Friday, 28 September 2007

BAE faces US lawsuit over Saudi allegations

BAE faces US lawsuit over Saudi allegations
By Stephen Foley in New York
Published: 21 September 2007
The storm over alleged corruption at the British arms supplier BAE Systems took a new legal twist, as one of America's most aggressive law firms launched a lawsuit against executives of the company.

Mike Turner, chief executive, and the rest of the board are among the defendants in a legal action filed in Washington, along with Saudi Prince Bandar Bin Sultan, who is alleged to have received hundreds of millions of pounds in bribes as part of BAE Systems' agreement to supply military aircraft and other equipment to Saudi Arabia.

"Through a systematic abuse of national and international anti-corruption laws, coupled with a flagrant disregard of their fiduciary duties, BAE current and former executives have caused serious and lasting damage to the company and undermined its competitive position," said Patrick Daniels, an attorney at Coughlin Stoia Geller Rudman & Robbins, which has launched the lawsuit.

"BAE's reputation is in tatters and there are huge, and still unanswered, question marks over its corporate governance standards. Through this lawsuit, the directors and executives will be called to account and held personally liable for their actions." BAE has denied making any improper payments, and moved to shore up its reputation in June with the appointment of an independent ethics committee. Prince Bandar, too, has denied the allegations.

The Serious Fraud Office called off an investigation last year, citing national security concerns. BAE said it hadn't been given prior notice of the lawsuit and hasn't yet been served with the claim, but it "intends vigorously to defend any such proceedings".

The lawsuit accuses directors of "intentional, reckless and negligent breaches of their fiduciary duties of care, control, compliance and candour in relation to the company" and of repeatedly misrepresenting how they were running BAE.

The plaintiff in the case is the City of Harper Woods Employees' Retirement System, a public pension scheme in Michigan, which holds a small BAE shareholding.

Indonesia's Arms debts

Jubilee Scotland will be holding a vigil against Indonesian arms debts from 14th -19th October in Edinburgh outside St. Johns church on the corner of Princes St. and Lothian Rd. The vigil will take place between dawn and dusk and will include music, information and a chance to learn about the campaign to cancel Indonesia's arms debts.

On each day there will be a different focus and the vigil will culminate by delivering a petition gathered at the vigil to Alistair Darling's office.

On the 17th October (International day for the eradication of poverty) we invite you to take part in Stand Up Against Poverty as part of a global day of action against poverty

Please come and show your support


Pop along at lunch time, on your way to or from work, or to take a break from shopping. But do come and either take part in the vigil or just to see what we're up to!

Dates for your diary

Dates for your Diary

Thursday 04th October, there will be no meeting in the chaplaincy, because of 3 other interesting events happening

1 - Rabiya Kadeer, Chinese Human Rights Defender will be speaking in the Playfair Library. 7pm. More info at

2 - Green Councillor Alison Johnstone will be speaking at the Quaker meeting house on the subject of 'Green Schooling'. 7pm

3 - Human Rights activists will be gathering in St John's Church Hall, Princes Street, to discuss how to respond to the situation in Burma. 6pm.

Friday 05th October

Come to see John Peel favourites BALLBOY playing at the LOT, Grassmarket, a fundraiser for the Scottish Greens. Tickets from Word Power £5 or on door.

Thursday 11th October

Artistic Activism - Making cardboard weapons for Council Stunt. Helena's House, 3f2 52 Marchmont Crescent TBC!

Thursday 18th October. 7pm Potterow Chaplaincy.

Letter Writing to BAE Systems

Wednesday 24th October. 1330

Dr Thein Lwin a Burmese educationalist who will speak at the Scottish Parliament International Development Group in October. This is a public meeting on 24 October at 1330.

Saturday 03 November

After the Scottish Parliament has voted that they don't like Trident on principle, this is a public march to make them act on it. March and rally organised by Scotland's for Peace. 1130 Assemble Scottish Parliament; 1200 March off; 1300-1400 rally at Ross Bandstand, Princes Street. Speakers Patrick Harvie MSP (Green), Phil McGarry (STUC),Morag Mylne (Church of Scotland & Osama Saeed (MAB).

Thursday 15th November. 7pm. Potterow Chaplaincy.

Public Showing of Ethical Investment film as part of Edinburgh Charities Week 2007.

Human Rights in China, Saudi, and Edinburgh

It is a busy time for Human Rights activists.

Monks are on the march in Burma. Preparations continue for the Beijing olympics including the razing of housing, and not allowing Trade Unionised firms to build. Torture continues in Saudi Arabia. Tanzania and Indonesia are still crippled by debt from arms sales.

Meanwhile British companies continue to sell arms to China, and indirectly, to Burma (via India). An investigation in to BAE corruption in Saudi has been stopped by the Labour government because 'it would damage our relationship with the country (!)', British diplomats are trying to stifle a US fraud investigation in to BAE, and the British government refuses to drop debt from arms, despite pretending it has cancelled third world debt!

Locally, the Edinburgh Council continues to profit from arms sales, thanks to an amendment by the Liberal Democrats and SNP.

There has never been a better time to get involved in Human Rights activism.

SNP Councillor: Pensions 'to make as much money as possible'

Many thanks for your e-mail. As I am sure you are aware, I voted for the Lib Dem/SNP amendment at the full council meeting last Thursday. While I commend the sentiment behind the Greens motion, we have to look practically at what can be done. The Pensions & Trusts Committee exists to make as much money as possible for pension holders and by investing only in ethical companies you would not necessarily represent the pension fund members. It was also pointed out at the council meeting that ethics is extremely subjective and that the council is required by statute to gain the best return for pensions fund members, not to invest in ethical companies. The validity of point 6 in the motion was also disputed as Cllr Chapman claimed she had been told by council officials that this was the case while other councillors had been given different information. There are a number of examples of councils (including Edinburgh) being taken to court under circumstances like these so while the sentiment should be applauded, it is not a viable way of changing anything. As a result of the above points I decided to vote for the amendment.

Councillor David Beckett (SNP)
Ward 11 - City Centre
Room 10/28
City Chambers
High Street
Phone - 0131 529 3271
Fax - 0131 529 4080

Sunday, 23 September 2007

Public Sector Union Supports call to end pensions investment in arms trade

Call to end pensions investment in arms trade

(19/06/07) UNISON's national conference opened this morning with a united call from delegates to end arms investments by local authority pension funds.

"The human cost of the arms trade is immense," said Manchester local government branch's Wendy Allison, "and the scale of pensions involvement in that trade is phenomenal.

"The money going into arms is shameful; it is disgusting."

Conference noted that a survey undertaken by Campaign Against Arms Trade in 2006 revealed that the 99 UK local authority pension funds invested at least £723 million in military-producing companies and weapons manufacturers.

There were compelling moral arguments against such investments, delegates agreed.

They noted that arms companies profit from exporting weapons to conflict zones including Iraq and Afghanistan, to areas of tension such as Pakistan, to human rights abusers such as China, and to countries like South Africa, with huge development needs, diverting resources from spending on health and education.

Furthermore, investments in the arms trade are incompatible with UNISON's aims and objectives, conference noted.

"By allowing our pension funds to invest in arms we are undermining all the good work done by the union," said Salford rep Matthew Egan. "We are shooting ourselves in the foot."

Young member Rebecca Taylor agreed: "Bullets and bombs shatter the lives of innocents around the world. "My pension investment in the arms trade makes me feel like I'm pulling the trigger."

One member nearing retirement age pointed out she didn't want to receive a pension that's contaminated by the blood of others. Though pension fund managers have a serious legal duty to be fiscally responsible, they also have a moral duty to act ethically, she said.

And Colm Magee from the NEC explained it is possible to take your duty to fund-holders seriously and make sound ethical decisions. The UNISON pension fund, of which he is a trustee, has introduced a policy to ensure the fund makes socially responsible investments, and screens out investments in the arms trade.

Conference also instructed the executive to ensure UNISON reps on local authority pension funds are trained in social, environmental and ethical investment.

A timeline of BAE Corruption

Timeline: BAE corruption probe

Arms deals with Saudi Arabia have been worth billions to the UK
The furore over the SFO's decision to drop a corruption probe into a £6bn arms deal with Saudi Arabia is the latest twist in a 20-year saga.

Defence Secretary Michael Heseltine signs the first phase of the Al Yamamah arms deal with the Saudi government.

The deal covers the supply and support of Tornado and Hawk jets and a massive airbase construction programme, and is estimated to be worth £50bn.

A further formal understanding concerning Al Yamamah is signed between the UK and Saudi Arabia.

Saudi Tornado jets fly alongside RAF Tornado bombers in the First Gulf War.

May 2004
The Guardian newspaper alleges that BAE Systems has won the deal with the aid of a secret slush fund.

It claims Ministry of Defence police are investigating payments totalling £60m made during the course of the Al Yamamah deal by BAE Systems.

November 2004
BAE Systems confirms it is being investigated by the Serious Fraud Office (SFO), but strenuously denies any wrongdoing.

December 2005
BAE Systems confirms it has agreed to supply Saudi Arabia with 72 Eurofighter jets.

Talks to finalise the deal continue throughout 2006.

1 December 2006
French planemaker Dassault confirms it is in talks to sell the Rafale, a key rival to the Eurofighter, to Saudi Arabia.

BAE Systems admits that talks with Saudi Arabia over the Eurofighter deal have slowed down.

14 Decempber 2006
The Attorney General, Lord Goldsmith, announces that the SFO is dropping its investigation.

6 January 2007
Saudi Arabia's Defence Minister Crown Prince Sultan bin Abdul Aziz Al Saud says the country is looking forward to gaining delivery of the 72 Eurofighter jets "very soon".

17 January 2007
OECD says there are "serious concerns" about the British probe being dropped.

29 April 2007
MPs warn that Britain's reputation for fighting corruption may have suffered "severe damage" because of the dropping of the fraud inquiry.

7 June 2007
A BBC investigation finds that ex-Saudi ambassador to the US, Prince Bandar bin Sultan - who negotiated a £40bn arms deal between Britain and Saudi Arabia - received secret payments for over a decade.

Prince Bandar "categorically" denies receiving any improper payments and BAE says it acted lawfully at all times.

8 June 2007

The attorney general, Lord Goldsmith, denies claims in The Guardian newspaper that he concealed from an international anti-bribery watchdog the existence of secret payments to a Saudi prince.

11 June 2007

The BBC learns that Lord Woolf, the former Lord Chief Justice of England and Wales, will head an independent review of business practices at BAE.

26 June 2007

BAE says it is the subject of an anti-corruption probe by the US Department of Justice that will look at its compliance with anti-corruption laws including its business "concerning the Kingdom of Saudi Arabia".

BAE contribute to Tanzania's debt

by Deus Kibamba of the Tanzanian Gender Networking Programme

Another scandal is rooming in a country so poor that resources are hardly available for social services even as key as education, health and water. In the new row, involving a well established UK bank and BAE, the UK’s biggest arms supplier, Tanzania was robbed off $ 12 million (more than 15 billion Tanzanian shillings) being the amount secretly paid out as commission to middlemen in the deal.

In this deal, BAE Systems allegedly inflated the price tag of a controversial military air traffic control radar system from an estimated $ 28 million to $40 million representing a figure close to 30% of inflated costing of the contract value in a single deal. This appears to be one of the most serious corruption cases that faces Tanzania today.

Even more controversially, sources link outgoing British premier Tony Blair with the deal, prompting the government of Jakaya Mrisho Kikwete in Tanzania to propose a compensation demand from the UK if it was proved that the military radar system the UK sold to Tanzania was overpriced. It is said that despite the World Bank’s opposition to the deal, following its own research that showed the BAE radar system was unsuitable and that a similar system as cheap as $10 million would be more suitable, the then UK prime Minister, Tony Blair and Foreign Secretary Jack Straw continued and backed the sale amid informed opposition from Gordon Brown, then Chancellor of the Exchequer and Claire Short who was Minister for International Development. The UK’s Serious Fraud Office has for some months now been carrying out an investigation into the public row, which has sparked serious parliamentary and public debates in Tanzania.

Within Tanzania, the former president Benjamin William Mkapa and some aides are under serious public pressure. Despite agitation by civil society against the purchase, Mkapa was said to be pushing for it. His then Minister of Finance Basil Pesambili Mramba was quoted commenting on the purchase of the radar equipment to point that if the deal meant it, Tanzanians would rather eat grass than stop the purchase of the radar and another tender for the acquisition of a presidential gulf-stream jet. All this was between 2001 and 2004.

To acquire the radar, Tanzania had to borrow money from the Barclays Bank to finance the purchase. Reports have it that there are countries that acquired same type of the system at a cost less by 45 percent. These include Saudi Arabia, Indonesia and Turkey. Without the purchase’s defence from the highest circles of the UK government many people believe Tanzania would not have entered into the flawed transaction. This amount enters into an already huge debt of more than $7.2 billion that Tanzania owes the world despite a debt relief under HIPC. How different is this from the traditional odious debts that Tanzania would wish to denounce?

According to the UK’s Guardian newspaper in January 2007, there has been admission by the middlemen that BAE secretly paid the $12 million ‘bribe’. The Bank of Tanzania reports the figure for Debt servicing as amounting to 9.8 million dollars in the quarter ending in December 2006. This raises lots of serious governance questions both in the UK and Tanzania especially the fact that the British Aerospace System is a British government owned firm. What is the relationship between Tanzania and the UK in as far as trade is concerned?

One thing is clear that the war against poverty that Africa is waging is next to impossible if international corruption can not be curbed. Tanzanians now are having to spend huge sums to service ‘odious debts’ at the expense of education, health and water, to name only a few necessary social services for Millennium goals to be realized come 2015. The people of the UK must support Tanzanians in shaming such deals!

Friday, 21 September 2007

Ethical Investment for Edinburgh Council: Why are BAE Systems bad company?

Ethical Investment for Edinburgh Council: Why are BAE Systems bad company?

Ethical Investment Campaign Blocked by Liberal Democrats

Ethical Investment Campaign Blocked by Liberal Democrats

The campaign for Edinburgh Council's pension fund to disinvest from arms company BAE Systems was blocked last night by the Liberal Democrats.

Green Councillor Maggie Chapman's motion calling for an ethical investment policy was replaced by a Liberal Democrat counter-motion calling for a ' balanced and properly diversified investment portfolio', erasing all references to BAE.

This comes despite the company's record of providing weapons to Zimbabwe, Colombia, Indonesia and Israel, as well as for the recent war in Iraq. Stunningly, it also runs directly counter to Liberal Democrat conference policy.

The campaign has however made a major breakthrough - the Green motion was supported by the Labour group, whose fund manager refused to embrace ethical investment when Labour were in power last year.

To plan what to do next please come to the Potterow Chaplaincy, 7pm, Thursdays! and/or join the facebook group .

To view the Green motion please click here and see item 10.4 .

Thursday, 13 September 2007


Thursday 20th September. 7pm.
POTTEROW Chaplaincy
Bristo Sq Edinburgh
'The Global Arms Trade and Edinburgh Council'

Speakers include

John Watson, Director, Amnesty Scotland
Julian Parrott, Director, Ethical Futures
Maggie Chapman, Green Councillor for Leith Walk Ward