Posted on 06/26/2007 7:01:16 AM PDT by BGHater
The US Department of Justice has launched a formal investigation into allegations that BAE Systems, Europe's largest defence firm, paid hundreds of millions of pounds in bribes to a Saudi prince.
The allegations of illegal payments by BAE relate to the £43bn Al Yamamah deal, under which Saudi Arabia was sold Tornado jets and a range of other military equipment and services.
News of the US probe sent BAE shares tumbling by 9pc in early trading.
The BBC and The Guardian newspapers claimed earlier this month that Prince Bandar bin Sultan, the former Saudi ambassador in Washington, received up to £120m a year from BAE over a ten year period, in order to help seal the Al Yamamah deal.
Prince Bandar, who is now head of the country's national security council, has strenuously rejected the claims.
Executives at BAE have consistently denied allegations of wrong-doing.
In a brief statement released this morning, the company said: "BAE Systems has been notified by the US Department of Justice that it has commenced a formal investigation relating to the company's compliance with anti-corruption laws, including the company's business concerning the Kingdom of Saudi Arabia."
The Serious Fraud Office called off an inquiry into BAE's dealings with Saudi Arabia in December after Prime Minister Tony Blair said it could harm national security and relations with the Gulf kingdom.
Downing Street declined to comment on the US investigation.
A formal probe in America could prove damaging to BAE, which has been looking to expand in the US.
Last week, BAE's $4.5bn (£2.25bn) bid for Armor Holdings was approved by a US Treasury committee that looks into foreign investment.
Nick Cunningham, an analyst at stockbrokers Panmure Gordon said that executives at BAE should be "worried" by this latest development.
"This is a serious issue for BAE executives because they could be prosecuted," Bloomberg reported him as saying.
On June 15, BAE appointed Lord Woolf, former Lord Chief Justice of England and Wales, to lead a committee that will look into BAE's ethical standards following the allegations of bribery and corruption.
But the panel will not examine the Saudi arms sales or any other past dealings.
I worked with BAE Systems. They need to be investigated.
Why?
Whoopsie doodle!
I work for BAE Systems. Started 2 months ago. So far it has been a great company to work for. But then again this is my first experience in the civillian sector after 22 years in the Marine Corps.
This is what happens when you try to cut ties with the French (Airbus). Saudi Arabia is now making noises about buying the Mirage Jet.
BAE is slipping on FSTE.
BAE North America is isolated from the mother ship via a special security agreement which allows BAE to do business with DOD and be treated as any other American corporation.
Didn’t they snag the contract to build the new Marine One away from Sikorsky?
Lockheed Martin lead the winning team that BAE was a part of.
Thanks. Hardly an all-american presidential helicopter.
I have worked for BAE Systems (and the parent company Tracor) for almost 9 years. I have had no complaints about this company and will continue to support it.
Except that it is not an American company.
It is a foreign company who’s country may or may not be an ally in the future.
I hope that this is the end of foreign meddling in our arms industry.
Jorge is hardly an all American president.
I have worked as a teammate of BAE’s on projects and they are like most big companies - some departments are excellent and some are poor.
I know that you worry that BAE is owned by a foreign country, but we have been allies with the Brits since the war of 1812, so I think we are safe.
‘I hope that this is the end of foreign meddling in our arms industry.’
Does the Harrier and the 20% BAE stake in the JSF count as foreign meddling in your arms industry? Howabout the UK giving the US radar in 1940? Was that meddling? Or the Merlin Engine for the P51 Mustang? Or the British Chobham armour on your Abrams tanks in Iraq?
There is a big difference between foreign meddling and allies fighting a mutual enemy.
Anyway, this is nothing to do with meddling in the US. This is about BAE systems giving money to the Saudis in return for defence contracts. Which obviously of course they have been doing.
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