- By Region
Britain declared war on corrupt practices at home and abroad when it implemented far-reaching anti-bribery legislation last year. The emerging scandal over questionable payments in a security contract with Saudi Arabia will put the government’s resolve to its first big test. It cannot fail.
The events being investigated by the Serious Fraud Office will not fall under the new laws, as they are not retrospective. But the manner in which the criminal investigation is carried out – in particular the freedom that investigators will have to follow up on their findings – will send a strong signal to the defence industry and the wider international community. It will confirm whether attitudes have changed since 2006, when Tony Blair’s government cravenly quashed the inquiry into BAE’s alleged bribes of a Saudi prince in the Al-Yamamah arms deal.
Like Al-Yamamah, the deal with the Saudi Arabian National Guard is a government-to-government contract. This means that GPT, the company through which questionable payments were made, is merely the agent of the Ministry of Defence. It has emerged that ministry officials apparently raised concerns about these payments, but they continued for two more years. Whatever the potential embarrassment this inquiry may hold, it cannot be buried like Al-Yamamah before the truth is discovered. That episode dealt a severe blow to Britain’s standing, drawing international opprobrium.
An inquiry will raise a host of other uncomfortable issues. Britain’s defence industry is a big employer. Contracts are increasingly scarce as defence budgets are cut and Saudi Arabia is one of the few remaining big spenders. The kingdom is also an important partner in highly sensitive areas such as counter-terrorism and the Syrian crisis. Officials may balk at the idea of dragging it into a public investigation.
But these issues, sensitive though they are, should not impede a full and open inquiry. There is no defence for corruption, which penalises business, the economy and taxpayers of all countries. Nor is there any place for secret settlements with offenders. The public needs enough information to assess whether any sanctions imposed are appropriate and dissuasive to others.
The OECD this year recognised that Britain is making welcome progress in pursuing corruption cases. The MoD police have successfully concluded one involving a £16m CCTV contract. But the GPT investigation is about much more than one or two people on the make. It is about whether there is one law for petty bribery and another for the politically and economically complicated world of big defence. The choice is difficult. But Britain’s reputation may hang on it.