Letter from the Chair to the Secretary
of State for Defence, Ministry of Defence
You will recall that we had an exchange of correspondence
last year about allegations of bribery directed at the Defence
Export Services Organisation (DESO) and its predecessor, the Defence
Sales Organisation (DSO). You will also remember that the MoD
has supplied the Quadripartite Committee with memoranda in June
2003 and June 2006 refuting the allegations, both of which we
published. I am writing to seek your response to further allegations
which have appeared in the media in the past few days.
As I am sure you will appreciate, the Committee
takes allegations of bribery and the response of those to whom
the allegations are directed very seriously. When in 2003 and
2006 we received written evidence alleging that bribes had been
paid by the DSO to senior Saudi Arabian officials to obtain defence
contracts, we put the allegations to MoD and attached weight to
its responses. In particular, in the memorandum in June 2003 the
MoD stated it was a principle that: "Officials should not
engage in, or encourage, illegal or improper actions whether in
their relations with UK or overseas firms" and that the "MoD
no longer employs agents nor pays commissions in its Government-to-Government
defence export programmes".
We also asked the Government how the payment
of commissions and DESO's activities more generally had been affected
by the coming into force of Part 12 of the Anti-Terrorism, Crime
and Security Act and the MoD replied in the June 2003 memorandum:
"The Corruption Act of 1906 applied to
acts committed in the UK. This position changed with the implementation
of the Anti-Terrorism Crime and Security Act 2001 that provided
extraterritorial reach in respect of acts of bribery by UK citizens
overseas. It has, however, been the position for many years that,
even prior to the introduction of the power in the 2001 Act, UK
civil servants were already subject to extra territorial jurisdiction
for criminal offences if all the elements of the offence were
committed overseas. Section 31, sub-section (1) of the Criminal
Justice Act of 1948 provides that where any British subject employed
by HMG in the UK, when in a foreign country and acting in the
course of his employment, commits an offence which if committed
in England would be punishable on indictment, then that individual
shall be guilty of an offence and subject to the same punishment
as if that offence had been committed in England."
Following the announcement on 14 December 2006
of the decision to call off the Serious Fraud Office's investigation,
allegations have been made by the BBC and the Guardian that MoD
officials processed quarterly "invoices" from Prince
Bandar, who was, allegedly, seeking payment for "support
services" for his role in the al-Yamamah arms deal. It has
been alleged the officials involved in handling any such payments
were based at DESO and that BAE have said it made the payments
with the "express approval" of the MoD. ("MoD accused
over role in Bandar's £1bn: BBC says officials processed
payments Goldsmith refuses to answer questions", The Guardian,
12 June 2007, and Panorama: Princes, Planes and Pay-offs, BBC,
11 June 2007)
In the light of the statements that have been
made by the MoD in its memoranda the Committee would welcome a
further memorandum responding to these fresh allegations. We are
approaching the final stages of the preparation of our Report
and it would assist us if you were able to let us have the memorandum
by the end of June.
June 2007
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