The decision of the Serious Fraud Office to recommend prosecution of BAE Systems is to be welcomed. Britain’s record in implementing the international convention that makes it illegal to offer a bribe to a public official abroad has been very weak. And I know from my involvement as international development secretary in one of the four cases where the SFO is recommending prosecution, the sale of an air traffic control system to Tanzania, that the record of BAE looks very grubby indeed.
I bumped into this saga in 2000 when we were proposing a big increase in aid to Tanzania in order to help fund universal, free primary education. One of the Department for International Development officials then informed me that an old proposal for the sale of a military air traffic control system, which had been blocked many years earlier, had re-emerged. The old proposal had been divided by BAE into two phases in order to make it appear cheaper.
My problem was that the increased aid would end up paying the BAE bill. Tanzania had recently received debt relief and one of the conditions was that it would not borrow money except on concessional terms such as those available from the development banks. Yet this project was to be funded by a loan from Barclays bank, which claimed to be concessional. Since Barclays is a commercial company, it did not seem credible that they would offer loans below market prices. The suspicion was that they had simply inflated the price and then pretended the loan was concessional.
The local representative of the World Bank therefore asked the International Civil Aviation Organisation to report on the project. The report said that the system was very old technology and was military, not civil. Tanzania had no use for such a system. It did need better civil air traffic control to improve tourism. A loan was available from the European Investment Bank to install a state-of-the-art system for Tanzania and its two neighbours that cost less than half the BAE system.
At that stage, there was no evidence of bribery but it seemed obvious to me that such a lousy deal could only be explained by corruption. Later, the Guardian exposed evidence of the bribe.
I did all I could to get the government to refuse an export licence. New Labour came to power on a commitment to tighten up on arms sales. Robin Cook had therefore negotiated an EU-wide deal that banned the sale of equipment that threatened aggression, repression or sustainable development. Clearly, this proposal threatened the development of Tanzania, which is one of the poorest countries in the world. My case was strong, but Tony Blair supported BAE, as always, and other ministers would not stand up to him. To our shame, the export licence was granted.
The evidence in this case must be aired in court. BAE must be prosecuted and then an inquiry held to ensure that no future British government supports dirty deals of the type that I am convinced this was.
