surely, regardless of your take on the arms trade you would rather that at least some of the money remained in Britain supporting jobs here?
Don't give me some fanciful tosh about not having a defence force of our own because only in a fairy tale land of PC Perfection could we ever dream of a world with no weaponry to defend oursleves.
The answer surely for any sensible realist is we would rather see the 30 odd thousand jobs remain here under BAE than the money lining Lockeed Martin, Boing etc Executives pockets. They are likely no more 'moral' or ethical in their winning of contracts in any case which blows the moral argument out anyway.
Would you rather Chuck from Chicago has a job building equally destructive warplanes rather than Derek from Lancashire? Simply so that Britain, an even poorer and smaller economied Britain falling further behind can stand there and say 'well Derek, at least we are morally sound, we showed that BAE systems how to rid the world of corruption' Just as the Yanks sign a multi billion dollar deal and Derek collects his dole cheque?
Is that a scenario you would welcome?
Perhaps you could with you moral code, could go and tell the workers of BAE if and when it went to the wall as you so wished, that this was for the best interets of ethics and morality. I'm sure they would appreciate your bitter, 'well placed' words. Equally I'm sure you would have saved many lives in war torn countries by sending the custom elsewhere.
Get in the real world.
Complain about this comment
dear mods,
Please could you amend in post 178 paragraph 5 "independent" to "interdependent", then delete this post.. Doesn't make any sense the way I've left it.
Many thanks
Complain about this comment
Our arms industry should be arming our troops, not third world countries. One company can use the in-house skills and knowledge to diversify. There is no need for any BAE Systems to ever involve themselves supplying kit such a poor country.
We should be ashamed of the company. Just where are the executives and will they be charged?
Complain about this comment
#178
"Britain is unable to compete with the low costs of manufacturing in other countries because an under-educated, subservient and un-unionised workforce cannot demand or command premium wages."
Oh right, so Germany must have "under-educated, subservient and un-unionised workforce cannot demand or command premium wages".
No the reason the UK has lost it's manufacturing is because we have never valued our manufacturing industry and have never supported it - while others have nurtured theirs. It's just been sold off and destroyed because of idiology, much as you are espousing - which has been proven wrong, not only that but economically dangerous and destabalising by hoisting our demand for material needs in the hands of those with lessor morals. ie China exploiting Africa.
Perhaps you would prefer BaE to move to China to and have their actions authorised by a country with a very poor human rights record. Or better still have BaE disappear and some Chinese manufacturer sell weapons indiscrimanatly.
"Every jet BAe sells to the Saudi's is a supersonic flying billboard recruiting for Al Qaeda or subsidiaries, and when the House of Saud falls, or is so pushed it has to commit a massacre to maintain authority, we will be at best, tarred with their brush or at worst, compelled to intervene and our own troops killed with the weapons we sold."
Regardless of where the Jets were manufactured Al Qaeda would still do what Al Qaeda does. The problem is not a jet, it is Al Qaeda. Even if we hadn't sold anything to the Saudi's the premise that we could afford Al Qaeda the control of an oil rich state like Saudia Arabia is quite frankly hilariously deluded. Even if the Saudi's made their own weapons or better still bought them off of Al Qaeda it wouldn't make a jot of difference the West would be force to intervene,,, to argue otherwise is just totally idiotic.
"To continue the analogy, the domestic violence offender subsequently beats his wife and children into submission, but unsatisfied, decides to lace into your kid when he or she is walking home from school past his house. With the chain that we sold him."
Okay,, get rid of the chain. They use their foot instead or their fist or a brick or a branch. Removing the chain does not solve the problem, changing the wife beater into a better human being does. The chain hasn't done the damage the human being at the end of it has.
For me fining this company won't change the past, if it's such a big issue then the government should make sure it doesn't happen again - let the jobs be saved.
The need for a fine is purely based on revenge.
Complain about this comment
#175. JackMaxDaniels wrote:
"#169 rbs_temp
"I'd rather live in a morally sound society than a rich, corrupt one."
Well, it may surprise you but a lot of countries find the UK's ways just as displeasing and would say the UK has it's morals back to front."
I did not claim that the UK was an example of a morally sound country: merely that I would prefer to live in one than in a rich, corrupt one.
Complain about this comment
#180. TarnishBoffin wrote:
"Gordon Brown demonstrated a similar level of ignorance the other week following the announcement of job cuts saying it was 'a bad day for BAe' on local news in the North West.
Finger on the pulse as ever eh Gordo!"
How can you tell that Gordon was saying "BAe" and not "BAE"?
Complain about this comment
#184. JackMaxDaniels wrote:
"For me fining this company won't change the past, if it's such a big issue then the government should make sure it doesn't happen again - let the jobs be saved.
The need for a fine is purely based on revenge."
Presumably, then, you also believe that punishing the three people currently in court on charges of sexually assaulting young children is driven purely by the desire for revenge. It won't change the past, so if it's such a big issue why not just make sure it doesn't happen again and move on?
Complain about this comment
Most of you talk about moral corruption and monies stolen from the tax payers. On a financial level there is a greater moral corruption and stealing of tax payers monies that has happened right here in our own country and our own courts those of the Family courts were £2billion plus each year has been divered from tapayers into the hand of social workers and lawyers and Judges etc, for the last 12 years. Maybe the SFO should look into that if so many of you are worried about monies side of things as BAe is chicken feed comapred to the family courts issues ?
Complain about this comment
Japan is, now, one of the richest countries in the world. It has world beating manufacturing in all manner of fields and is one of the most technologically advanced countries. Its military is tiny in comparison to the potential ... the USA spends six times per capita what Japan spends. Japan also has the strictest rules in the developed world regarding the manufacture and sale, especially overseas, of equipment that might be used in military defense.
..yet those very rules didn't stop Toshiba from exporting sophisticated milling technology to the Soviets in the early 80s, allowing them to develop a whole new breed of quieter diesel submarines...
Complain about this comment
#186. rbs_temp wrote:
"How can you tell that Gordon was saying "BAe" and not "BAE"?"
BAe and BAE are the same company there is no difference. BAe (british aerospace) was a UK aircraft, munitions and defence-systems manufacturer. In 1999 it purchased Marconi Electronic Systems, the defence electronics and naval shipbuilding subsidiary of the General Electric Company plc, to form BAE Systems
So as you can see BAe no longer axists. So i guess you trying to be clever backfired. and don't tell me i'm wrong cos i work at BAE systems in brough!
Complain about this comment
DrDelbert wrote "Whatever happened to the special relationship?"
The special relationship with the US is 'what can the US get away with while seeing how high the UK will jump'. If we don't prosecute BAE for its crimes the US will - its already investigating! We don't have the leverage to get them to drop the case as we did with BA in the Laker farce.
BAE will be effectively destroyed as an international business. The US will pick up any work bribing and corrupting small nations for what money they have - and they will do it with relish while laughing (probably directly in our face by then) about how important the special relationship is.
Its not a question of whether BAE should be punished but how and by whom.
Complain about this comment
If we are going to be 'moral' about trade outside of the UK, then the SFO had better start investigating every large company that has ever done significant business in the middle east and Africa.
When they have finished with those, they can work through the ones that have traded in eastern and southern Europe.
If any companies come up clean, they either have a unique product or, much more likely, a local partner who takes care of the dirty work.
I'm very sorry, but that is how it is.
As I said in my previous post, the SFO should concentrate on what goes on in the UK. Isn't falsification of expenses fraud? Doesn't the law apply to MPs? Don't there expenses come out of the taxpayers' pockets?
Complain about this comment
I would have sympathy for BAE however it is hardly the most pro British of companies now is it ? It operates here out of convenience and looking at its expansion in the US it is fair to say it will move there completely in the future.
Evidence of this is the expansion of their armoured vehicle manufacturing in the US while scaling it back in the UK. In addition to this BAE has shown no loyalty to the UK or its heritage when it closed Hiatts the 300 year old handcuff company in Birmingham to move production to the US of A.
Perhaps when BAE starts behaving more like the British company it is supposed to be will people have some pride and dare I say loyalty towards it.
Complain about this comment
Besides as we sell everything off anyway (Cadbury being the next victim) how long will it be before BAE is sold off to a foreign company anyway.
I firmly believe BAE has been allowed to expand in the US by buying up smaller companies so that when the time comes, BAE will make a nice purchase for some US company. When that happens there will be mass closures of factories in the UK and huge job losses.
Not that ny of our witless politicians will care mind you.
Complain about this comment
Isn't there a man who is mooted to be the first ever EU President that might just have a little to say to a few people about this small matter ?
Complain about this comment
From the Today report ("BAE: The Tanzanian connection"):
"The Serious Fraud Office (SFO) [...] is asking the Attorney General [...] to prosecute BAE [...] under the 2001 Prevention of Corruption (Amendment) Act. [...] In 2001, Tanzania [...] decided to purchase a military air traffic control system from BAE. Clare Short [...] was convinced it was a corrupt deal."
Aside from the fact that that appears to be an Irish law, and the relevant one is probably Part 12 of the Anti-terrorism, Crime and Security Act (2001), one has to wonder about the dates involved. Is the SFO once again trying to prosecute for something which may have been legal at the time?
Given that the Act received royal assent and came into force on 14 December 2001, that's a fairly small window...
Complain about this comment
By reading many of the above posts you could be forgiven believing BAE IS the British Defense Industry, it is a global company employing over 100,000 worldwide and around 30,000 in the UK.
The UK defense industry employs nearer 310,000 people, were BAE to not survive here there are many other companies who could quickly take up any slack in the headlong charge to supply all with anything destructive they wish to buy.
BAE is the 5th largest defense supplier to the US, I cant imagine how if were backhanders paid there they are not going to figure in the future either, course if they were able to do business in the US without having to pay backhanders then why mess about in Africa or elsewhere, greed?
If we all join in the "do what you like" business it sure will save me a load of money, be good enough to let us all know when it becomes official.
Complain about this comment
To MartiniHenry
In 194, you have answered your point in 193. Cadbury are now reaping the benefits of loyalty.
The history of proud and loyal companies (Rolls-Royce, Jaguar and many others) show that loyalty to the UK has no value with the British Government when you need a little short term financial credit.
The government makes incompetent bankers look quite decent.
Complain about this comment
Rather than potentially crippling one of our few world class companies, why doesn't the SFO find itself some work investigating the much less productive but every bit as dodgy expenses scandal involving you know who.
Complain about this comment
Why do I have the feeling that there are forces in this country which continually appear to be working against the good of the nation?
Does anyone else have the same misgivings. Can we continue to trust a Left Wing government? Should we have a Department to Investigate Hidden Agendas?
Complain about this comment
#184
you wrote
"the reason the UK has lost it's manufacturing is because we have never valued our manufacturing industry and have never supported it - while others have nurtured theirs."
Fair point about Germany, and similar developed countries' manufacturing industry/labour workforce. I was clearly thinking of China & East Asia/India and South Asia/Brazil and South America. It is also true that Britain's manufacturing diversity has been neglected in favour of service sector and finance development, to today's current ill-effects (#81 and others, with less vitriol). However, to suggest that manufacturing in Germany, particularly defense manufacturing, is unequivocally buoyant is fallacious - most EU based arms manufacturers have had to cartellise into increasing massive conglomerates to ensure competitiveness and lobby government influence. Further, defense manufacturing, because the technology is to an extent controlled by national governments, unlike general consumer manufacturing, represents a semi-protected industry. This cannot and will not last forever, especially given the declining relevance of platforms such as JERNAS to low-tech counter-insurgency warfare. For my part, there is no ideological content to my argument, simply an assessment of the competitive advantage and security/economic/political implications of the UK arms supply business.
you say that it is
"economically dangerous and destabalising by hoisting our demand for material needs in the hands of those with lessor morals. ie China exploiting Africa."
I'm not sure what that part of the paragraph is trying to argue but I'll infer from the next you allege China is exploiting a market we should be exploiting first, because of our intrinsically "greater morals". A bizarre claim, to say the least. Perhaps it's best left at that.
you wrote
"Perhaps you would prefer BaE to move to China to and have their actions authorised by a country with a very poor human rights record. Or better still have BaE disappear and some Chinese manufacturer sell weapons indiscrimanatly."
I would prefer all companies, especially arms manufacturers, to operate with an understanding of the longer-term trajectory of complex political dynamics. China's domestic repression may be abhorrent but its foreign policy is no more morally reprehensible than our own - see concurrent blind eyes to Sudan/Chechnya/Ingushetia, expansionist in Tibet/Iraq and self-serving in intergovernmental debate. If BAE Systems relocated to China, the major change in the way they do business would be that they would be absolutely at the disposal of the Behjing government - who would not need to award export licenses in exchange for discounted products for the domestic military - in a command and control economy they could effective order at cost, if they so chose. And should BAE Systems disappear, how would that change the game? It is not as if weapons are sold "discriminately" at the moment, is it? What makes you think Chinese competitors are going to be innately more predisposed to thoughtless weapons disemination?
you wrote
"Even if we hadn't sold anything to the Saudi's the premise that we could afford Al Qaeda the control of an oil rich state like Saudia Arabia is quite frankly hilariously deluded."
I sort of agree, sort of - should Al Qaeda achieve state power in Saudi Arabia I don't think the world could justifiably stand by. It would be hugely galling to see British service personnel killed and injured by British-manufactured arms, though, wouldn't it. But I didn't say Al Qaeda would take over Saudi Arabia - I said that the House of Saud could fall (I was thinking of something like the 1979 Iranian revolution), or commit atrocities to hang on to power (like Hussein's gassing of the Kurds in the 90's) and we could be tarred with their brush or killed by our own weapons on intervention.
you wrote
"Regardless of where the Jets were manufactured Al Qaeda would still do what Al Qaeda does. The problem is not a jet, it is Al Qaeda."
Al Qaeda leadership exists, now, and is to a certain degree implacable. But their decisions are altered by our actions; remember the "Spain is forgiven" declaration following that country's decision to remove combat troops from Iraq? And the fighting is not actually carried out by the leadership - it is the foot soldiers recruited on the basis of their hatred of our actions, militarily and commercially, that will carry out destructive actions on behalf of the leadership. Al Qaeda is not a static standing army, it is a brand that grows in appeal inversely proportional to the hatred of competing brands. If we allow or promote unpopular actions throughout the world, Al Qaeda will grow in popularity.
you wrote
"The chain hasn't done the damage the human being at the end of it has."
An unarmed person would take longer to do the same amount of damage as an armed one. If you provided the weapons responsible for a member of your family's even slight injury (clearly I fervently wish this is never the case) I hope you would be distraught. It takes a lot less time to kill 10,000 people with a 2,000lb fuel air explosive than a machete, and their is much greater impunity permissible from 10,000 feet than face-to-face. In the same way as the narcotics importer bears responsibility for each overdose, or crime of addiction further down the chain, each arms manufacturer and legitimising government bears responsibility for deaths and injury that result from the use of their commodities.
you wrote
"the need for a fine is purely based on revenge"
The need for a fine is based on basic justice principles - retribution, yes, but also deterrence to others and BAE Systems from trying it again, restoration (to the British taxpayer if #179 is correct) and rehabilitation to encourage the executives at BAE Systems to consider other ways of doing business.
Complain about this comment
188
Not to mention the moral corruption and monies stolen from the tax payers to finance the murderous invasions of Afghanistan and Iraq and to bail the thieving bankers.
Complain about this comment
Reading the comments, I begin to feel that BAe are to be punished for allegedly paying a bribe because:
1. They are in the defence industry.
2. They have activities outside the UK, particularly in the US.
3. If they did it, they did a very bad job of keeping what is commonly done out of their books. That is, it's OK to do it so long as no one sees.
You may say the last reason is just, even though the act took place outside the UK. However, it didn't apply for Pinochet.
We live on a small island that, compared with the most of the rest of the world, remains a paradise of good behaviour. Look even at some of our good partners in Europe. Pick a leading politician and you'll find his wife and children are all MPs or in some other political appointment. When you go on holiday, read carefully the notices over local public works - does it need an engineer, an architect and a team of legal consultants to lay some grass? It's horrendous bribery and corruption to us, but to locals it's as normal as giving an elderly person a lift to the hospital!
We cannot impose our ways by gunboat or other diplomacy; only the US has that power. We have to accept foreign ways as they are and, if we want to have a manufacturing industry and export, we have to pay the baksheesh. Or do we want to rely on a banking industry that looks after (launders?) the cash of foreign organisations (that may be involved in worse activities).
Complain about this comment
I would not really support even quite low level wrong doing regarding getting contracts but we must be "real" about this, other cultures and customs demand "gifts" as a mark of respect.
Im more concerned about the timing and focus of this. If B.A.E. Are made to look like "sleaze bags" then of course the passage of destructive and politically motivated defence cuts will be eased, also the departing ideology will have one last crack at a hate object.
Neither of the above reasons are good enough to justify destoying our only remaining technologicaly advanced "heavy industry". If you want to ask questions then ask about value for money in G.B. Defence procurement projects not take part in any politically motivated witch hunt.
Complain about this comment
One other point: terorists don't use fighter planes or nuclear submarines.
Sadly, they can do their work very well with civil equipment: airliners, cars. If we want to save lives by comtrolling arms sales,look more to small arms and rifles and anti-personnel explosives....
Complain about this comment
As my previous blog #90 has obviously caused some concern to the moderators, I will highlight the main point (without the caustic).
President Eisenhower in his parting speech to the nation indicated his concern that there was developing a very strong link between the military arm in America and the arms manufacturers. To such an extent that he believed much military policy was starting to be driven by the needs of those making the equipment, in that it was easier to sell a weapon once it had been demonstrated in combat. The Vietnam war was the culminastion of this process with esculation of technological warfare proving the technologies to be sold to despots around the world, but in truth ineffective against a determined peoples' army fighting a non-technological war. The same could be said for the Gulf Wars 1 and 2, where the destructive technology was demonstrated, in many cases not living up to its press on accuracy and ability to differentiate between friend and foe.
An additional point would be on reflection that if other countries were busily making the weaponry they would be leaving open opportunities in the market place for the manufacture of other items. The link seems to be between the military demand for better means of destroying others at the least expense to their own personnel. Wars increasingly kill more civilians than fighters, since the mass destructions of the Second World War the military mind sees civilian casualties as an irrelevance with kill ratios in Iraq astronomically disproportionate in hundreds of thousands of civilians dead against maybe ten thousand military operatives. This attitude creates the very terrorism that we now invade countries to defeat, we are in a trench warfare mentality where the slaughter is not military but civilian.
So to say it is common practice to pay sweetners for selling military equipment to those who usually turn it on their own populations appears to ignore the chicken and egg conundrum that is beyond most generals' ability to fathom.
Complain about this comment
Although in a perfect world, the Serious Fraud Office would be correct in attacking BAE, but unfortunately it isn't. We are at a critical stage in a war and need BAE to be at its most powerful. It is our largest manufacturer and by weakening it, through ridiculously high fines, who will suffer? Obviously the workforce initially, also our life line, the armed forces, who are now inadequately supplied with essential equipment, and ultimately all of us. Our economy is already in a weakened state, and if BAE is damaged, it could be disastrous for this country and also the western world. Who would benefit, proably only the legal profession, many of whom are only parasites in any case. What BAE is accused of is in any case trivial. Most countries would do the same to promote their industries. Dirty competition, perhaps, but we live in a competitive world. A bit like cheating at sport, certainly, but no more serious. If by paying a few bribes, BAE can be strong enough to compete and also build up our security and help our economy, good luck to them.
Complain about this comment
Some years ago I was involved in contract negotiations and was asked that legitimate commission payments be made into a Swiss bank account. I worked for a large multinational and explained to them that this was strictly forbidden under our corporate conduct policy and that I couldn't do it. I was asked what the policy was for and I explained that as a multinational we had to respect the laws and finance regulations in other countries around the world and support their governments in adhering to the law. This was met with much laughter and it was explained that the Swiss bank account was used to channel money to government ministers and officials in order to get government contracts!!
The country? Well let's just say it was one of the founding members of the European Community!
Bribery is wrong but it is the way of doing business in many parts of the world. These contracts have provided employment for hundreds of families, taxes for the UK government and union fees and subscriptions for the Labour Party. The self righteous Lord Goldsmith should remember that - perhaps he and Gordon Brown would like to return those taxes and subscriptions. No? - I thought not!
Incidentally I did not contravene our rules and would have nothing to do with the Swiss bank account proposal - but my ethics probably explain why I am no longer part of corporate life!
Complain about this comment
#203 WolfiePeters:
"When you go on holiday, read carefully the notices over local public works - does it need an engineer, an architect and a team of legal consultants to lay some grass? "
+++++++++++++++++++
Are you alluding to holidays abroad or in, say, Torquay?
I am sure such notices would be here too -with the additional Risk Assessment and HSE parties added to it.
Toldyouitwould
Complain about this comment
This is getting to be fun. What I'm mostly getting here is if a company does it anywhere in the world we'd be stupid not to allow our companies to do the same.
OK anyone fancy a small mafia style protection racket? Need the wife bumping off?
Need to buy a bit more leverage in government?
Complain about this comment
Again we wash our dirty linen in a very public manner. I guess it is symptomatic of having a government and senior officials who have never actually worked in the world we live in, never mind the markets we have to deal with. There are many comments outlining the reality of doing business in these countries, it is easy to question their morals. However our MP's are not in a position to take a stance like this. BAe, for all it's faults in some eyes, is a major world player, generating high GDP and employing many.
For heavens sake, get real and stop putting Great Britain at risk and at a disadvantage. Our European partners will be rubbing their hands as we once again make life easier for them along with the American, Chinese, Russians etc that have no hesitation in paying Management Fees.
Complain about this comment
Yes the timing is awful. But as others have skirted round, if we turn a blind eye to one group being corrupt other groups will simply judge (rightly or wrongly) that people aren't really bothered about corruption and so will try and take advantage as well! But what if one group is an arms manufacturer and the other, for example, a group of M.P's perhaps thinking excessive expense claims would never be made public?
The likelihood of coming Tory or Labour election success, to my mind implies the majority are happy to turn a blind eye to the expenses scandals, which we were all so vocal about? In theory neither party should stand a chance.
But what about when you personally find yourself on the wrong end of corruption? Bet you're vocal then!?
Complain about this comment
#203 WolfiePeters:
" - does it need an engineer, an architect and a team of legal consultants to lay some grass? "
++++++++++++++++
I would think a team of legal consultants would be essential. Someone would have to decide if not putting up a "Wet grass is slippery" sign would be negligent or not.
The difficulty will be finding such legal people available now the SFO is ploughing every resource it can into investigating BAE Systems ( thatname correct?) for doing what is custom and practice where they do it.
Toldyouitwould.
Complain about this comment
# 210MadTom1999 :
".......Need to buy a bit more leverage in government?"
++++++++++++++++++++++++
You make a donation to a party, perhaps. Wait, that is not corrupt is it?
Toldyouitwould
Complain about this comment
Some commentators here seem to live in a world that is either black or white. Fortunately there are others who live in the grey area between the "head in the sand ignorance" and "the world can't be changed."
I am inclined to believe the poster that the SFO is only prosecuting because their hands are tied. If they don't, the USA will.
Corruption has always existed. If it has to slowly die out, there has to be political will and the will of each and every citizen to make it happen. It doesn't happen from "moral outrage" alone.
I turned down 9 jobs of working in the black economy (outside UK). When I no longer had money to buy food or put a roof over my head, I took the 10th black job. Am I a moral hypocrite? Like stalinic, when I had a moral option (being legal) I took it.
And when I taught overseas, was it all so upfront? I indeed paid my taxes. But the school's lawyers have to get the visas. And how do they do it? So am I really doing something moral - teaching; or something immoral - knowing that somebody's pocket is a little fatter?
I believe there is more hypocrisy than ever in UK at every level (and probably world-wide). Socialism is not about voting for a political party and being a pacifist, letting someone else do the dirty work and reaping the benefits; but about doing something positive for those who never get any moral choices.
Complain about this comment
@MadTom1999, 210:
Straw man. It's been illegal to bribe in this country for over a century (e.g. Prevention of Corruption Act (1906)), and it quite probably pre-dates statutes, but nobody is accusing BAES of that.
What they're accused of is making payments which, if not strictly legal, are certainly accepted behaviour in the countries in which they were made.
If you can't see a difference, you might want to stop wringing your hands and consider why you're advocating Cultural Imperialism.
Complain about this comment
Perhaps we could take a proper look at BAE's claims to be a major part of the British economy. 70% of their employees are overseas. Even their own PR hacks claim that only 50% of their revenue is UK-based, about USD9bn. Thats about 0.003% of the UK's GDP.
BAE is not in the Forbes list of top 40 UK companies.
I'd expect more investigation than a rehash of BAE's press releases.
Complain about this comment
Hmmm, bribery? Like staying on a Superyacht or at someones big house? Where do commissions and bonuses sit in the black and white sheme of things?
Complain about this comment
Does our government do anything for UK companies (other than banks)?
I see that BA (the airline, not BAe) and its alliance has raised 'EU concerns'. Amazing! Has our UK Gov pointed out to thbe EU that they might be rather more concerned that Air France, KLM and Alitalia are (1) all one company and (2) also in a rather large alliance?
Complain about this comment
What BAE is accused of doing in Tanzania does not amount to doing business but is blantant exploitation. Sadly we have a salutary reminder of what the consequences of this can be; there is currently an severe drough in East Africa. Once again large numbers of the population are at risk, if not of starvation but of loss of income through loss of livestock and a subsequent life of destitution for them and importantly their offspring. Questions are being asked AGAIN why does this happen and what can we do to prevent it? The possibility of poor local water management and overgrazing through lack of education have been raised as possible causes as well as natural ones. When important resources which could have been deployed in education in this important areas are diverted to pay for inappropriate technologies which are too expensive, do not do the job and actively inhibit the development of sustainable industries (tourism) then the answers to these quesions - why again - can be laid at the door BAE and companies like them. That is the real cost of this action and arguing about how much they should pay seems ludicrous when the victims are already dying and unlikely to see a penny of it. And what is a billion pounds to them when all they want it to keep their goats and send their children to school. And when you watch the starving and desperate on tv AGAIN think about whether the price of a vibrant economy, and allowing a great British company to continue for the price of jobs and status is really worth it. In this case the arguement that we don't do it the Chinese / Germans / French looks very thin indeed.
Complain about this comment
#187. rbs_temp
"Presumably, then, you also believe that punishing the three people currently in court on charges of sexually assaulting young children is driven purely by the desire for revenge. It won't change the past, so if it's such a big issue why not just make sure it doesn't happen again and move on?"
I find your analogy flawed.
Taking your case: it would be like fining the camera shop who sold the cameras used in a summer sale at 50% discount (as bribes are not used supposedly in this country) by the three defendants. The desire for the fine would be based on revenge as clearly the sale didn't cause the harm the people concerned caused it.
I would expect the laws in a country to be upheld in a court of law, it is not against the law to have discounts in the UK. As are giving gifts or "bribes" normal in other countries.
Much as I would expect wife beating, hands being chopped off and stoning to death to carry on in a country under sharia law.
The VERY clear point here: attempting to overlay your own moral values from your own culture on another country is not only irrelevant, it is deeply insulting and offensive to those cultures. In that country it is YOUR morals that are wrong.
My moral set is one of the UK and my culture is of the UK, I would not condone Sharia Law. However that does not preclude doing business with another culture, even one under Sharia Law. In fact I acknowledge doing business with other cultures should not only moderate excessive traits in BOTH cultures but also allow greater pressure for change to be brought to bear over time - as would the other parties yield to that pressure.
Why do you think business has been done with Iran in the past and isolation by the international community is such a big stick to hang over Iran ??? Iran is dependant on that business, no matter how much you may not like that country.
Complain about this comment
SFO - get into the real world. However you would like big, international business to be run, it doesn't happen that way. Show us any of our EU "partners" who would be stupid enough to charge one of their own with such actions - I'll wait for a response ! - thought not. It just would not happen. They are not stupid enough to think that the arms trade is not done in this fashion. If we were to do so, thousands of hi-tec British jobs would be lost and our troops would doubtless be asked to fight a war with even less in their armoury. BAE should be applauded for wanting to come clean. Let's allow them to put this behind them and move on.
All of the above has been said before, but we cannot afford as a country to be the only one who plays by the rules. SFO look outwith your little tick box mentality and "get real"
Complain about this comment
armagediontimes (161)
These alleged offences were committed abroad. Jurisdiction on matters of alleged corruption is a matter for these sovereign nations. I see absolutely no reason for us to take action when it seems clear that these sovereign nations are not taking action against those who received the alleged bribe/commission and that the only way to win contracts in these countries is by the payment of bribes/commission.
If prosecutions are to take place they should be in the sovereign nations concerned and the company and those who received the alleged bribes should be in the dock together. It is unfair only to prosecute one side, which is the proposal here.
How you can equate alleged corruption/commission abroad with burgulary at home is beyond reason. The losers in this process of alleged corruption is the foreign sovereign nation concerned who pays an additional cost for the goods/services. What if a commission was paid to a third party who introduced the business, would you consider this corruption, if you knew this was the only way you could win the contract?
And don't you think that payment of commission is allowed in this country? Is there really any difference in principle between a law firm paying a legal marketing firm £95 plus VAT with whom they have a business arrangement as a fee for introducing business? Multiplied by a large number of cases, this could amount to a considerable sum. The sum of £95 is the maximum allowed by the Code of Practice published by the Solicitors Regulation Authority.
In conclusion, there is a stink of holier than thou attitude in comments supporting the prosecution and your contribution was a prime example of this.
Complain about this comment
@220 ClioScot raises an important aspect.
But, if we were genuinely interested in the poor in Africa or the (relatively much less and in a different sense) poor in the UK, wouldn't we launch massive education programmes. For me, education is essential to improving the lot of humanity. We might manage to educate people out of practices like bribery and corruption. They could even buy our stuff because they know us and we were good enough to educate them (if that's still corruption, it's a better kind).
One problem: it will not succeed before the next election or the one after that.
A second problem: for many governments, there's a strong vested interest in keeping the poor poor and badly educated.
Complain about this comment
Bribery and corruption are a part of these major industries in gaining contracts worldwide. To maintain british jobs Bae need to play the same dirty games as their competitors in the USA and other major economies of the world. It has always happened and always will. Let us stop shooting ourselves in the foot and beating up our industry for using common practice.
Complain about this comment
• cfylesuk wrote:
DrDelbert:
What a ridiculous post.
So if BAE went to the wall, which is fairly unlikely and I certainly hope does not happen, then I ask you this:
Where would YOU like Britian to spend it arms budget? Would you like the money to all be pumped steadily out of the country into foreign arm companies? While they laugh at us for 'morally' destroying our own industry?
Don't give me some fanciful tosh about not having a defence force of our own because only in a fairy tale land of PC Perfection could we ever dream of a world with no weaponry to defend oursleves.
Two issues I would like to point out here.
1. Japan has quite a good self-defense force. Certainly it has enough to deter any would be invader, just not enough to invade someone else. So, no, I would not ask that the UK remove all defense capability.
2. We should invest money saved by paying off our debt so that taxes can be lowered and the increased investment potential generated from that could then employ all those out of work skilled manufacturing and engineering workers in jobs making things like cars, solar panels, and so on that ordinary people currently buy from overseas. We used to make many of these things ourselves, but the government let them go to the wall and then said ‘we need to protect those manufacturing jobs in defense’. Makes no sense.
• DubaiCyprusGreece wrote:
Japan is, now, one of the richest countries in the world.
..yet those very rules didn't stop Toshiba from exporting sophisticated milling technology to the Soviets in the early 80s, allowing them to develop a whole new breed of quieter diesel submarines...
You just shot yourself in the foot there. You don’t like the fact that Toshiba was exporting goods to the Soviets, yet you think it is OK that the UK sends similar stuff to other countries and helps to create mayhem elsewhere. It is precisely that sort of double standard that results in Britain being so disliked around the world. That feeling that the British are a bunch of double dealing stirrers hits us in the pocket in the end, you know.
• MadTom1999 wrote:
DrDelbert wrote "Whatever happened to the special relationship?"
The special relationship with the US is 'what can the US get away with while seeing how high the UK will jump'. If we don't prosecute BAE for its crimes the US will - its already investigating! We don't have the leverage to get them to drop the case as we did with BA in the Laker farce.
Thank you for saying it for me. Agree wholeheartedly.
Complain about this comment
#201 conciliation wrote:
"I'm not sure what that part of the paragraph is trying to argue but I'll infer from the next you allege China is exploiting a market we should be exploiting first, because of our intrinsically "greater morals". A bizarre claim, to say the least. Perhaps it's best left at that."
No, I am not saying the UK should exploit these markets first. The UK has gone to great lengths to take steps to gain ethical and ecological supply lines for it's raw materials. A process the manufacturing industry in China has barely started.
The point I was making is that there IS a responsibility in ensuring our material needs are met in an ethical and ecologic framework. A simplistic statement saying we "can't compete on wages" does not give warrant to hoist and walk away from all those responsibilities on a foreign culture with no progressive morallity. Or in other words full moral control of manufacturing comes with our material needs being manufactured in THIS country. Further more, if you wish a moral framework imposed on other countries then as much as possible of the worlds material needs should be manufactured in THIS country.
"I'm not sure what that part of the paragraph is trying to argue but I'll infer from the next you allege China is exploiting a market we should be exploiting first, because of our intrinsically "greater morals". A bizarre claim, to say the least. Perhaps it's best left at that."
Even if the UK was exploiting resources in Africa, you can be 100% sure the ethical, economical and ecological framework would be far, far superior.
"Economically dangerous" = trade gap leading to financial met down, hey presto.
"I would prefer all companies, especially arms manufacturers, to operate with an understanding of the longer-term trajectory of complex political dynamics."
It may well surprise you to find out that arms manufacturers are well aware of political dynamics, as are the politicians who authorised the sale. Let's take the Saudi Jet's - if BaE with drew technical support those aircraft would soon end up as very expensive scrap. Trust between the UK and Saudi has been entered into at part of the agreement and that trust/dependancy will over time be a political tool in changing EACH OTHERS culture. As HAS and WILL the support of the Iraq and in the future the Afghanistan army. As WILL the fact of those armies near the Pakistan and Iranian borders. The political dynamics ARE there, it just either a refusal to see it.
"An unarmed person would take longer to do the same amount of damage as an armed one. If you provided the weapons responsible for a member of your family's even slight injury (clearly I fervently wish this is never the case) I hope you would be distraught. It takes a lot less time to kill 10,000 people with a 2,000lb fuel air explosive than a machete..."
Yet genocide with the machete has happened in recent times in Africa, just because a 2000lb bomb wasn't used doesn't preclude that it won't happen. As I keep saying, the 2000lb bomb isn't the culprit it is the person who decides to use the weapon. I conclude with if the 2000lb bombs were used to stop the genocide where does that leave your argument ? Were the manufactures then responsible for actually saving lives ??? No, they were responsible for making a bomb. The use of that bomb to either save or kill is down to HOW it is used.
"Al Qaeda leadership exists, now, and is to a certain degree implacable. But their decisions are altered by our actions; remember the "Spain is forgiven" declaration following that country's decision to remove combat troops from Iraq?"
I do not share the idea that if all western countries behaved "nicely" (whatever that is) Al Qaeda would disappear.
"If we allow or promote unpopular actions throughout the world, Al Qaeda will grow in popularity."
Unfortunately one of the unpopular actions is the fact you are alive and live by your culture/religion/morals.
Complain about this comment
This government appears determined to destroy all UK industry. When GB auctioned off the 3G mobile licences he took in excess of 5 billion pounds of what would have otherwise been investment in equipment and new services development and effectively destroyed the UK Telecommunications industry.
He and this Government now seem intent on doing something similar to the defence industry, The SFO investigations will cost millions in lawyers' fees, will take years and will produce nothing. In my experience, most if not all Islamic countries the culture is such that if you want to win contracts this can only be achieved if the designated people of rank are on your side. This involves employing for example prime ministers/ presidents relatives as advisors / consultants. Technically these are not bribes but in essence this is what they are as they provide access to the ultimate decision makers. Whilst we in the West may deploy the cultural values that underpin such behaviour we have to also ask is this any different to the jobs for the boys culture that saves so many ex ministers and the consultancies undertaken by so many MPs.The US by the way are the most blatant and their accusations against BAE are in my view motivated by the US government supporting its industry and US jobs.
Complain about this comment
So even if BAE did pay, who does the money go to and what is it used for?
Complain about this comment
The final decision rests with ...er.....Baroness Scotland........anyone care to guess which way the decision will go?????
Complain about this comment
A general presumption has been made that SFO has a sufficiently good set of allegations to succeed. An ability to mount a successful prosecution is the issue. Leave to call major "witnesses" will not be forthcoming. The president, king, etc. of a sovereign state called before a UK court? Never. The US effort will end in one of its infamous plea bargains for the very same reasons. So why start the process in the first place?
Complain about this comment
Not to excuse what BAE has done but here is another angle.
With bribes, BAE has secured contracts which helps UK balance of trade and secured UK jobs. This is at least far better than those (foreign or UK nationals) who may have bribed some of our politicians and public servants for public contracts, legislations and government policies which may have costed the UK many £billion's and hundreds of thousands of UK jobs.
Complain about this comment
When I lived in Germany I remember being informed that German companies were even allowed to write off bribes to foreign customers against their tax bill. I worked for a german company as part of a small team in an asian country at one time. I particularly remember that it was a common talking point of colleagues that the president's son had received several millions as a thank you for granting the supply contract to our company.
Complain about this comment
Are you people serious? how can you advocate illegality? yes, people speed when driving, people omit details when selling. in the same way, international transactions may require bribes (bribes, i might add, are different to commissions, and the line is far from fine)to secure deals but they are all illegal, and there is a risk of getting caught. so if you are caught you subject yourself to the law. peoples attitudes have started to stink a little in recent years... there is more to life than money. this case also proves another point - that corporations are getting so big that they are above the law - and wholly supported by the public it seems. i am fully in favour of making an example of BAE. The directors have fiduciary obligations to do the best for the company and abide by the law.
Complain about this comment
tao-das @ 228
You say that when GB auctioned off the 3G mobile licences he took in excess of 5 billion pounds of what would have otherwise been investment in equipment and new services development and effectively destroyed the UK Telecommunications industry.
I visited my sister a few days ago, she had just moved to a remote area in England that had been a broadband notspot, as opposed to hotspot.
However, my nephew and niece raved about the broadband connection, which they said was much faster than the ADSL line at their previous place.
I have subsequently found out that they are now part of a state-of-the-art 4G WiMax network.
Very interesting you might think but what on earth has this to do with politics?
That is where it gets interesting because there is a fairly direct connection.
Around the turn of the century, Gordon Brown held an auction of the 3G mobile phone licenses and the mobile operators foolishly, as it turned out, bid £22Bn for them.
The 3G technology itself is technically flawed, its fundamental problems are that it is not scaleable and needs three times the mast density of the older 2G (GSM) networks, and it is highly unlikely that the operators will ever get their money back.
Worse, this 3G technological cul-de-sac and more importantly, the money that they gave to Brown, has meant that very promising 4G WiMax technology is being rolled out at a very slow rate by the smaller operators as the larger operators simply do not have the funds.
At the time, £22Bn must have seemed like a very nice windfall for Brown and he used it to pay down the national debt from around £320Bn to £298Bn (it is now somewhat north of £600Bn).
However the longer term cost to the economy of not having very fast efficient broadband networks is at least £17Bn per annum according to Computer Weekly.
In my opinion, not having high speed broadband networks across the country will ensure we remain rooted in-the-land-of-nod.
Politics and technology - not always good bedfellows.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
I wrote comment #164 yesterday. My main point is that jobs are at risk here, and chose "The Whisky Priest" from "Yes, Minister" because it demonstrated this. Watch the episode on DVD!
Another one - in fact, a better comparison - was the episode "The Moral Dimension". Read about it here: http://en.wikipedia.org/wiki/The_Moral_Dimension
If you've got it on DVD, watch it again; timeless.
Complain about this comment
The alleged offences involved deals with foreign nations, where the alleged behaviour, right or wrong, is expected. Many of these deals were 'government to government deals' sanctioned by HMG. When the SFO extracts their pint of blood from the UK's largest remaining manufacturer will the government recognise the income tax and corporation tax paid by the workers and company respectively as immoral earnings and return the revenue from whence it came? ..... or merely buy another bank (talking of immoral earnings!)
Furthermore, undermining BAE Systems at this critical stage of military operations in Afghanistan merely endangers the lives of hard pressed British troops, who rely heavily upon the products and services supplied by the overstretched British defence industry to keep themselves alive. Perhaps those, on this site and elsewhere, who feel they can take the moral high ground would care to spend the night in Helmand? I thought not!
Complain about this comment
#235 JohnConstable
I agree with you however, it is not the technology decision that caused the problem but rather the auction method pushed by the treasury which drove the prices paid to ridiculous levels. Subsequently, when the operators had to stump up the cash to pay for the license fees they all had to slash their capital expenditure programmes to offset the drain on cash from their businesses which inturn hit the equipment suppliers. Result the UK lost the majority of its major equipment suppliers - British jobs for British workers had a very hollow ring after another brilliant move by GB as chancellor.
Back to BAE I believe that the Government allowing this case to re-emerge is a political move to bolster GBs credentials with old labour- it will not achieve anything - but damage British jobs and British exports.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
Nothing to do with corrupt business practices, but just a comment that I hope you apply your financial expertise to the Tories' plans for funding residential care. Now that surely is an area that those of a financial bent can get their teeth into.
Complain about this comment
Has BAE got £1bn to hand over and if it did would it become prey to foreign competitors and possibly broken up. A bit like the utility companies who handed over their windfall taxes.
According to Robert there is room for manoeuvre. So it seems strange that just before an election one of Britains few remaining successful international companies is to be deliberately and apparently wantonly clubbed on the head by a government body and Gordon is saying nothing.
Complain about this comment
I hope the SFO are happy that 30000 people are going to lose their jobs
as BAE who only carried out normal world business practices move their whole UK operation abroad and all the ship yards and defence contracts abandoned
Well done FSO you have put the final nail in the UK's Coffin
Complain about this comment
I come to this debate rather late but would like to add the viewpoint of at least one person who worked for the company in the international sales arena (which seems to be the area broadly causing all the comments about 'business ethics' to arise).
But first, a comment on the products of the company in the days (some years ago) when I worked there, to set the philosophy of overseas sales of defence equipment in both its commercial and political contexts.
We were a 'defence products' manufacturer, selling things like aircraft and missiles,(the latter principally anti-aircraft and anti-missile missiles), but not rifles, field guns, shells, helicopters, tanks - the types of equipment you would choose if you wished to embark on the mass slaughter of armies and people, as has been suggested above. The latter were all the province of Vickers and the Royal Armouries (since taken over). The BAe items were all high cost, very sophisticated equipments, with a specific rationale and purpose. They had been developed within the war scenarios and operational requirements of our own military services to operate for the defence of the United Kingdom in the context of a war between NATO and the forces of Communist Russia. Operational requirements may have changed now with the demise of Russia as a near-term threat, but the process of developing these types of equipment remains broadly the same. And the overseas marketing and sales of these equipments had, in ALL cases, the agreement of the British Government through its then 'Defence Sales and Marketing Organisation'. Overseas sales helped recoup some of the defence budget expenditure through taxes paid by both the company and its considerable workforce. Moreover, defence equipment sales have been seen by successive governments as a political tool to help bind other countries to us through mutual self-interest.
Now, there are other countries that decide they have analogous defence needs but do not have the skilled and knowledgeable industries and people to meet them. I'm afraid you have to accept that if a foreign nation believes it has a need for equipment that it can only reasonably satisfy by going abroad to buy, then it is entitled to do so. (Hands up if you drive a Japanese or German car and not a Morgan or Bristol - almost the last properly British owned car manufacturers - and are complaining about BAe selling overseas? Then I suggest you may be a hypocrite, sir).
Returning to the sophisticated and high-cost, BAe designed and manufactured products. A moment's thought should suggest that they are not purchased on someone's whim to earn a big fat bribe but that purchase follows from a perceived strategic need of the country concerned. These equipment are ill-suited to the mass killing of people, since designed to be effective in different (anti-aircraft, anti-missile, anti-ship, anti-tank) contexts. You don't as a rule try to commit the mass slaughter that people seem so focussed on by sending £5 million packages of equipment when a few platoons of soldiers with machine guns might do the job cheaper and better. But you do help to ensure the safety of your own people by dissuading the state next door from 'adventuring' within your own national boundaries if you have powerful enough resources available to deter and to respond to him.
Now to their 'business ethics'. Is there anything I can reveal that will support or demolish the BAe case? Well, nothing actually because, at my middle to higher management rank, if there were to have been anything 'done' (at a higher level of course) it was not done so anyone else could find out. Which, since in any big organisation people mix and talk around the bar on far-flung business trips and secrets eventually get out, is an argument for believing there was not a lot that was likely to have been 'done'. Any Serious Farce Office lawyer reading this, please note that it is probably mostly you lot talking up the problem for your next promotion opportunity.
In the context of the sometimes unexpected problems of dealing with overseas customers, here is a little insight into the thinking of one oil-rich Gulf state in those days - that in open competition (and I led the BAe effort, and in an ethical way!) a particular BAe air-defence missile system was the preferred choice of their defence minister but the sale went to an American company. Why? It was very simple. The Head of State said, if there were to be a war and we needed replacements for the missiles we had to use to defend ourselves, the British government could be relied upon only to block any further supplies to us whereas the Americans would continue to help us... Even twenty years ago, sovereign nations knew our governments were untrustworthy to their overseas friends, that we had an international name for behaving counter to our long term best interests. So what has changed?...
How much did that attitude cost us? Probably round £200,000,000 initial purchase price plus resupply, spares and maintenance over the years, plus political closeness and possible financial help now that we need it...
I support the contributor who said the present company Board have cleared away the practices of the past, which makes the present actions of the FSO more symbolic than practical. Moreover, given that the examples being followed up by the SFO it seems may well have happened before the law was enacted, makes the whole matter of dubious legality since Parliament did not intend the law to have retrospective effect. Or is this another example of the will of Parliament being sidestepped by the Regulators (sorry, FSO lawyers)?
Complain about this comment
#235 and #239
So your saying the free market doesn't work and/or more accurately technology and British management don't mix.
Having worked for a British company developing state of the art fibre optic components 20 years ago I fall about laughing at them now struggling to provide technology they HAD 20 years ago but sidelined to pay for advertising instead and seem to have lost.
Those companies either should have known what they were buying with 3G or should not have played at all. Brown might be an idiot - but not as stupid as those who joined in the auction and apparently payed over the odds for something they obviously knew nothing about. A fool and shareholders money and all that.
Complain about this comment
MadTom1999 @ 245
If your can be bothered to read my post @ 235 more carefully, you will see that I stated that these mobile operators' directors FOOLISHLY participated in Browns 3G license auction in a fiscally reckless way.
I happen to know that the senior technologists in at least two of those participating companies begged the directors not to play Browns game but hey what did they know, they were 'only' engineers, not money men.
Now we are where we are, and I must read the Digital Britain report, which I suspect wiil give a very low profile to 4G WiMax and the newer roaming 4G WiMax technology, for the obvious political reasons outlined in my previous blog entries on this subject.
Because English people as so politically apathetic, we appear condemned to remain in the digital land-of-nod, as the above illustrates.
Complain about this comment
I am an engineer working in manufacturing. I have have watched over a decline in our industry over the last 30 years.
I have witnessed the steady growth in power of the Far Eastern economies and the now the complete dominance of the Chinese. They copy other peoples designs, then use their cheaper labour rates to undercut all other businesses from other economies around the world. They are destroying manufacturing in the UK, Europe and the US. So there is less manufacturing and therefore fewer manufacturing jobs.
To those of you who seek to gain by taking the moral high ground in this debate, I ask you this: "Where will these 30,000 people gain work?". Many manufacturing jobs have already gone. And we are in recession.
These are people, with mortgages and bills and lives that are already difficult enough.
For those of you in safe institutionalised jobs like government and the SFO, please think just once about other people. Our people. British people. Your friends and neighbors.
And to the treasury, find a way to plug your budget deficit elsewhere.
Complain about this comment
I'm in exactly the same position as you Phil_is _right. I'd love to think that British people would take note of your sentiments but I'm afraid British people are just too thick. They'll carry on buying German, Japanese and soon Chinese cars and exporting jobs. Even the government subsidise them to buy foriegn cars.
Complain about this comment
I imagine that unsavoury dealings are part of big business the world over. But Bae does employ many thousands of people, and if the FSO go ahead, a great many will lose their jobs and join the unemployed millions already in our country. It's not their fault that big business is corrupt. By taking the moral high ground the SFO are ensuring that the Saudi's walk away from BAE. You don't insult a Saudi especially a Royal one and then expect business as usual. They will take their business to another country, probably the US, leaving the UK with egg on it's face, millions more unemployed and thousands of pensioners wondering how they will survive.
I hope the SFO can live with that.
Complain about this comment
It appears not only is morality in short supply with some but basic knowledge about the workings of British industry is also rather lacking too.
Those German, Japanese and Chinese folk along with several others actually make vehicles here with British workers for both the domestic and export market.
It is interesting to note the anti moralists are now resorting to scare tactics with the assertion 30,000 UK jobs will be lost should BAE have to actually hand some cash over, how do they know what the fine might be or what BAE is capable of handing over without clearing off?
If you care to check you will find fines and penaltys imposed by regulators are an all too regular happening in the British industrial and financial sectors, a clean up of British industry and commerce would benefit all of us.
Complain about this comment
For those who are defending BAE or believe the world will end should they be fined Peston reports at the very top of this page,
Can't pay, WOULD LIKE TO PAY.
They want done with the problem and are prepared to buy their way out of it, they were allegedly well practiced at buying off problems without ditching the labour force.
Complain about this comment
Good to see the Police/SFO can find the money to fund an expensive investigation against BAES which may put British jobs at risk. Saying British jobs for Indonesia lives is a pathetic and childish statement.
Shame the Police couldn't find the resources to investigate the scum who caused the lady in Leicester to commit suicide with her daughter - just sums up Britain in 2009..
Complain about this comment
#245 JohnConstable: whether current 3g/4g technology or whatever is not the problem. It doesn't matter if we argue about it at 512K like I do at home or 3MB in a traffic jam on the M25 while we have people who have no clue about technology writing reports about it it will be like the M25 - add more lanes and get more people queuing: more wasted lives, more pointless web content.
As for BAE - international law will mean they have to be punished. And that means either the SFO or the US bolstering their industries and strengthening the special relationship by being morally superior.
Complain about this comment
Not quite sure what happen to "innocent until proven guilty" on all this, how a fair trial could be conducted after all this media coverage with people already setting the size of the fine is just amazing!
Seems that the French and German authorities have been far more measured in S.Africa for example waiting to see if Thales and EADS have real issues there. Equally thought that the Romanian authorites had found no case to answer??
Complain about this comment
The whole idea of a prosecution is both ridiculous and a waste of time and money. Refusing a prosecution is the only sensible step the Attorney-General can take. It would be far more sensible and productive to conduct an audit of BAe processes to ensure that it is acting properly now and will do so in future.
Complain about this comment
It is astonishing how many comments support corrupt practices. I hope they aren't coming from Brits but I suspect they are which may explain why the country is going down the toilet and why the UK has the politicians it deserves....
Complain about this comment
This corruption scandal is no real big surprise. We all know that corporations are profit-mongering vultures. Simple risk-benefit analysis usually reveals that breaking regulations and picking up the fines later (if they get caught) is the most profitable avenue.
I cant believe the number of people who think that exporting weapons of death and destruction to fuel our ailing economy is morally justified. If the Death industry is the UK's major manufacturer then our biggest export is going to be war. Is that the path you want to see our country take?
If BAE practiced socially useful engineering - like developing infrastructure or 'green' technologies I might be more sympathetic
Complain about this comment
I would recomend the book "The Arms Deal in your Pocket" by Paul Holden (Jonathan Ball Publishers (PTY)Ltd. (2008). PO Box 33977, Jeppestown, 2043, South Africa) for a thouough and comprehensive analysis of the companies and people involved in this affair. It reveals the extent of the corruption amongst company executives and politicians involved in these scandalous deals in their cronological order with explanations of the often confusing technical terms with an "info box" previewing each chapter, with a short timeline of the key dates. With a foreword by Andrew Feinstein who points out that the billions spent on the aquisition of inapropriate and unnecessary arms could have been applied to addressing the plight of millions of South Africans facing the scourges of poverty and life with HIV and AIDS
Complain about this comment
First, it isn't just the arms industry that suffers from this kind of corruption, it is any developed worldwide corporation that wants to do large scale business with a country which does not have an effective free press, and legal system, or one which is ineffective against a ruling class. This includes lots of developing countries, but maybe also others.
Second, it is all wery well saying that this is the way the market works - the way of the world - but the distortions which it produces waste the resources of both the developed world's providers of the goods (or if they are armaments I suppose the 'bads') and the of developing countries themselves. The provision of a military air traffic control system which was out of date and over priced instead of a civilian system which was actually what was needed is a prime example.
(inevitably overpriced because the price will include the bribe money, and the contract may well be paid for by aid money) Legitimate commercial agency does merge with this corrupt practice, but it is possible to distinguish the two in most individual cases. Yes the arms industry is very prone to this corruption, but there is still a case for a legitimate export trade in arms to states which need to acquire the capacity to defend themselves.
How you control the corruption is another matter, and there may be a series of bitter choices to be taken by governemnts in the absence of effective international co operation in a system of regulation. The EU and the G20 can help with this and The Serious Fraud Office can do so too. Does anyone seriously think that the new management of BAe will actually turn over a new leaf, or will they just get better at concealing what they feel they have to do, unless an effective system can be developed.
Who says the French the Americans and even the Chinese would not go along with that if they thought it could be made to work? Not even trying to solve this hugely difficult problem is a counsel of despair, and there is no place in international affairs for such pessimism.
Complain about this comment
#257, Gr0wBaG wrote:
"This corruption scandal is no real big surprise. We all know that corporations are profit-mongering vultures."
Well, GrOwBaG,
I'm rather surprised that this "corruption" stuff gets so much attention.
If a country's leadership makes it evident that and accepts, if you want to sell you have to pay "facilitation fees" or whatever to secure a deal, it's not just UK companies who will be asked for such payments.
Does anybody seriously believe that sales to oil rich countries - whether of aircraft, other weaponry, nuclear technology or big infrastructural projects - hasn't been "oiled" in some way for decades?
Anybody seriously believe that the DTI or its derivatives were not aware of the commercial and political realities? (If they didn't they were not doing their jobs.)
Anybody truly believe that governments - hoping to assist privately or state-owned local corporations on their national behalves - were not aware of the way different nations operate?
Any idea why some governments happen to assist the selling of aircraft or nuclear plants? And some win. while others lose out?
Any idea why an earlier, Blair inspired, rejection of a prosecution against BAE for deals with the Saudis was "not in the national security interest", while other prosecutions could maybe be bought off? Why? OK. Bin Laden emerged from Saudia.
If there was "corruption" as an abstract concept, it should have equal legitimacy regardless of which country was involved.
Moral stance? Ethical position? Nonsense. Naive doesn't cover it.
Invert it. Football club wants to buy a player. Is told that to do so, it has to pay an agent a fee. Now the agent acts for his client - the player. Would seem sensible that the agent takes a cut from the player? No? Why not? Why should a club pay an agent?
Anybody who has had a minimal commercial engagement with certain countries over a few decades would know that the legal team would be worried about a "brown envelope" scenario.
Any politician who has any belief that a government department had no idea what was going on is commercially illiterate. And hoping that attention would not turn towards the political connivance.
Hence our present crisis. Politicians having to admit they really didn't understand what happened in the "real world"? Heaven forbid.
Bit like accepting that the 10p tax break could be thrown away with no consequences. That wasn't exactly a corporate decision, was it?
Complain about this comment
Have to say BAe NOT the biggest 'business-scandal' or 'financial-hole' facing the FTSE, FOS, pension... industry; criminals acting-for employers... concealing relatively-small liabilities have exposed 'blue-chips' to bankruptcy...
Literature includes 'For the want of a nail' whereby something as trivial as a missing horse-shoe nail spirals out-of-control
Shame in the run-up to 'key-date' 10.31.2009 Halloween those with the necessary 'cash' are NOT 'doing-their-bit'.
Complain about this comment
How can anyone be so naive as to think that these huge contracts are 'won' on best price and technical compliance? How can the British SFO even consider persuing this case when the damage to our economy as a result, would be catastrophic.
If you can't stand the heat in the kitchen; don't cook.
Complain about this comment
Complain about this comment
Bonkers Britian!! What are we coming to!!
1) Housing the Stansted hijackers back in 2000 in the Hilton.They claim asylum....
2) Dinner lady suspended after telling mother about playground attack on daughter.
3)Watching the 100's of people daily in Calais looking to sneak in the UK and if they get caught "claim political asylum". Guess who pays; the UK tax payer.
4) and so on.........
Now
One of the few of our last manufacturing companies that we have left and "we" represented by the government is looking to prosecute BAE for "corruption to gain Military contracts overseas."
Yes I am utterly gob smacked, What has happened to us?? Can someone please explain.
Complain about this comment
The SFO are intent on destroying British Businesses that are operating in the REAL World! My friends company endured legal costs of £4 million plus over 5 years, fighting the SFO on a 'Price Fixing' charge that when finally brought to Court... was thrown out!!!
Complain about this comment
Well okay so BAE paid X Millions, would we be any the wiser if they gave 1 free Aircraft for every 10 purchased. You may as well prosecute the supermarkets with their 3 for 2 offer's.
Every time you make a purchase we are entering into a contract, so if BAE were to offer me a free cabin crewe and pilot for the life of an Aircraft is that a Bribe?
Complain about this comment
JDIN - 2009/09/29
French defence exports rose by 13 per cent to EUR6.58 billion last year (USD9.6 billion) - their highest level since 2000
Complain about this comment
Ahh the "Lords of War".
Its a dirty business.
The question is how much we're prepared to compromise our morals and laws for British jobs. (The profits of the company are pretty much irrelevant given that they go to whoever owns the shares at the time, and they need not be British).
It a sad indictment when the former "workshop of the world", doesn't produce goods of sufficient quality at good enough value to be able to export them without relying on bribes.
If we condone bribery "because everyone else is doing it", where do we draw the line, if corrupt business practices are fine overseas, how about in Britain with construction companies defrauding the taxpayer, how about politicians taking money to influence policy?
Does it only stop when its considered not to be beneficial, and then beneficial to who? Is it only wrong, f you're the one losing out due to bribery and corruption?
There's also the question of what signals this sends to fledgling foreign regimes; if we talk about good governance at 1 time (despite our own debatable record in recent times) only to condone corruption whenever self interest dictates are we not in fact encouraging and supporting tyrannical dictatorships, and indeed arming them (although not necessarily with the most suitable weapons) only to send our troops to conduct wars of regime change in similar nations.
The hypocrisy of you may be a brutal dictator, but your one of our brutal dictators has done nothing for our standing in the world.
Its not so bad for the French and Germans who's companies supposedly engaged in such practices in breach of sanctions in Iraq; they tend to avoid having their troops in the front line dying if action is considered necessary.
Society is currently riddled with corruption and not enough is done to stamp it out, if BAE's underlying business is sound without the need for corruption, it will survive. Especially if things are done right and the former directors and senior managers responsible for such practices have their personal assets seized first.
Complain about this comment
If these actions took place abroad, were they illegal there?
If my partner and I go abroad, will we be prosecuted there because I had a pint last night here and she wore short sleeves, lipstick and no head covering?
Told youitwould
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
If they are not capable of placing someone in prison, then I fail to see where there is a case to answer
It is not possible for a company to commit fraud/pay bribes, poeple do that, not names on bits of paper.
Go find the guilty, prove their guilt, prove it was at the behest of the sharholders (as in they had a vote and decided to do this as a corporate mission) then take some money off them.
Oh you can't prove that...
SFO, jokers.... Didn't see you that interested in the expenses fraud though, and that was my money, and yours.
Comment questioning parentage has been removed, so hopefully this will suffice to pass moderation.
Complain about this comment
How can it be different rules for different geographies. Either you have scruples or you don't.
Deny business if the rules don't suit your morals.
How can the rules of doing business be forgotten in the name of generating employment or surviving.
Why have any regulation at all; why accuse the bankers then when they went free for all bonuses? Its easy to forget principles when the rules start to bite. I am for the fines and reprimanding a serious corporate player. How can shareholders allow such practices to happen?
Complain about this comment
My small business had trouble paying Corporation Tax. I could have just closed the company and paid nothing but I kept the company open and paid the tax late. I was fined for it being late and there was interest added.
Why couldnt I just say "sorry I cant afford to pay"?
Complain about this comment
226.
My comment about the Japanese was to highlight that this sort of deal is done world wide and that to single out Japan as a shining example of sound business ethics is perhaps misguided.
Also, your statement "It is precisely that sort of double standard that results in Britain being so disliked around the world" is also somewhat misguided - its been my experience that British workers are generally held in high esteeem wherever they go.
Complain about this comment
#273 Free_Scotland wrote:
I kept the company open and paid the tax late.
Why couldnt I just say "sorry I cant afford to pay"?
++++++++++++++++++++
It would not have been true, would it? We would all say that if we could get away with it.
CT is iniquitous as it is tax in advance on what you are expected to earn, isn't it?
Toldyou it eould.
Complain about this comment
RC-Berks Post 272
"How can the rules of doing business be forgotten in the name of generating employment or surviving".
Are you serious? The business of doing business is to generate profits, employment and growth/survival. One of the important things you need to do is to generate profitable sales, which is what this is all about.
It is often the case that in order to generate a sale that you need to offer incentives like a discount or easy credit terms. In these particular cases the incentive operated in a differnt way: the buyer wanted a commission/bribe in order to make a purchase.
You wrote: "How can shareholders allow such practices to happen?".
Why ever not? Whilst offering a discount would reduce profits, the payment of a commission/bribe to an intermediary might simply be added to the cost of the contract, which allows for the deal to go ahead on very favourable terms for the shareholders.
The losers on the deal are the country that allows the commission/bribe as that country pays more for the goods than they would if they did not have such a commission/bribe culture. It is for that country to take action against such practices and they should take action against all parties and not just the company, which is what the SFO is proposing in this ridiculous and ill thought out action against a succesful British company.
Complain about this comment
View these comments in RSS