BAE falls under American scrutiny

Stephen Beard Jun 14, 2007

TEXT OF STORY

MARK AUSTIN THOMAS: The British defense giant BAE is likely to face a criminal investigation in the U.S. The Guardian newspaper says the Department of Justice is preparing a corruption inquiry into the British firm. From London, Stephen Beard has more.

STEPHEN BEARD: Quoting sources in Washington, the Guardian says it’s 99 percent certain that BAE will be investigated for bribery.

The company is alleged to have made secret payments of $2 billion to a Saudi Prince. The payments relate to a massive arms deal between BAE and Saudi Arabia.

David Leigh of the Guardian says the Department of Justice is getting involved because the payments were made through an American bank account. And BAE has been buying up American arms companies and is bound by American law:

DAVID LEIGH: BAE has undertaken to the United States that they will comply with all the provisions of the Foreign Corrupt Practices Act as though they were a U.S. company. If it turns out that has not been the case, they could be in a lot of trouble.

If there is a U.S. investigation, it would be acutely embarrassing for the British Government. Prime Minister Tony Blair pulled the plug on an official British corruption enquiry after pressure from the Saudis.

In London, this is Stephen Beard for Marketplace.

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