Leigh Day & Co has written to the Director of the Serious Fraud Office (SFO), on behalf of its clients Corner House and Campaign Against Arms Trade (CAAT), asking him to revoke the plea bargain struck with BAE Systems Plc (BAE).
In a negotiated settlement announced on 5 February 2010, BAE agreed to plead guilty to accounting offences relating to the controversial sale of a military air traffic control system to Tanzania and to pay a fine in the region of £30 million. In return the SFO dropped the far more serious charges of bribery in relation to BAE’s dealings in a number of other countries.
On behalf of its clients Leigh Day & Co argues that the Director of the SFO has acted unlawfully as the guidance under which the Director must operate makes clear that once the decision to prosecute has been taken, the charges agreed in any plea agreement must reflect the seriousness of the offending concerned.
The fine BAE has agreed to pay is of the same order as the value of the alleged bribe involved in the Tanzania deal. Crucially, by striking this deal, BAE has managed to avoid the possibility of a conviction for bribery which would probably have led to far more wide ranging sanctions (including debarment from public contracts) and the possibility of individual directors facing charges. In fact, BAE’s share price actually rose after the announcement.
While the SFO has announced that part of the fine being paid by BAE will be paid to the people of Tanzania in compensation for losses allegedly suffered as a result of the BAE deal, the potential victims in other countries now have no prospect of receiving compensation or discovering the full details of the fraud allegedly committed on them.
The SFO has been investigating allegations of bribery and corruption by BAE since 2004. In 2006, the SFO, under pressure from Downing Street, controversially dropped its investigation into bribery allegations relating to Saudi Arabian royal family. Leigh Day & Co represented Corner House and CAAT in proceedings challenging that decision. Although successful in the High Court, where it was held that the decision to end the investigation breached the rule of law, the House of Lords overturned the High Court finding that threats to national security made by the Saudis could not be ignored.
Richard Stein, Partner at Leigh Day & Co, said:
“It is with regret that once again our clients are forced to raise the possibility of litigation against the SFO in relation to BAE Systems. We hope that the SFO will reconsider its position on the BAE agreement. If not, our clients will have no hesitation in asking the Court to scrutinise the lawfulness of this agreement.”
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