BAE Bribes Scandal

Discussion in 'Current Affairs' started by Nutty, May 13, 2007.

Welcome to the Navy Net aka Rum Ration

The UK's largest and busiest UNofficial RN website.

The heart of the site is the forum area, including:

  1. Perhaps BAE are not going to walk away from this one even if our Tone decided to pull the Plod off the case in the UK

    Bribe Scandal

  2. Nutty mate, you should've called this thread "BaE Bribes Normal" instead. :)
  3. I personally don't see what the problem is with Bae paying bribes to secure business abroad. If they didn't secure the business i'm pretty damm sure that the French would have done, and probably chucked in a few free shopping trips to Paris in the deal.
  4. Want is needed is a level playing field. To stop BAe from oiling the wheels of commerce puts them at a disadvantage when they are in a bidding war with other manufacturers. As a manufacturer BAe has a duty to both its shareholders and its workforce. the shareholders expect dividends and the workers expect to be employed. Anyone who has worked in the third world (where much of BAEs business is done) knows that nothing happens without the odd sweetener. If every manufacturer were to play straight and fair then great, but they don't.
    So chaps stiff upper lip, tallyho & be British.
    Result French, German, Italian, Russian, Chinese workers are all in secure jobs while the British worker is on the dole.
  5. Funny how the Yanks only started whining about BAe bribes when their bribes didn't win them the contract…

    I don't suppose for one minute this would have anything to do with them failing to convince teh Saudies to buy 72 of their jets... :?:
  6. Perhaps in this instance our bribes were superior to theirs :)
  7. That and the fact the Yanks will only sell them second rate shit that has been pre-approved by the Israelis.

    I hear the Israelis are not too chuffed at the Saudies getting their hands on a fighter that can wipe the floor with theirs. They've been able to piss on everyone in the region when it suits them due to Uncle Sam making sure they have the best kit by far. Maybe now they will have to stop playing like thugs and start trying to be nice to their neighbours for a change.
  8. I am sure that the Froggies and Ruskies etc pay bribes. Is there any proof that the Yanbks pay bribes... I am sure they would love to but their legal stance on it is pretty uncompromising and judging by the way they are going after BAE, if BAE knew of any yank companies engaged in bribes surely they would shop them!
  9. BAe bribing ? 8O
    They were 'commissions' for making the path of authority run smoother !! :wink:
  10. Why is everyone referring to bribes. Surely they are only financial inducements.
  11. The yanks call it lobbying their reps (greasing the squeaky wheels), it is then the politicians who exert muscle to ensure the winning bid goes to their bud's, this is why Lockheed and Boeing, always find buyers in the world market.

    The US can be a bit disingenious, when defending their bids as being above board, there is a lot the public never sees when contractors quote on jobs. :wink:
  12. sgtpepperband

    sgtpepperband War Hero Moderator Book Reviewer

    The controversy involving BAE Systems is based on evidence that BAE set up a "slush fund" of some 60 million-plus pounds to bribe Saudi officials into continuing to contract for arms purchases. That money was channeled through "fixer" Wafic Said, a Syrian born Brit and friend to the Saudi Royal Family who has subsequently risen to become one of the country's wealthiest men.

    A continuing inquiry by Serious Fraud Office investigators has imperilled a twenty-billion pound contract for 72 Typhoon fighter jets. Executives at BAE and labour unions wants the probe to end immediately, for fear that the Saudi's will pull the contract and give it to the French.

    However there was a recent breakthrough in the investigation: the discovery of a Swiss bank account controlled by Said which may show direct payments to Saudi officials. The British government outlawed such payments in 2002.

    The Serious Fraud Office launched its investigation into false accounting and corruption at BAE two years ago, amid claims by an outside whistleblower that it operated the slush fund.

    The money was said to have been used to bribe Saudi officials with exotic holidays, expensive cars and lavish entertainment.

    SFO officers have interviewed a number of BAE executives, and investigators predict that charges could be brought in a year. The Al Yamamah deal, brokered by Margaret Thatcher, was signed in 1986 by Michael Heseltine, then Defence Secretary, and Prince Sultan bin Abdul Aziz Al Saud.

    It is Britain's biggest defence order, with a second £10bn contract agreed in 1988. The deal is now in its third phase, with the Government in talks with the Saudis to secure a £10bn deal to provide more than 70 Eurofighter Typhoon jets.

    BAE, formerly British Aerospace, has won the lion's share of the defence work springing from the deal. Chief executive Mike Turner last year said BAE had received $43bn (£23.2bn) from Al Yamamah since 1985, but analysts estimate the contract could eventually be worth up to £150bn.

    A BAE spokesman said: 'BAE Systems continues to co-operate fully with the SFO. As this matter is ongoing, it is not possible to comment further.'

    I won't hold my breath about Defence Ministers being prosecuted... :roll:
  13. Let's get a few things clear about BAE.

    1) They're not really British. Out of 100,000 employees, about 30,000 are employed in Britain.
    2) The kit they produce is overpriced, late and rubbish
    3) This sale of Eurofighter is dangerous. Unlike previous deals which included highly profitable maintenance contracts, this one is selling them the technology behind the Eurofighter, technology that you & I as taxpayers, paid £20bn to develop. The Saudis are paying £6bn.

    Why does this matter? At the moment, the Eurofighter, F22 and Rafale are the best air-superiority fighters around. Nothing the Russians or the Chinese have comes remotely close. BAE don't like that. If there's no threat, they can't get contracts for the next generation of fighters. Do you think the technology will stay in Saudi? No chance. They'll flog it to anyone who pays and before you know it, the Russians and the Chinese are flying equivalent jets. So the west gets worried and Europe goes running to BAE with a big chequebook.
  14. I am really quite surprised that both the Frogs and the Yanks have poked their sticks in this hornets nest, because now the hornets have been disturbed there is no real certainty where and how widely they will strike. The risk to them of the contract going to BAe must have been extreme. Normal business practice in the area, and many other parts of the world as well is that the seller will pay a commision to a local agent who has helped in the sales process. In general this provides a risk free marketing arangement because the agent will provide marketing services with no upfront payment so if the contract is not won there are far lower marketing costs than if the company had had to do all the work itself. Now in some countries it is very likely that some, perhaps much of the commission will find it's way into the purchasers pockets. Equally if the job is big enough entertainment of the potential purchaser will be required, the level of entertainment will vary according to the particular customer and the contract value.

    Particularly in the Gulf these arangements are not optional, if your bid is to be even considered you will have to be committed to paying the scale comissions and have given the required entertainment. So every winner of big contracts will have done the same, so if BAe is guilty of a crime in this case so will by definition any other company who has sold any major contract in that area be it military or civil, hence my comment about this being a real hornets nest, if BAe gets bounced out of this contract the next potential winner will suffer the same at the hands of BAe and the other loser, it is a very high risk strategy, although in the past the Frogs seem to have managed to shrug off such 'scandals', but both Lockheed Martin and Boeing stand to lose much more than they may gain as being found guilty in such a case would I think invoke restrictions on their ability to operate contracts fr Uncle Sam.

  15. Not really a matter for concern… the USA sells it's best kit to the Israelis who promptly sell on that technology to the Chinese (and through them to the Russians). Patriot is just one of the systems the Israelis have sold on, hence the latest Chinese/Russian Patriotski missiles. There are plenty of other examples such as the Israeli Phalcon AWACS aircraft based on E2 Hawkeye technology.
  16. Now that of course is a far more interesting story, which Uncle Sam carefuly brushes under the carpet every time it come up. But yes it does happen and I have seen it with my own eyes in a very minor way. I was bidding on a job in Poland and it all went tits up after some Poles were caught selling tanks to either Iran or Iraq (during the Iran Iraq war so this was a complete No No) I was obliged to pull the UK based bid, and to my surprise so was my Frog competitor and the job went to an Israeli company selling what looked very much like a direct copy of US kit we knew had been sold to Israel.
  17. Bribery and corruption is an offence within the EU. How that works within Romanian (to name one) culture escapes me. To we "civilised" countries, bribery is immoral and unfair. In countries with a different idea of civilisation, though, things are different and they don't see things as bribery in the same we as we do. An Arab, Persian or Indian would see the exchange of gifts as part of the honourable way of conducting business. It's the way they conduct business and if we wish to trade with these people, we do it their way. If we apply our ideas of fairness to their ideas of trade, there will be no trade. They will still get what they need from places with ideas closer to their own.

    BAES is, no doubt, trying to trade with the alien civilisations on their "baksheesh" terms. It is probably legal but still offends the liberal and probably socialist chattering classes within our shores. There is the problem. We have people amongst us who hate foreign morality but hate the arms trade even more. They would, I suspect, gladly bankrupt and ridicule this Country and its arms industry in their moral crusade. Note that it is the Guardian and certain readers thereof that won't let this matter rest. Had the matter gone to Court, after the alleged evidence had eventually been brought together, I doubt it would have stood up. Even yer man Turner can't bluster and bulls**t that robustly.

    If these buggers want to do something really useful, ban all "bribery", gift exchanging, worldwide through the United Nations. Wait a minute, though, there goes the West, again, imposing its idea of Utopia on other Cultures. Cohesion anyone?
  18. POL

    I agree it is a difficult and often confused arena, and I have had some experience of it with a spell as the export manager for a company and much longer in sales and business development, much of it overseas.

    One of the big problems is where does legitimate commission for local agents spill over into corruption, and does a casual beer for some one in the 'Mad House' after work make him sell his soul to the contractor.

    I have known good agents who work for nothing for me for many years wating for the big one to come along which would pay all the bills, some times it did sometimes it didn't. I have worked with agents in places you would expect to be corrupt who were as far as I could see as straight as a die, and ones in places you would have thought were OK whom I would not trust at all.

    Many places the 'kick back is basically the same for all biddeers and in reality does not change the outcome, and is often pointless as the cash goes back into the pocket that it came out off in the first place, pointless in my view but thatis the way it works, in some places though the money is raked of for officials which on the face seems corrupt but is often known about and in fact is just the way they get paid. The nasty ones are those where you are approached and told if $X is paid to some one the order is yours, fortunately I was always able to walk away from deals like that, but I can see a company down on it's order book grab at something like that.

    Any way I dont do sales any more so don't have to worry about such high moral problems, but I am happy that when I did I was never knowingly involved in underhand dealing but it does go on.

Share This Page