Put UK defence contractor in dock to face bribery charges, demands Malcolm Bruce

By Frederika Whitehead | 18 July 2012

MPs turn up heat on ministers over ‘bribery’ in UK-Saudi dealMPs are increasing the pressure on ministers over claims of bribery in a UK contract to overhaul Saudi military communications.

A Liberal Democrat MP charged with scrutinising UK arms sales, Malcolm Bruce, believes that a British company at the centre of the huge deal with Saudi Arabia should be brought before the courts. “It is time for a pretty stiff warning,” he said.

A Conservative colleague is questioning whether the UK should be selling defence equipment to “authoritarian regimes” such as Saudi Arabia.

And a Labour MP has put down written parliamentary questions to the defence secretary, Philip Hammond, over corruption allegations surrounding the Sangcom project, a huge government-to-government contract to renew the Saudi national guard’s communications systems.

The parliamentary reaction comes after a series of revelations by Exaro surrounding the programme. Exaro revealed details of transfers totalling just over £14.5 million linked to the contract and paid to two mysterious companies in the Cayman Islands between 2007 and 2010.

Just under £14.4 million went to Simec International, and £141,000 to Duranton International.

A financial officer first blew the whistle within GPT Special Project Management, the current prime contractor on the Sangcom project, by drawing up a schedule of the mysterious payments. GPT is a subsidiary of EADS, the European defence giant.

Bruce, a member of the House of Commons arms export controls committee, believes that there is a case for GPT to answer in a court of law. The MP, who is also chairman of the international development committee, told Exaro: “Given that this information has come out, it is time for a pretty stiff warning that the culture has changed and the law has changed, and if people disregard that they can finish up behind bars.”

The Bribery Act 2010, which came into force a year ago, was aimed at making it easier to prosecute cases of corruption.

GPT represents a big test for the Serious Fraud Office (SFO) after it was forced in 2006 by Tony Blair’s government to close an investigation into the UK-Saudi ‘Al Yamamah’ defence deal.

Bruce said: “I do not think that you could easily stop a prosecution under the current legislation compared to the past.”

David Green, who became SFO director in April, has promised to “re-charge” the agency’s “self-respect” by adopting a tougher approach on corporate prosecutions.

The SFO started a preliminary investigation into the GPT case last year, but it refuses to comment on progress.

But MPs are worried that the SFO is slow to act. If it shies away from a full investigation this time, Bruce said, the arms export controls committee may have to consider whether the SFO was being “dilatory”.

Defence companies, he said, “must be made aware that the law has changed, and anybody who tries anything like this again should expect to end up behind bars.”

His comments came as the government agreed that anti-corruption provisions should be incorporated into the international arms-trade treaty that is being negotiated at the United Nations in New York.

Sir John Stanley, the Conservative MP who chairs the arms export controls committee, has also expressed concern about Britain’s defence sales to Saudi Arabia.

In a report by the committee last week on UK defence sales, he called on the government to make “significantly more cautious judgements on the export of arms to authoritarian regimes” that might be used for “internal repression”.

He asked why the government had not revoked any arms export licences to Saudi Arabia after it sent its national guard to help crush an uprising in Bahrain.

Meanwhile, Labour’s Stephen Pound has become the fifth MP to put down parliamentary questions about the GPT case.

He is asking what “due diligence” the Ministry of Defence (MoD) undertook on the project, and what procedures it has “to detect bribery and other impropriety in contracts” that it supervises in Saudi Arabia.

Pound also asks whether the MoD “recorded any payments made to Simec International and Duranton International” and if so, what action it took.

A spokesman for EADS said that its position remained the same on the issue: “Certain allegations have been made, and these are being properly addressed with our full and constructive engagement.”

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