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U.S. may probe BAE corruption case

Marketplace Staff May 2, 2007



The Times of London says the Department of Justice may be looking for a way to pursue claims of bribery against the large British defense company BAE Systems.

David Robertson is a Business Correspondent for the Times of London and author of today’s report. I asked him if the question is whether the Department of Justice (DOJ) has the jurisdiction to investigate the British company.

DAVID ROBERTSON:That’s correct. If any of BAE’s activities has gone through U.S. jurisdiction, U.S. territory, then the DOJ could potentially launch an investigation.

THOMAS:Is the DOJ working with the British government at all?

ROBERTSON:They have had a meeting. But that was at a point when the serious fraud office in the U.K. was doing its own investigation into BAE. That was ended last year by the U.K. government on the grounds of national security.

THOMAS:Can you talk a little bit more about that? Why was it ended?

ROBERTSON:It was a highly political decision and it was also highly controversial. The Saudi government is believed to have made representations to Tony Blair, the prime minister, asking for the investigation to be halted. And they basically threatened to withdraw security support if the SFO continued their investigation into BAE. BAE has very large contracts with Saudi Arabia.

THOMAS:If the Department of Justice is able to pursue charges, how serious are the penalties?

ROBERTSON:Very serious — potentially, they have the option to seize or claim back all profits made by the company on a transaction that is deemed to be corrupt. They can also issue criminal and civil fines. And in the case of Baker Hughes, and oil services company, last week those fines amounted in the end to $44 million.

THOMAS: Thanks so much, David.

ROBERTSON: OK, thanks very much, guys

THOMAS: David Robertson is abusiness correspondent with the Times of London.

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