Leading article: Prosecuting bribery is in Britain's national interest

The Serious Fraud Office is right to keep the pressure on BAE Systems
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The Independent Online

Could the stables finally get a public cleaning? The Serious Fraud Office has asked the Attorney General to prosecute BAE Systems, Britain's biggest manufacturer, for bribing officials from several African and eastern European nations in order to win contracts.

Let us be clear. It is BAE's intransigence that has brought it to this pass. BAE admitted last year that its international business dealings in the 1980s and 1990s fell short of ethical standards. And the SFO was prepared to accept a bargain in which BAE accepted a hefty fine and made a public admission of wrongdoing. But BAE baulked at these terms on the grounds that they might jeopardise its future ability to win business. The company's first priority, it says, must be to its shareholders.

So this has become a battle between a giant corporate interest and the authority of the law. It is a struggle in which the law must prevail - and be seen to prevail. This is all the more vital after the investigation into BAE's dealings with Saudi Arabia was quashed three years ago because of political pressure. To shelve one investigation into corruption was bad enough. To shelve two would be disastrous.

For BAE to escape without serious consequence for its corrupt behaviour would send a dangerous signal to the world about British attitudes to bribery. Of course, international trade, like diplomacy, often requires governments and firms to hold their nose. There are times when it is necessary to deal with unsavoury regimes. Yet if we stretch our definition of "doing business" to include paying bribes we cross a fatal line.

Some argue that since BAE is a significant employer in Britain we should tread carefully. They point out that other national military manufacturers, which are prepared to pay bribes, would gladly scoop up any business we forgo. It is not in Britain's national interest, they say, to take a strong line on corruption.

The problem with this is that it reflects a hopelessly narrow view of British national interests. Our future prosperity will depend, to a large degree, on free trade between free and economically developing nations. Yet there are few greater impediments to freedom and growth around the world than rapacious and corrupt governments. Rich Western nations, including Britain, criticise regimes in Africa and elsewhere for their embezzlement and graft. But what moral authority do we have to do so if we send our businesses over to these nations laden with bribes? What moral authority can we claim if we ignore our own domestic laws banning companies from bribing foreign officials? In short, how can we hope to eradicate wealth-destroying corruption if we connive in it? Bribery is, in the end, bad for business.

As the former Lord Chief Justice Lord Woolf put it in an ethics report commissioned by BAE itself last year: "There are contracts that are not worth having and will do long-term damage to the company." Paying bribes and arming corrupt regimes is bad for the populations of those countries that receive the bribes, bad for Britain's international reputation, and, ultimately, bad for the businesses that pay them.

BAE maintains that it has changed its ways. Yet the firm refuses to make a meaningful admission of guilt. Until that is forthcoming, it needs to be subject to the full force of the criminal justice system.