Campaigners continue to raise concerns about SFO-BAE settlement process — Press Release

April 8, 2010 by Matthew Potter · View Comments
Filed under: BAE Systems, Business Line, Companies, Events, Press Releases 

Campaigners continue to raise concerns about SFO-BAE settlement process

Campaign Against Arms Trade (CAAT) and The Corner House today announce with regret that they are withdrawing their application for a judicial review of the 5 February 2010 decision by the Serious Fraud Office (SFO) to enter a controversial plea bargain settlement with BAE Systems and to drop “conspiracy to corrupt” charges against a BAE former agent, Count Alfons Mensdorff-Pouilly.

Kaye Stearman of CAAT says: “We are disappointed we cannot take the judicial review process further. Anyone looking at the details of the numerous corruption allegations regarding BAE that have emerged over the last six years can draw their own conclusions as to whether or not justice has been served by the plea bargain that SFO has accepted from this large, well-connected company.”

Nicholas Hildyard of The Corner House stated: “Many searching questions still need to be asked about a plea bargain process in which corporates negotiate their crime and punishment. Legal guidance needs to be strengthened if the SFO Director is to fulfil his duty of upholding the law rather than helping companies avoid its consequences.”

Our challenge was brought relying upon the facts as we understood them to be. A significant factor in our understanding was an SFO press release of 1 October 2009 in which the SFO stated that it intended “to prosecute BAe Systems for offences relating to overseas corruption . . . in Africa and Eastern Europe”. The SFO has now admitted “with hindsight” that while “the ordinary language of the press release” conveyed the impression that its investigation was complete and the SFO had decided to prosecute, the press release in fact “overstated the stage which had been reached in both the investigative and prosecutorial decision-making process”.[1]

The SFO’s admission, coming in response to our judicial review application, makes it difficult to sustain any legal challenge to the lawfulness of the plea bargain agreement with BAE on the lesser charge of accounting misdemeanours in Tanzania. CAAT and The Corner House do not now believe that they can succeed in persuading the Court that the SFO should have prosecuted for the more serious corruption offences in Eastern and Central European countries if, contrary to the impression given in October 2009, the SFO was not then in fact in a position to mount such a prosecution. This is despite the SFO itself stating in preliminary court hearings in February this year to prosecute Count Alfons Mensdorff-Pouilly that “from 2002 onwards, BAE adopted and deployed corrupt practices to obtain lucrative contracts for jet fighters in central Europe” in a “sophisticated and meticulously planned operation involving very senior BAE executives.”[2]

Despite withdrawing their legal challenge, the groups remain deeply concerned at many aspects of the settlement and the process that led up to it:
*       The SFO has apparently given an undertaking to BAE that it will never in future prosecute any individual if doing so involves alleging that BAE was guilty of corruption.[3]
*       No explanation has been given as to why the US plea bargain settlement on BAE’s deals in Eastern and Central European countries took priority over the SFO’s prosecution in the UK, given that BAE Systems is headquartered in the UK and the allegations relate to activities emanating from the UK.[4]
*       The SFO Director acknowledges that “a conviction for an offence of corruption would have had the effect of debarring BAe for tendering for public contracts in the EU” under Article 45 of the European Union Public Sector Procurement Directive 2004. The SFO’s own Guidance on Corporate Prosecutions states that “a decision not to prosecute because the Directive is engaged will tend to undermine its deterrent effect”, which “is intended to be draconian”. Yet the SFO Director states that this consequence would have been “a disproportionate outcome.”[5]
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High Court grants injunction against BAE settlement — Press Release

March 2, 2010 by Matthew Potter · View Comments
Filed under: BAE Systems, Business Line, Companies, Countries, England, Events, Press Releases 

High Court grants injunction against BAE settlement

The High Court has granted an injunction prohibiting the Director of the Serious Fraud Office (SFO) from taking any further steps in its plea bargain settlement with BAE Systems.

The injunction is in force until the Court has decided whether or not to give permission to Campaign Against Arms Trade (CAAT) and The Corner
House to apply for a judicial review of the settlement. It will make this decision by 20 March 2010.

Lawyers acting for The Corner House and CAAT formally lodged papers seeking judicial review permission on Friday 26 February 2010, together
with a request for the injunction.

LEGAL DOCUMENTS
Interim Injunction Order:
http://www.thecornerhouse.org.uk/pdf/document/InterimInjunctionOrder.pdf

Injuction Application:
http://www.thecornerhouse.org.uk/pdf/document/InjunctAppln.pdf

Judicial Review Application: Facts and Grounds:
http://www.thecornerhouse.org.uk/pdf/document/FactsAndGrounds.pdf

For further information, background and earlier press releases, go to:
http://www.thecornerhouse.org.uk

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