Cast your mind back to the al-Yamamah arms deal signed in the 1980s. After the first of the two deals was signed, allegations surfaced that payments of around £600m had been made to members of the Saudi royal family and various middle men.
In the years that have followed various investigators have claimed that up to £6bn worth of ‘commission’ payments and entertainment slush fund spending were made as part of the £43bn deal. The payments were designed to ensure the Saudis purchased (mainly) British Aerospace aircraft and maintenance contracts. The Serious Fraud Office began an investigation and, only under political pressure, dropped it in 2006 to prevent the loss of yet another Saudi arms deal.
BAE Systems, as the company was later renamed, was also involved in another bribery scandal that saw Tanzania purchase a fast becoming obsolete £30m Watchman military air traffic control system that could only provide limited use for civil air traffic control needs – which is what was required to support more civil air traffic in support of the country’s growing tourism industry.
BAE had paid an ‘agent’ Shailesh Vithlani, BAE’s former marketing adviser in Dar es Salaam, around £7m to grease the wheels of the deal, which was funded by Tanzania through the use of aid money given for school education. The Serious Fraud Office became involved and BAE was fined half a million pounds and promised to pay Tanzania £30m for the benefit of its people.
There are many more cases, but these two give a flavour of the serious criminality of paying bribes to help deals go through. Now fast forward to this year and the story that India has passed over the ‘Eurofighter’ Typhoon fighter aircraft in favour of Dassault’s Rafale fighter.
In December last year, the Secretary of State for International Development, Andrew Mitchell, spoke about UK aid to India – which was coming under fire given that India has rapidly created more wealth than the UK, has a space programme, aircraft carriers and the aircraft to go on them and is actually an international aid donor itself – and was reported by the Independent in the following terms:
Asked about the strategic goals of Britain’s aid programme to India, Mr Mitchell yesterday referred to the proposed education scheme in Orissa, and added: “It’s about everything I have just mentioned. The focus… is also about seeking to sell Typhoon. The relationship is a relationship you have to take in the round.”
The Minister, after previously pushing the line that Indian defence spending was reducing and its people are in need of our money, had bluntly admitted the reality that the UK Government was sending British taxpayers’ money to India as part of an effort to secure the sale of 126 Typhoon fighter jets. It is effectively a £1.2bn bribe being paid over four years to sweeten an arms deal.
A significant aggravating factor in this aid-for-fighter jets effort is the news in the Sunday Telegraph that India’s Finance Minister, Pranab Mukherjee, and other Indian ministers tried to terminate Britain’s aid to the country last year, but relented after the British begged them to keep taking the money. It goes on to explain that officials at the Department for International Development (DfID) told the Indians that cancelling the programme would cause “grave political embarrassment” to Britain, according to sources in Delhi.
BAE Systems, and British Aerospace before it, has been investigated and prosecuted by the Serious Fraud Office for paying money to secure arms contracts. So why is the UK Government able to do exactly the same thing without sanction, pressuring India to take our money dressed up as aid at a time we have more than enough requirement for the cash and are still borrowing heavily? Surely we should be expecting the SFO to launch a prosecution against the government. If not then isn’t the government signalling to private companies that this behaviour is acceptable?