Serious Fraud Office makes right call over BAE's plea bargain in Tanzania radar probe

Wednesday, 22 December 2010

No doubt groups such as the Campaign Against Arms Trade and The Corner House will be disappointed by yesterday's sentencing of BAE for offences connected to its sale of a radar system to Tanzania more than 10 years ago. They had called on Mr Justice Bean to reject the plea bargain BAE had agreed with the Serious Fraud Office (SFO) on the affair, which specifically clears the defence company of allegations of corruption. That he did not do so, instead fining BAE £500,000 for accounting failures, will have upset anti-corruption campaigners.

The difficulty, however, is that while even the judge raised concerns about the fishy payments BAE accepts it made to a middleman in the Tanzania deal, there was no evidence with which to build a case against the company for more serious offences. The question for the SFO, then, was whether to risk looking supine by charging BAE with what was a minor offence in the context of what appears to everyone else to have been a much bigger stink.

In many ways, it is to the SFO's credit that it accepted the risk of losing face. Campaigners against corruption may not like the plea-bargain system, but in this case it has at least enabled prosecutors to secure a conviction against BAE - as well as £30m of compensation for the people of Tanzania.

Why couldn't the SFO build a more serious case? The answer lies in the corruption laws in place at the time of the Tanzania deal. To accuse BAE of corruption, the SFO would have to have been able to show that someone very senior at the company had been closely involved with the affair. It had no evidence to prove that this was the case.