Top BAE executives detained in Texas

Top BAE executives detained in Texas

By Sylvia Pfeifer in London and Stephanie Kirchgaessner in Washington

Published: May 18 2008 16:18 | Last updated: May 18 2008 16:18

Mike Turner, the chief executive of BAE Systems, and Sir Nigel Rudd, a non-executive director, were detained last week by US authorities investigating bribery allegations.

The two, who are among the UK’s most senior businessmen, were issued with subpoenas by officials from the Department of Justice as they landed at Houston airport last Monday. They were kept for about half an hour and had their documents, as well as personal electronic equipment, examined.

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BAE chief subpoenaed in U.S.
By Jim Wolf Reuters - Monday, May 19 01:50 am

WASHINGTON (Reuters) - U.S. officials investigating alleged bribes in a Saudi arms deal subpoenaed the chief executive of BAE Systems, Britain's biggest military contractor, on his arrival in the United States last week, BAE officials said on Sunday.

A subpoena was served on Mike Turner, the CEO, at George Bush International Airport in Houston, Texas, on May 12, said Greg Caires, a BAE spokesman in Washington.

Also subpoenaed was a BAE non-executive director, Sir Nigel Rudd, who was travelling with Turner, Caires said.

A subpoena is a court order to give testimony. The summonses were part of a U.S. Justice Department investigation of bribery charges tied to Britain's biggest arms deal, a series of warplane sales to Saudi Arabia clinched in the mid-1980s and valued at up to $80 billion (41 billion pounds).

The government's Serious Fraud Office dropped an inquiry into the deal in December 2006 after then-Prime Minister Tony Blair said the probe threatened national security.

In June 2007, the company said it had been notified the U.S. Justice Department had begun investigating BAE's compliance with anti-bribery laws, including dealings with Saudi Arabia.

An unspecified number of subpoenas also were served on BAE Systems' employees in the United States last week, BAE said.

"The company has been and continues to be in discussion with the DoJ (U.S. Department of Justice) concerning the subpoenas served in the course of its investigation," Caires said.

BAE has denied making wrongful payments to help secure the arms deal known as al-Yamamah, or "the Dove."

The U.S. Justice Department had no comment, said Laura Sweeney, a department spokeswoman.

Caires said he could not confirm or deny British media reports that personal electronic devices belonging to Turner and Rudd, including laptops, had been seized and examined before they were allowed to continue their trip.

The pair were not prevented from entering the United States and Turner has since returned to Britain, John Neilson, a BAE spokesman told Reuters in London.

A BAE shareholder has charged past and present BAE board members breached their duties by allegedly allowing more than $2 billion in kickbacks, illegal bribes and other payments to Prince Bandar bin Sultan and others.

Bandar, the former ambassador to the United States who is now the head of Saudi Arabia's national security council, has strongly denied the charges, as has BAE.

The lawsuit was brought by the Michigan city of Harper Woods' employee pension fund. It is before a U.S. federal judge in Washington, Rosemary Collyer, who earlier this year temporarily barred Bandar from removing real estate proceeds from the United States.

BAE won a 4.43 billion pounds deal for 72 Eurofighter Typhoon combat jets from Saudi Arabia last September, nine months after Britain's Serious Fraud Office ended its inquiry.

Bribery could violate both the U.S. Foreign Corrupt Practices Act and the Racketeer Influenced Corrupt Organizations Act if found to have deprived the government of tax revenue, said Selva Ozelli, an international tax attorney and certified public accountant in New York.

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UK to clamp down on illegal arms trade

By Michael Peel,Legal Correspondent

Published: May 18 2008 23:13 | Last updated: May 18 2008 23:13

Prosecutions of companies and executives for breaking military equipment export rules have risen sharply in a clampdown that lawyers say is likely to widen further.

Revenue and Customs officials have launched 10 successful prosecutions over the past three years – compared with only one in the previous two – as new laws have taken effect and campaigners have pressed for action.