UK-Saudi Typhoon row over?

Status
Not open for further replies.

Musashi_kenshin

Well-Known Member
Fighter aircraft fraud probe ends

The Serious Fraud Office has ended its corruption inquiry into a £6bn fighter planes deal with Saudi Arabia. Attorney General Lord Goldsmith said the SFO was "discontinuing" its investigation into Britain's biggest defence company, BAE Systems. The probe had related to the Al Yamamah arms deal with Saudi Arabia. BAE has denied any wrongdoing.

Lord Goldsmith told the Lords he thought that a prosecution "could not be brought". He said the decision had been made in the wider public interest, which had to be balanced against the rule of law. Lord Goldsmith also told peers that Prime Minister Tony Blair had agreed that the continuation of the investigation would cause "serious damage" to relations between the UK and Saudi Arabia.
All I can say is that I hope the Saudis make good on their promises and complete the Typhoon deal.
 

Musashi_kenshin

Well-Known Member
  • Thread Starter Thread Starter
  • #4
So the UK is stopping the investigation because they don't want to lose the deal?
It's impossible to know. That's the problem the government faces - everyone will assume they've done the "sneaky thing". It may have been it was fair enough to stop the investigation as it had been going on for so long without any charges being made.
 

SATAN

New Member
The "Good Lord" got the message from Blair and others about the implications of his BS inquiry.
'

Which is why the Saudis need to place an initial order for the Rafale Fighter jets in case the Talented Mr.GOLDSMITH starts another "inquiry" when Blair leaves office....which is going to be pretty soon.
 

gf0012-aust

Grumpy Old Man
Staff member
Verified Defense Pro
BAE hasn't exactly been an angel in the past...
The other mil industry companies will be breathing out slowly - as they've all played the local "consultancy/facilitation fee" process in the past. I'd argue that not one country represented by any members in here is in a position to walk free from safe inspection and be absolutely unimpeachable.

Goldsmith won't do a thing - BAE is the largest non US military commercial complex in the world, he won't be upsetting the applecart.
 

Big-E

Banned Member
So others have been? BAE will do just fine in the ME from my perspective, they're wired in the wright way!
Give me an example of a deal where a nation has been ripped off as bad as Romania was on the international market.
 

chrisrobsoar

Defense Professional
Verified Defense Pro
Give me an example of a deal where a nation has been ripped off as bad as Romania was on the international market.
A rather bold one line unsupported statement, I suggest; how about a clue to the topic and a little evidence, a link?

Are you referring to the deal in 2003 where Romania purchased two ex-Royal Navy Type 22 Frigates; because there were a lot of wrinkles associated with that deal.

Firstly, after the work had commenced Romania were unable make the milestone payments and so the refurbishment/modification program had to be cut back to the minimum. I was a Program Manager on the “Red Team” that was called in to access the recovery plan proposed by the Project Management Team. The company had spent a lot of money doing preparatory planning work and stripping out old equipment, before it was discovered that Romania would be unable to pay. There were export guarantees in place for some aspects of the work, but the finances were a mess. The upshot was that the ships were put back together, “re-furbished” and made sea-worthy at a price the Romanian could afford. The project did not make the profit originally planned (even in percentage terms) and it made a very large hole in the books for the associated division.

With regards to dirty dealings, it was BAE Systems that alerted the FSO that they were not happy with want was going on in Romania. The price of the project was being inflated by “in-country agents” to increase their commission in brokering the deal.

The Romanian government, the UK government and BAE Systems were taken for a ride by the local “wide boys”, who were very well practiced in dirty dealing from the cold war days. A few heads rolled in BAES as a result. After the project had been completed as usual a team did a review before the project was closed off, I noticed an odd line item, where there was a purchase order for sports equipment (shorts, shirts and trainers) in kids sizes. There were notes and links to a cheque from the local BAES Charity organisation, they had raised funds by the workers in the shipyard and matched (and more) by BAES. A bit late in the day the Project Manager noticed that the original request had asked for footballs, posts & nets, and that VAT and transport had been excluded; we found that he made up the difference with a personal cheque.

Having long since retired he still organises trips fro the UK (Scotland) carrying needed equipment to Romania, particularly leading up to Christmas (I have driven a few trips myself). Each year, near Christmas container loads of shoebox gifts leave Scotland for Romania, originally aimed at orphans, children in care and generally the needy.

BAES offered to cover at least twice over and pick up the associated costs of efforts of such originated within BAES units. They have honoured such commitments where operational units have been transferred to other companies, even if the original commitment has been matched the new company.

If you want to discuss this subject or another to which you refer in your original statement fine, we can start another thread.

As an aside, before we were married my wife visited the country and I had an official assignment there also during the days of the cold war.

A few comments about then: -

The locals queued for everything as soon as it was rumoured to be in stock, when ever was on offer they bought it (even if they did not need it).

They eat what ever was in season; there were almost no imports.

There were two clothes shops for men “Adam” for Women “Eve”.

I remember they had a great sense of humour and carried the burden of the hardship well. There were a huge number of jokes about pigs; this was code for about “Russians”, most of them totally unrepeatable.

A few comments about now: -

We have been back a couple of times since the wall came down; they are doing OK, still poor proud and having fun.

The government is trying to establish itself and maintain order, but there is still a lot of organised (and some institutionalised) crime.

It is not at all about big bad international companies ripping off the locals; it is more about playing as fairly as you can and still making the deal. (BAE Systems has very strict rules to ensure that UK laws are not broken and if anyone is found to be outside company rules and policy then they are dealt with very severely).


@Big-E

If you are currently operational, as you appear to be, at your rank, you have to be young 35 years of age max, probably 27 +/- 2.

If you want to make four star don’t ****-**-** at this early stage in your career we have better hopes of you.

No one-liners. State your point, quote and give links where appropriate.

Sorry if I did not provide many links as you will understand not much of this stuff has been published. But I think a quick Google will show that is about how it happened.




Chris
 

gf0012-aust

Grumpy Old Man
Staff member
Verified Defense Pro
Give me an example of a deal where a nation has been ripped off as bad as Romania was on the international market.
Not wanting to get involved in specifics here, but I've personally been exposed to the machinations of in-country brokers when dealing with NATO members and non aligned members who are not on what is referred to as
"the hostiles list". The "Hostiles List" is any country that is seen as a potential and latent adversary at either a military level, or is seen as of dubious discretion at a technology level (if we were to trade national interest secrets/technologies).

I've personally had contracts that have been inflated by up to 40% of the asset discretionary sale price by the in-country agent. Those tech or facilitation agents have come from all of the major military powers - and up until very very recently, all of the prime technology holders were more than aware that the price was inflated in-house - but accepted it as part of the culture of doing business in a particular vendors location.

One should also be well aware that cultural values vary enormously in some societies, what is seen as corrupt and unethical in one, is seen as standard brokerage/consultation/facilitation largesse, and is certainly considered to be acceptable as payment to the broker. I'm not condoning the depth of the practice, or of its existence, but to be critical of it per se is almost naive. Its here to stay, and will be ameliorated through other means. That is the nature of the beast.

As for BAE - and in defence of their willingness to stamp out internal corruption I can give two examples of how quickly and seriously they react.

In 1998-99 I was seconded to BAEa as part of a Garrison Support evaluation contract. Part of the contract involved sub contracting functions to other companies - and the money was considered lucrative. 2 senior managers were identified as milking "security" fees from potential applicant companies so as to lock in the job. Both were sacked within 24 hrs of detection, walked off the site with only their identifiable personal possessions and charged with fraudulent conversion.

In another example of Garrison Support breaches (NATO) we were aware that BAE and a large American company were being compromised by the behaviour of middle managers who were positioning tasks for maximum fees - and outside the spirit of the contract. All were sacked and removed within 4 hours of detection and confirmation.

Again, I would say that I've personally been witness to examples of corporate malfeance by every major country represented by members of this site.

Most of this is buried, as corporations aren't keen to have their dirty linen aired (much like banks don't publish how many times their electronic security is breached and money stolen through scamming) so anyone getting self righteous about the processes of another country could well and most probably have their own countries hoisted on the petard.
 
Last edited:

Big-E

Banned Member
Gentlemen, I don't see how you can defend this culture of corruption. It is not "naive" to espect transparency in a first world corporation that is heavily subsidized by government funds. If BAE is going to conduct business they need to do so in an open fashion like all business is expected to do. The SFO dropping this case is purely for political reasons and see 50,000 jobs more important than the principle of the matter.


@Big-E

If you are currently operational, as you appear to be, at your rank, you have to be young 35 years of age max, probably 27 +/- 2.


If you want to make four star don’t ****-**-** at this early stage in your career we have better hopes of you.
Call me young, call me naive... I prefer to call myself a man of integrity. If I see fraud in any defense contract I am apart of I will blow the whistle. I don't care if it costs me my job. That is why we have a free-press. I am a man of principle and will not defraud J.Q. Taxpayer. Anyone who is paid by tax dollars is expected to be good stewards and "transparent" in their dealings.
 

gf0012-aust

Grumpy Old Man
Staff member
Verified Defense Pro
Gentlemen, I don't see how you can defend this culture of corruption. It is not "naive" to espect transparency in a first world corporation that is heavily subsidized by government funds. If BAE is going to conduct business they need to do so in an open fashion like all business is expected to do. The SFO dropping this case is purely for political reasons and see 50,000 jobs more important than the principle of the matter.
But I think thats where you need to be careful about empirical standards of behaviour.

I'm involved with some UDT technology where American companies are conducting business under local cultural conditions. Read into that last line carerfully.

Do I criticise them for it? No, because they're not the only ones who do it. Again, I'd strongly impress upon anyone, that if they think that their own countries are on strong moral high ground, I'd bet my house that the contract had been massaged in various areas to secure the deals.

Not one country I know of can take a position of moral authority on this - irrespective of what their governments might say out loud in their respective houses of authority etc.....
 

Big-E

Banned Member
But I think thats where you need to be careful about empirical standards of behaviour.
My standards are... what makes it into the press. It makes the UK look BAD. We almost expect such behavior from Russia and to a smaller extent France but the UK has an image that it needs to keep up. Where is the PR department???

I'm involved with some UDT technology where American companies are conducting business under local cultural conditions. Read into that last line carerfully.
I don't have any problem with slush funds as long they are made availble to public scrutiny... what goes where. If we audit these American companies will they tell us what they have been doing or will they hide it?

Do I criticise them for it? No, because they're not the only ones who do it. Again, I'd strongly impress upon anyone, that if they think that their own countries are on strong moral high ground, I'd bet my house that the contract had been massaged in various areas to secure the deals.
I don't criticise them for greasing the wheels... I demand transparency in their transactions. If it's legal they have nothing to hide. The frigate deal was more than just greasing the wheels which is why it made a stink.
 

contedicavour

New Member
There are so many different degrees of what one may consider inappropriate behaviour...
> when top politicians lobby hard in support of national defence industries
> when defence companies are forced to negotiate huge offset deals of more than 100% of face value of defence systems
> when politicians of the buying country require contracts for companies they indirectly control or from which they get money or political support

I could continue for pages, but to keep it short & clear, even if you stay away from downright bribes, there are plenty of opaque dealings that you need to do to stay in business. This happens even in the West and outside of defence industry btw... but that's another story :rolleyes:

cheers
 

Musashi_kenshin

Well-Known Member
  • Thread Starter Thread Starter
  • #18
Just a random thought here. Obviously some people are annoyed that Saudi Arabia put pressure on the UK and the pressure worked. But why only look at arms sales - what about foreign policy?

China threatens to retaliate against any country that helps Taiwan gain entry to world bodies like the WTO, let alone recognise it as an independent country. Hell they put pressure on anyone that tries to establish a "trade office" there. But generally countries bow to China's pressure, despite that being a violation of countries' rights to have their own foreign policy. It's also rather dispicable to leave the Taiwanese in the cold and isolated.

Now I wonder whether the critics of this recent episode in the UK over Saudi would support a policy that supported Taiwan in the international community, at a cost of cheap imports from and the loss of exports to China? I doubt it.....
 

chrisrobsoar

Defense Professional
Verified Defense Pro
gf0012-aust you are 100% correct.

I also have had similar experiences when negotiating contracts with companies and governments all over the world (including the UK, US and Australia). The situation is much better in the west than in some areas of the world, but nowhere is squeaky clean.

It is also not confined to the defence industry all businesses are affected. A friend runs a company that manufactures flame retardant material and related products (he is also a stunt co-ordinator and got into the business by making equipment for his special effects). In his office he has a table of the level of bribes that are expected for each country in the world. There are different tables for each industry and business section; they are updated monthly and obtained by subscription.

The difference between a bribe and a commission often is just a matter of timing.


Chris
 

SATAN

New Member
Getting back to the subject....it seems the Saudis have bought the British back to their senses. It was just a case of selective meddling by vested interests. No one talks about British arms exports [Admin Edit: Text deleted. You know better than this to go into this kind of detail. ] or about the Billions of pounds of advanced weaponry sold to Saddam's Iraq in the 80's ...so why start now and screw up the second stage of the Al-Yammah (Dove) arms contract signed by Margaret Thatcher in 1985. It is worth $70 Billion with tech and maintanence support till 2030. BAE surely needs it since Turkey backed out of the Eurofighter as well as Greece opting instead for the F-16 and the F-35 in Turkey's case.
 
Last edited by a moderator:
Status
Not open for further replies.
Top