Bribery and corruption

Germs (and alcohol, and sitting in
smoky, loud bars and restaurants) have robbed me of my voice so I’m
going to have to use my blog to speak with. And what I really want to
talk about, is the recent halting of the SFO (Serious Fraud Office)
investigation into BAE Systems.

In short, the SFO have been
investigating BAE Systems (British Aerospace, as was) over an arms
deal, known as Al Yamamah, with Saudi Arabia in the 1980s (more
information on the deal – BAE’s version, and the
opposite view
. Interestingly, this is what Jonathan Aitken was
jailed over). At the time it was the biggest arms deal in the world,
and the contracts are still active. Way to go, you might say. What a
fillip for British industry. Except that it is alleged that BAE
bribed the Saudis by around £600 million to sign the deal.

At the time the deal was signed,
bribing foreign officials wasn’t actually illegal in the UK (that
only came about in 2002, after the OECD (Organisation for Economic
Co-operation and Development) started talking about economic
sanctions against us – we were in the same league for fighting
corruption as Turkey, Argentina and Brazil). It’s on the back of the
2002 legislation that the SFO decided to investigate Al Yamamah.
They’d gathered 20 boxes of evidence, but last week the investigation
got pulled.

Why? At this point it’s hard to say.
According to the Guardian,
Blair says he takes “full responsibility” for ending the enquiry,
aiming to prevent possible “ill-feeling” between the UK and the
Saudis. Theoretically, Saudi Arabia is our ally in the ‘war on
terror’ (ugh, I feel dirty just typing that phrase) but I have to say
I haven’t seen much help in attempting to track down bin Laden, one
of their own citizens (though I am prepared to be corrected). Lord
Goldsmith, our esteemed Attorney General, says the investigation was stopped either because of the lack of
evidence, or in the ‘national interest’ – jobs and business
protection – depending on what interview you read. I’m going to
come back to this line about the national interest, but here’s an
interesting fact from the OECD’s anti-bribery convention, which has
legal backing:
signatories promise that corruption investigations will not be
influenced by ‘considerations of national economic interest’, or ‘the
potential effect upon relations with another state’. So that’s
alright then.

So far, then, we have the UK government
ignoring its own, and international, law on bribery and corruption
and not even being able to get its story straight on why. We
shouldn’t even need to go into the murky world of morality here, so
many of the government’s own laws have been torn up and thrown in the
bin. So I won’t bother, and just stick to the economics. Cos when it
comes down to it, of course, the arms industry is a massive part of
the national economy and anything that interferes with it risks
bringing down thousands of jobs at the same time, right?

NU-UH. The Family Fortunes buzzer is
going, the QI alarm is ringing and the screens are flashing the words
‘national interest’ as the obvious, and wrong, answer. I’m going to
lift a page from Mark Thomas’s excellent book As Used on the
Famous Nelson Mandela
his book about the dodginess of the arms trade, which has already
provided me with some of the earlier factoids used above.

"An estimate of
£851.91 million is how much we subsidise arms exports in a
year. [Note: to see how they came up with that figure, read the book;
but the edited version is:

  • Export Credits
    Guarantee Department
    (ECGD) : £139.95
  • Defence
    Exports Services Organisation, a government agency working to
    promote arms sales abroad: £17 million
  • Defence
    Attachés: £4.26
  • Defence
    Assistance Fund: £4.7 million
  • Armed forces
    used to promote arms sales: £6 million estimated
  • Research and
    development: £483 million
  • Buying
    British: £200 million]

However, even as an
estimate, £851.91 million is a lot of money. Do you realise how
many doctors, nurses, teachers we could employ with that level of
money? No, neither do I, but I bet it would be loads and we’d
probably have enough money over to subsidise a bevy of buxom opera
singers to boot. The MoD estimate that there are between 60,000 and
65,000 people employed in arms exports, which works out at a subsidy
of £13.153.26 per job.

Arms companies,
like their political allies in the Cabinet, are exceptionally deft at
convincing us of the benefit they bring to Britain. The assertion
that arms exports are good for the British economy is a myth, no more
true than Saddam Hussein’s WMD stockpile in 2003 or Graham Norton’s
modesty. The arms industry is subsidised with our money."

The arms industry
gets taxpayer’s money to promote its wares overseas and for its own
R&D; taxpayer’s money underwrites deals that may not get paid
(the ECGD); we even provide the money when the government acts as a
guaranteed buyer. I can’t think of any other industry that gets this
much protection. When Rover went bust, I recall Blair refusing to
bail out Longbridge to save the jobs of the workers there despite
manufacturing being supposedly a backbone of our economy. To come
back to Mark Thomas, he has a theory why the arms industry – and
specifically BAE Systems, the daddy of them all – gets away with so
much shit.

government-to-government arms deal might involve the MoD, DTI, FCO,
security services, perhaps even the prime ministers of both countries
involved. Few other business transactions (outside oil and energy
[two other sectors that get away with more than the rest]) can claim
to involve that many players in a nation’s political elite. Arms
deals involve international movers and shakers. In terms of
influence, the British government believes the arms industry
allows them to punch above their weight on the international stag
[my italics]. America’s might and money mean they can claim to be the
world’s policeman. Britain cannot match that, but as the second
biggest global arms dealer we can at least claim to be the world’s
community support officer."

If I wanted to
simplify – and what the hell, why not – I could claim that BAE
just got away with massive corruption because the UK government likes
feeling important. That the UK just made itself a laughing stock
because the UK government wants to be the ‘big man’. And since
Blair’s directly involved… yeah, there’s probably some truth in
that. Perhaps fucking up relations with the Saudis isn’t such a
brilliant idea at a time when the Middle East is in a mess and
Blair’s out there playing his best diplomatic hand; but what kind of
credibility does it lend us in the rest of the world if we’re
publicly happy to sweep allegations of corruption under the carpet
(and some of this stuff is pretty well documented; for instance, lots
of BAE money mysteriously appearing in the bank accounts of a Qatar
official, at the same time as a deal was being negotiated with, oo
would you look at that, Qatar).

It makes me so
proud to be British.


2 responses to “Bribery and corruption

  1. Will December 20, 2006 at 8:11 pm

    Right, before you go all ‘Will loves the arms trade and likes to sell landmines to children’ I’ll say I don’t like it.
    However, looking at it economically, UK arms exports are worth around £5bn a year. So a subsidy of £900m isn’t that bad is it? By the way, it’s the most subsidised industry in the UK apart from agriculture.
    Mark Thomas just bugs me because he’s so one-sided and has basically been banging on about the same stuff for ever. ‘ECGD, blah blah blah, etc.’.
    But UK military spending is about £25bn a year. We could slash that and give the cash to impoverished nations then maybe they wouldn’t hate us so much!

  2. Rachel December 20, 2006 at 10:31 pm

    Agriculture doesn’t manage to persuade governments to break their own and international codes and laws, though, does it? The subsidy would stick in my throat far less if the industry wasn’t then chucking money into people’s back pockets.
    Oh, and providing the means for killing people, of course.
    I suspect Mark Thomas has been banging about stuff like the ECGD for ages cos it’s all bad and nothing’s been done about it… I didn’t put this in my actual post cos it’s from Wikipedia and so not exactly trustworthy… plus it would have been another Guardian citation and, you know. *shrugs* But apparently the ECGD underwrote BAE to the tune of £1 billion. If the arms industry is so buoyant and healthy, let it survive on its own in the free market without massive subsidy, bungs or government intervention.

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