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MoD and EADS bonded over satellites – but face bribery case

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MoD and EADS bonded over satellites – but face bribery case

Senior official at Ministry of Defence and EADS executive wrote of their special ‘trust’

By Frederika Whitehead and Mark Watts | 13 March 2013

Relations between the Ministry of Defence and a defence giant embroiled in bribery allegations have become close because of a programme to develop military satellites.

EADS, the European defence group, is helping to build Britain’s new generation of Skynet 5 satellites, just as it carries out a huge contract to overhaul military communications for Saudi Arabia’s national guard under the Sangcom project.

The leader at the MoD of the Skynet 5 programme, Simon Kershaw, and a senior EADS executive used an article in a specialist defence magazine to boast of the especially close relationship.

“The three parties have also begun swapping staff amongst each other”
– Simon Kershaw and Malcolm Peto, writing about MoD and two EADS companies

But the evidence of that intimate relationship between the ministry and EADS subsidiaries is increasing the pressure on the MoD over bribery claims surrounding the Saudi contract.

The article about the relationship was published in 2005 in Defence Management Journal, a magazine distributed four times a year to members of the armed forces, civil servants and executives in the industry.

Kershaw’s co-author was Malcolm Peto, who ran Paradigm, an EADS unit working on the Skynet5 programme. Peto had several executive positions in the EADS group, which included being a director of the subsidiary carrying out the Saudi contract, GPT Special Project Management.

Peto was identified as being one of the signatories who approved a series of payments as part of the Saudi contract to two mysterious offshore companies that did not appear to carry out any sub-contracting work.

The pair wrote that the key to the relationship between the MoD, EADS Astrium and Paradigm, was “trust”.

“It is this commodity that permeates every aspect of the relationship that has been established and fostered between the three parties,” they wrote.

“This triangulation of interests has resulted in a unique concept and approach that have been hailed as revolutionary by all three participants.”

“The three have termed their relationship, ‘the Enterprise’.”

They continued: “The Enterprise is where the issue of trust has its roots – and its raison d’être.”

“The three parties have also begun swapping staff amongst each other through secondments, thereby creating a pool of individuals who have genuine insights into what it is like to work for ‘the other side’. Again, it is all about trust.”

“Those involved were able to build a deep and lasting understanding of each other’s organisations: what made them tick and what was important.”

They even pointed to the ability of the partnership to raise revenue to help offset the costs of developing Britain’s military satellites.

Paradigm had committed to selling “spare capacity to other third parties”. They do not identify whether Saudi Arabia’s national guard is one of those parties, but wrote that the “third parties” are “from defence departments and ministries from friendly nations.

“Already, the company has secured orders to supply communications to Nato, valued at more than £90 million. This is in addition to supplying highly secure and reliable communications to five other nations.”

Peto has since left the EADS group, and resigned his GPT directorship on September 8, 2011.

Kershaw moved from the MoD to the EADS group in August of that year. He joined EADS Astrium and became a director of two of the group’s Paradigm companies. He also joined GPT’s board the day after Peto left.

Meanwhile, Exaro has uncovered how the MoD’s former Sangcom project director joined the EADS group – with responsibility for the same contract.

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Sarah Davies
Sarah Davieshttps://www.exaronews.com/
Exaro News investigates matters of public interest and seeks to uncover the truth.

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