British Defense Contractor BAE Faces Prosecution Over Bribery Allegations
Oct 5th, 2009 • Posted in: News The latest incident is likely to hurt the company’s bottom line, says analyst cited by Reuters
LONDON
Britain’s Serious Fraud Office last week said it plans to prosecute BAE systems, Europe’s largest weapons manufacturer, on charges that it paid millions of dollars in bribes to secure contracts in Africa and Eastern Europe.
BAE consistently has denied all allegations of wrongdoing, according to TIME magazine.
This latest investigation follows a highly visible and controversial probe that was dropped in late 2006, MarketWatch reports. The previous unrelated case involved arms sales to Saudi Arabia and allegations that those sales were greased by bribes to Saudi officials.
That probe was abandoned after the government intervened, saying it could hurt national security and damage the British economy, according to the Times of London.
An analysis from Reuters notes that the pending prosecution may spell trouble for BAE’s dealings in the United States, where defense contractors are fighting harder for shares of a shrinking Pentagon budget.
Reuters quoted Lexington Institute defense analyst Loren Thompson: “The corruption charges will be a drag on BAE’s business at a time when it is facing a downturn in its considerable North American revenues.”
While BAE had enjoyed good relations with the Pentagon, Thompson warned that “the federal government does not go easy on companies that are under a cloud of suspicion. The fact that BAE is a foreign company is not likely to help that situation.”
BAE declined comment to Reuters on the effect of the pending prosecution.
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