U.K., U.S. Seek To Resolve BAE Tornado Probe

U.K., U.S. Seek To Resolve BAE Tornado Probe (NSI News Source Info) LONDON - September 4, 2008: British and American officials are attempting to negotiate a settlement to end a U.S. Justice Department corruption investigation into BAE Systems' sale of Tornado jet fighters to Saudi Arabia in the 1980s. U.S. congressional approval of U.S. components that would be fitted to Eurofighter jets the British government has sold to Saudi Arabia is on hold because of the investigation. U.S. officials have been in London this week, although who exactly is involved in the talks remains unclear. The Justice Department has accused the British defense giant of violating U.S. laws by passing bribes to Saudi officials through an American bank. Sources say the two allies are working on how they can close the affair with a negotiated settlement. U.K. officials want to put the issue to rest, but not at the expense of admitting to wrongdoing. U.S. officials maintain that if U.S. laws were broken, violators should be held accountable. One option the officials may be looking at is to have the issue resolved as a civil rather than as a criminal case. That would significantly reduce any potential damage to BAE or the British government. The Justice Department investigation followed a long-running British Serious Fraud Office (SFO) inquiry into allegations of Saudi corruption against Europe's leading defense company. The SFO investigation was eventually blocked by the British government in the face of Saudi threats that the inquiry would damage relations between the two countries. A spokesman for BAE said it was "inappropriate to say anything. It's a matter for the Justice Department." Justice Department officials declined to comment. The Foreign and Commonwealth Office was unable to respond in time. At one point earlier this year, then-BAE CEO Mike Turner and another top executive of the British company were detained by Justice Department officials as they entered the United States. The executives had their computers and mobiles phones examined. Five executives in the United States and the United Kingdom were subpoenaed to appear before a grand jury in July. Turner retired at the end of August to be replaced as CEO by Chief Operating Officer Ian King. The British government and BAE have consistently denied wrongdoing, but the company worries that a prolonged Justice Department investigation would derail its global prospects. For example, U.S. congressional approval of U.S. components that would be fitted to Eurofighter jets the British government has sold to Saudi Arabia in a multibillion-pound deal is on hold because of the investigation. In February, the chairman and ranking member of the U.S. Senate Foreign Relations Committee, Sens. Joseph Biden, R-Del., and Richard Lugar, R-Ind., sent a letter to U.S. Attorney General Michael Mukasey that didn't object to the retransfer, and asked whether doing so would either impede Justice's investigation or future prosecution of BAE. The State Department is expected to formally notify the Foreign Relations Committee of its intention to approve the sale of the Eurofighter to Saudi later this month. Eurofighter contains more than 2,000 components supplied by US companies.