BAE scandal heads to Paris

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TEXT OF INTERVIEW

BOB MOON: British officials are heading for Paris today, to explain why government officials in London cut off a bribery investigation into a major defense contractor, BAE. They're set to appear before a committee of the Organization for Economic Cooperation and Development. Marketplace's Stephen Beard joins us from London. Stephen, why all these questions for British officials about BAE?

STEPHEN BEARD: These officials have to explain to the OECD why the UK government pulled the plug on an inquiry by Britain's serious fraud office into a multibillion-dollar arms deal between BAE and Saudi Arabia. The allegation was that Saudi officials received bribes in order to secure that contract.

MOON: And has there been any indication why?

BEARD: It's pretty clear that the Saudi government brought intense pressure to bear on the Brits over this. They made it pretty clear that if the inquiry continued, they would pull out of a new arms deal and that could lose the UK billions of dollars and cost anywhere between 5,000 and 15,000 British jobs.

MOON: BAE as I understand is the Pentagon's biggest foreign contractor.

BEARD: That's right.

MOON: Is it possible that the U.S. could start investigating?

BEARD: Yes. There is now some suggestion that the Department of Justice might get involved and it could claim jurisdiction on the grounds that some of the alleged bribes that were paid 20 years ago in this transaction between BAE and Saudi Arabia, went through American banks.

MOON: And what would be the possibility the Saudis could put the same kind of pressure on the U.S. government not to investigate?

BEARD: Well as I understand it, there's never been a single recorded case of the Department of Justice caving as the result of political and commercial pressure form abroad. It's pretty unlikely that the House of Saud, which depends utterly on the U.S. for its existence, would dare to threaten the U.S.

MOON: Stephen Beard in London, thank you.

BEARD: Thank you Bob.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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