U.S. Investigates BAE Payoff Allegations

U.S. investigates BAE payoff allegations

http://www.chinapost.com.tw/international/112523.htm

Saturday, June 16, 2007
WASHINGTON, Los Angeles Times

The U.S. Justice Department is investigating whether British defense giant BAE Systems, which supplies Bradley fighting vehicles to the U.S. military and is becoming a major player in the U.S. defense industry, paid bribes to win contracts in Saudi Arabia, Chile and elsewhere, federal officials confirmed Thursday.

The Justice Department's fraud section, with the FBI's help, has begun a preliminary investigation to review allegations that the company conducted an ambitious campaign of payoffs to key officials to win contracts to sell fighter jets and other major weapons systems, according to several federal law enforcement officials familiar with the case. The key officials included Prince Bandar bin Sultan, former Saudi ambassador to the United States and a close Bush administration ally.

The probe will focus on whether the company, by allegedly using U.S. banks to make some of the payments, violated the Foreign Corrupt Practices Act, or FCPA, and U.S. money-laundering statutes. Those laws prohibit bribery in soliciting contracts and bar companies involved in such practices from the U.S. market. Allegations that BAE has engaged in a systematic effort to bribe foreign officials over several decades have caused a sensation in Britain, and the opening of a U.S. front in the controversy could vastly expand its potential impact.

The Guardian newspaper in Britain reported Thursday that the Justice Department was preparing to open an investigation into BAE, and that it would cover its weapons sales to Saudi Arabia. One federal law enforcement official told the Los Angeles Times on Thursday that the probe had already begun, and that it was more extensive. "It's not just Saudi payments that are an issue here," but BAE's aerospace and weapons deals with numerous other countries, said the official, who spoke on the condition of anonymity, citing the sensitivity of the ongoing investigation. Authorities are "looking broadly; it's a company-wide thing."