Swiss widen corruption probe linked to BAE arms deal

10 July 2008

BERN – Swiss authorities have widened a corruption probe linked to arms deals by BAE Systems PLC, prosecutors said.

Federal prosecutors are conducting three criminal investigations into possible money laundering linked to the British aerospace company, spokeswoman Jeannette Balmer told The Associated Press late Wednesday.

Previously prosecutors had confirmed only one probe and Balmer declined to comment on what prompted Swiss authorities to open two additional investigations.

The investigations centre on allegations that BAE used Swiss bank accounts to pay millions of pounds in bribes to officials from Saudi Arabia in return for contracts.

An investigation by Britain’s Serious Fraud Office was halted in late 2006 after the Saudi Arabian government threatened to withhold cooperation on critical issues of anti-terrorism.

Britain’s House of Lords is currently considering whether the SFO was right to end its own probe after the High Court ruled in April that the move had been an "abject surrender" to "blatant threats."

Balmer said Swiss prosecutors were alerted to possible wrongdoing on BAE’s part by the Swiss money-laundering authority. She declined to say whether money linked to the probe has been frozen in Swiss accounts.

A British request for Swiss legal assistance in the case was put on hold in 2006 after the Serious Fraud Office called off its inquiry. The request has not been formally withdrawn.

Separate requests from the SFO for legal assistance into possible BAE bribes to Tanzania, Romania, Chile and the Czech Republic are still active, Balmer said.

Some of the requests have been decided upon but can still be appealed, she said, but declined to elaborate.

The United States has also expressed an interest in gaining insight into the Swiss bank accounts BAE allegedly used to run a 60 million pound "slush fund" offering sweeteners to Saudi officials in return for lucrative contracts as part of the Al-Yamamah – or "dove" -arms deal in the 1980s. BAE has always said it acted lawfully.

The U.S. request in 2007 has not yet been acted upon because it was not specific enough, said Rudolf Wyss, deputy director of the Swiss justice ministry.

Washington has not been in touch about the matter since, he said.

[AP / Expatica]