High Court halts BAE settlement in UK

3 March 2010

3 March 2010 | Jake Kanter

The High Court has agreed to an injunction preventing the Serious Fraud Office (SFO) from finalising its investigation into corruption allegations at BAE Systems.

Social justice groups the Corner House and Campaign Against Arms Trade (CAAT) called for the injunction because they believe the settlement reached between the SFO and BAE is not severe enough.

The defence supplier has agreed to plead guilty in the UK to one charge of failing to keep reasonable accounting records in relation to payments made to a former marketing adviser in Tanzania. It agreed to pay £30 million to the SFO to settle this claim.

But Corner House and CAAT want a judicial review - for a judge to assess the lawfulness of the SFO settlement - because they believe it fails to reflect the seriousness and extent of BAE's alleged corruption and does not provide the court with adequate sentencing powers.

The High Court has until 20 March to decide whether to give permission to Corner House and CAAT to proceed with the judicial review. During this time, the SFO cannot conclude its investigations.

CAAT spokesperson Kaye Stearman said: “The plea bargain in no way reflects the very serious allegations of bribery and corruption against BAE, limited as it is to minor book keeping offences in one country.”

Earlier this week BAE pleaded guilty to one charge of conspiring to make false statements to the US government about its compliance with the Foreign Corrupt Practices Act. The company will pay the Department of Justice a $400 million (£257 million) criminal fine, one of the largest overseas corruption penalties in history.

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