Judge criticises 'hastily drafted' BAE plea deal

SFO corruption investigation concludes with £500,000 fine

A judge yesterday attacked the plea bargain between BAE Systems and the Serious Fraud Office (SFO), concluding a six-year corruption investigation, as "loosely and perhaps hastily drafted".

Handing down a £500,000 fine and £225,000 in costs, Mr Justice Bean told Southwark Crown Court he was "surprised" the prosecutor had given BAE indemnity for all past offences, disclosed or otherwise, as part of the deal.

The fine concludes an inquiry into payments of £8m to businessman Shailesh Vithlani in the run-up to a £28m military radar contract for Tanzania. It will be paid out of the £30m compensation fund for the Tanzanian people, agreed as part of a US-style plea bargain between BAE Systems and the SFO.

The Tanzanian investigation was just one part of a multi-year, multi-jurisdiction investigation covering the company's activities in South Africa, Saudi Arabia, Tanzania and Eastern Europe. And the plea bargain was one element of a global settlement agreed last February, under which the company paid $400m (£259m) to the US Department of Justice over arms sales to Saudi Arabia in the 1980s and 1990s.

Passing sentence yesterday, Mr Justice Bean said he had kept the fine to a minimum to ensure as much money as possible made it through to the Tanzanian people. "The structure of this settlement agreement places moral pressure on the court to keep the fine to a minimum so that the reparation is kept at a maximum," he said.

Although the case was part of a global corruption investigation, the charges brought by the SFO – and agreed by BAE – specified only accounting irregularities in respect of the payments to Mr Vithlani. BAE denies corruption.

On hearing the case on Monday, Mr Justice Bean said the "obvious inference" was that at least part of the money paid by to Mr Vithlani was "used to bribe decision makers".

Under current legislation covering "extra-territorial bribery", a charge of corporate corruption requires the prosecution to prove beyond reasonable doubt that there was a "controlling mind" – namely that a member of the board was aware of and complicit in the corruption. In practice, it is almost impossible to secure a conviction, not least because of the difficulty of collecting evidence in countries whose politicians might themselves be implicated in a guilty verdict. In order to maximise its chances of success, the SFO instead offers the company a bargain, under which the group admits a lesser charge of financial irregularity, while agreeing to pay compensation.

Gavin Cunningham, a director at BTG Global Risk Partners, said the plea bargain had allowed BAE to "get off lightly", given the scale of UK and US investigations. "The common sense view is that the charges did not reflect the underlying allegations of corruption," he said.

But the law is about to change. Under a new Bribery Act, which comes into force in April, the prosecution will have to show only that bribery took place, against which it will be up to the company to prove that it has adequate measures in place to prevent corruption.

Neill Blundell, the head of fraud at Eversheds law firm, said: "There is about to be a fundamental change in the law, which moves the onus of proof on to the company and makes it much, much easier to secure a prosecution."

Welcoming the conclusion of the Tanzanian investigation yesterday, SFO director Richard Alderman said: "I am delighted that the judge stressed the seriousness of BAE's actions and that he recognised that the true victims were the people of Tanzania."

BAE Systems said the judgment "draws a line under a historical matter", and stressed that the company has "systematically enhanced its compliance policies" since the Tanzanian radar deal was concluded in 1999.

News
people
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film Ridley Scott reveals truth behind casting decisions of Exodus
News
people
Sport
footballArsenal 2 Borussia Dortmund 0: And they can still top the group
PROMOTED VIDEO
Arts and Entertainment
An unseen image of Kurt Cobain at home featured in the film 'Kurt Cobain: Montage of Heck'
filmThe singers widow and former bandmates have approved project
News
Andy Murray with his girlfriend of nine years, Kim Sears who he has got engaged to
peopleWimbledon champion announces engagement to girlfriend Kim Sears
Arts and Entertainment
Jake Quickenden and Edwina Currie are joining the I'm A Celebrity...Get Me Out Of Here! camp
tv
Arts and Entertainment
George Mpanga has been shortlisted for the Critics’ Choice prize
music
News
Albert Camus (left) and Jean-Paul Sartre fell out in 1952 and did not speak again before Camus’s death
people
Arts and Entertainment
Roisin, James and Sanjay in the boardroom
tvReview: This week's failing project manager had to go
News
ebooksNow available in paperback
News
Ed Miliband visiting the Holocaust museum in Jerusalem. The Labour leader has spoken more openly of his heritage recently
newsAttacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But are the barbs more sinister?
Arts and Entertainment
'Felfie' (2014) by Alison Jackson
photographyNew exhibition shows how female creatives are changing the way women are portrayed in advertising
News
i100
Life and Style
Fright night: the board game dates back to at least 1890
life
Environment
The vaquita is being killed by fishermen trying to catch the totoaba fish, which is prized in China
environmentJust 97 of the 'world's cutest' sea mammals remain
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Langley James : IT Support; Helpdesk, VMware; Manchester, £18k

£16000 - £18000 per annum: Langley James : IT Support; Helpdesk, VMware; Manch...

h2 Recruit Ltd: Business Development Manager - HRO - £70k+ ote

£35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...

Citifocus Ltd: Newly Qualified Accountants - Risk Mgmt

£Attractive Package: Citifocus Ltd: Prestigious financial institution seeks to...

Citifocus Ltd: Operational Risk Analyst

£Negotiable: Citifocus Ltd: Experienced operational risk professional with ban...

Day In a Page

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
The King's School is way ahead of the pack when it comes to using the latest classroom technology

Staying connected: The King's School

The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

Arsenal vs Borussia Dortmund

The Ox celebrates century with trademark display of speed and intuition
Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

When two worlds collide

Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?