BAE Settles US and British Anti-Fraud Investigations

Speaking of improper influence in defense contracting, BAE just settled the British and American fraud investigations against it.

BAE Systems will admit two criminal charges and pay fines of £286m to settle US and UK probes into the firm.

It will hand over more than £250m to the US, which accused BAE of “wilfully misleading” it over payments made as the firm tried to win contracts.

Perhaps not surprisingly, we don’t get the details about what role particular individuals–like Bandar bin Sultan–played in the influence peddlings.

In a deal with the US Department of Justice (DoJ), BAE admitted a charge of conspiring to make false statements to the US government.

A charge filed in a District of Columbia court contains details of substantial secret payments by BAE to an unnamed person who helped the UK firm sell plane leases to the Hungarian and Czech governments.

The DoJ also details services such as holidays provided to an unnamed Saudi public official and cash transfers to a Swiss bank account that it says were linked to the £40bn Al-Yamamah contract to supply military equipment to Saudi Arabia.

The DoJ gave a damning condemnation of BAE which it said had accepted “intentionally failing to put appropriate, anti-bribery preventative measures in place”, despite telling the US government that these steps had been taken.

It then “made hundreds of millions of dollars in payments to third parties, while knowing of a high probability that money would be passed on to foreign government decision-makers to favour BAE in the award of defence contracts”, the DoJ said.

But at least they’re going to have to pay far more than Scooter Libby paid for his false statements.

  1. Arbusto says:

    Such patriots from the Carlyle Group, Frank Carlucci, James Baker and Bush Sr, sell UDLP, an American defense contractor (ex FMC Grounds Sys.) to the Brits, off shoring more US profits. Did Bush Sr connection give ol’ Benar Bush a leg over for the big baksheesh?

  2. readerOfTeaLeaves says:

    Saw the lede at Financial Times earlier and it made me irritated just to see one more ‘investigation’ that is basically trying to keep the veil over the mess.

    In many nations, corruption is a way of life. Globalisation has never really had any kind of public concensus about this issue of ‘baksheesh’, albeit on BAE’s level this is a rather grand scale.

    It wouldn’t surprise me if some participants thought the UK and US were nuts to be investigating ‘business relationships’. And the fact that those very same people are not being called out and publicly humiliated and ridiculed pisses me off.

    Some people think of business as a bazaar — no prices are listed anywhere, the haggling is the point. Three different customers each pay three different prices, depending on how skilled they are at bartering (or how much dirt they have on the seller). If those are the rules and everyone knows its a bazaar, buying becomes a rich social experience.

    But most of us in the US grew up with ‘markets’: you go, the apples, bananas, cars, and clothing all have prices marked on them and you pay what the marked prices states; you don’t barter. You might compare between one shop and another, but it would never enter your mind to negotiate the price of jeans with a Costco employee.

    We have a global system in which some people think its one big, huge bazaar and the price is whatever they can extract from your hide. And we have people who think that ‘markets’ have ‘prices’ that represent ‘perfect information’.

    I often think the bazaar sellers are at least a bit more honest about the fact that the cost is whatever they can barter, wail, or cajole out of you. It is what it is; you don’t like it, move along.

    But that does not work in a world of ‘markets’.
    If you are going to have markets that function, you need to hold people to certain kinds of behavior.

    Simply tacking a fee onto bribery, while letting all the antisocial, selfish behavior remain hidden from the larger public is complete and total bullshit. It just means the same crap will continue to happen, escalating in scale and depravity.

    And that makes me hostile.
    The next time Richard Shelby or Corker or Sessions start yammering on about the hallowed sanctity of markets, they ought to be laughed out of town.

    If ‘pricing’ is all about ‘information’ — but you allow the information to remain hidden and secret, then you have an incubator for black money.
    You can extract a punitive fee, but that’s just a hand-slap and a complicit agreement to ignore the black money floating around.

    • bmaz says:

      “Settlements” like this make criminal conduct merely and incidental and trivial expense in doing business. Same goes for the “settlements” the SEC keeps trying to do to to shield big corps from criminal investigations and scrutiny, such as with BofA. And make no mistake, this is a formally adopted policy that started during the Bush Administration and has been fully adopted by Obama.

  3. earlofhuntingdon says:

    Settlements are such an elegant way to keep a lid on the bad things corporations and countries do together. I would take a tenth of this amount in cash in exchange for full elocution of their crimes in open court, and for some real person actors in this multi-year drama to spend a little time in a cell with Bubba or Freda.

  4. klynn says:


    Please tell me you have a punching bag at home.

    News like this requires a round of footwork and swings at a bag, just to clear ones head.

    I think I am going to print a bumper sticker:


  5. orionATL says:

    Let’s see now,

    G.W. and JEB show up At The white house around the time that BAE gets a cheap pass from the american (and british) govts for misconduct.

    Could there possibly be a connection?

  6. orionATL says:

    Oh, and just today,

    Reading a magazine recently,

    I saw an add by “bae systems”

    For surviellance aircraft.

    From the picture, it was clear they were advertising drones.

    Is there more than one “bae systems”?

  7. mafr says:

    sung to “love and marriage”

    politicos, and flyers,

    dealers and banksters,

    go together like a

    horse and carriage.