July 22, 2024

Britain Investigates Bribery Charges Against EADS Unit in Saudi Deal

LONDON — Britain’s Serious Fraud Office is looking into allegations that a unit of European Aeronautic Defense Space bribed Saudi Arabian officials to win a multi-billion dollar contract, a person with direct knowledge of the investigation said on Tuesday.

The fraud office, which investigates complex instances of corruption, is seeking more information about allegations that the EADS unit handed out cars, jewelry and cash to win a £2 billion, or $3.3 billion, contract for upgrading the satellite systems of the Saudi National Guard, said the person, who declined to be identified because the investigation is at an early stage.

The allegations were made by Lieutenant Colonel Ian Foxley, a former employee of GPT Special Project Management, which won the contract, the Daily Telegraph newspaper reported. GPT, based in Riyadh, is owned by a British company, Paradigm Services, which in turn is owned by EADS, one of Europe’s largest defense contractors and the parent company of Airbus as well.

“Certain allegations have been made and these are being properly investigated,” Alexander Reinhardt, an EADS spokesman, said.

Sam Jaffa, a spokesman for the fraud office, declined to comment. Mr. Foxley could not be reached for comment. There was no answer at the press office at the Saudi Embassy in London.

The allegations come more than a year after BAE Systems, Europe’s largest military contractor and an EADS rival, agreed to pay almost $450 million in penalties in the United States and Britain to settle investigations into possible bribes to win contracts. The investigations, which had dragged on for years, focused on arms deals in Saudi Arabia, the Czech Republic and Hungary. Before pleading guilty as part of the settlement, BAE Systems had repeatedly denied any wrongdoing.

The initial investigation by the Serious Fraud Office into the dealings of BAE Systems had caused diplomatic problems between Saudi Arabia and Britain. The British government, then led by Prime Minister Tony Blair, pressured the fraud office into halting the investigation in 2006, arguing that it would damage Britain’s intelligence cooperation with Saudi Arabia in the struggle against Al Qaeda.

The halting of the investigation was challenged in court by two activist groups. The High Court in Britain ruled in 2008 that dropping the inquiry was unlawful.

Britain is currently working on a review of its bribery bill that is expected to go into effect this summer. The small changes were supposed to clarify what companies are and are not allowed to do to win business. But some lawyers argued the rules are too unclear on which foreign companies would be subject to the laws.

Nicola Clark contributed reporting from Paris.

Article source: http://feeds.nytimes.com/click.phdo?i=9ae3f31bd65b2f67cf5b68ffd934864a

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