[Mirror, mirror on the wall. Who's the biggest protection racket of them all?]
You can read the docs at: http://politics.guardian.co.uk/foi/images/0,9069,1416953,00.html http://politics.guardian.co.uk/foi/story/0,9061,1417261,00.html Papers show government authorised arms bribes Rob Evans and David Leigh Friday February 18, 2005 Guardian Papers released under freedom of information laws reveal with startling frankness how the British government secretly authorised bribery on arms sales. Many of the documents released early by the National Archives date from the days of the last Labour government under James Callaghan in the late 1970s, when a series of scandals led the US to outlaw overseas bribery. But Britain refused to follow suit. Critics say the government continued to turn a Nelsonian blind eye until 2002, when such bribery was eventually criminalised. Britain has still not prosecuted a single company for this offence. The newly discovered papers reveal that when an army chief in London was asked by Britain's ambassador in Venezuela whether the government was prepared to countenance bribery, he replied in a despatch marked "secret" and considered so sensitive that only five numbered copies were made: "I am completely mystified by just what your problem is ... People who deal with the arms trade, even if they are sitting in a government office ... day by day carry out transactions knowing that at some point bribery is involved. "Obviously I and my colleagues in this office do not ourselves engage in it, but we believe that various people who are somewhere along the train of our transactions do. They do not tell us what they are doing and we do not inquire. We are interested in the end result." The author of another confidential minute from the Department of Trade and Industry, quoted Bernard Shaw's Pygmalion to make his point: "Have you no morals, man? Can't afford them, governor." The files reveal that parliament has been systematically misled over government involvement in bribery, which stretched across the world, from Venezuela to Saudi Arabia to Indonesia and has involved "commissions" of up to 100% on the contract price. The first hard evidence of bribes by major British companies has been concealed in government files for years. Nicholas Gilby, a researcher for the Campaign Against the Arms Trade, who unearthed the documents, said: "For decades, the government has known the arms trade is riddled with corruption, yet it has lavished support on the industry. Ordinary people in countries like Indonesia not only get British weapons turned against them, but also end up financing bribes through their taxes." Although there were still strict controls on currency taken out of the country, arms firms were allowed to transfer each "special commission" into Swiss bank accounts. The bribes were also tax deductible. The National Audit Office queried government involvement in secret payments to Saudi Arabia in 1977, saying: "Their unusual nature and large magnitude are such that parliament would now expect them to receive very special scrutiny and to be informed of the situation." The weapons sold by the British Aircraft Corporation, the forerunner to BAE Systems, to Saudi Arabia involved payments to "consultants", the NAO found, of more than �30m, the equivalent of �100m today. The UK government gave BAC the cash to disburse under special conditions of secrecy, from funds received from the Saudi government, who thus paid over the odds to purchase their warplanes. The Ministry of Defence fended off the auditors, saying officials did not want to know the identity of the those who received millions in secret cash. "It is accepted government practice to avoid over extensive inquiries," wrote the then permanent secretary, Sir Frank Cooper. "We must have regard for the risk of unnecessary interference ..." All he agreed to do was issue a formal directive to civil servants, stressing that agents were employed by the private firms not the government, and requiring the firms to state formally that they were not engaged in any improper acts. This procedure is still in force today. Earlier this year, the trade secretary, Patricia Hewitt, ran into controversy when she abandoned attempts to force BAE and other firms to identify the recipients of secret commissions. The companies want the government simply to accept declarations that they have not broken the law.
