Easy defence of corrupt deals
08 February 2010
BAE Systems, the largest defence contractor in the UK, has paid out record fines for the way it carries out it’s business, but should we be surprised that defence companies bend the rules?
The fines, approaching $450m, have followed investigations into alleged bribery by BAE with a view to winning various overseas contracts, the largest being the $67 billion contract for fighter planes with Saudi Arabia. BAE has admitted no more than poor accounting and reporting procedures that may have mislead the investigations by the US Department of Justice and the UK’s Serious Fraud Office. These fines recognise that and BAE’s payment of them will close the case for corruption brought against it. In effect, BAE has ‘bought off’ the US and UK governments.
What surprises me about this case is really that anyone should be surprised. At this point I move away from talking directly about BAE as I have no reason, apart from what I have read in the UK’s national papers, for believing that BAE has had any involvement in corrupt practices. However, the general assumption that the arms trade should be run using a strict moral or legal code to me seems bizarre.
It is an industry that is built on power. While we hope that power is always in the right hands and can be exercised judiciously and for the benefit of all, it clearly is not always the case – and this is where abuse of power goes hand in hand with greed and corruption. I imagine that any company who wants to survive has to do their best to win contracts and if this involves making their customers look favourably on them by showering them with gifts then they may view it as a small price to pay and a practical solution. I really don’t think ethics will play a significant role in their behaviour.
Equally of course, any company involved in fairly tendering for a contract would want the playing field to be level, and any hint of underhand practices by competitors would be pounced on immediately, but in an industry that needs to be inherently secretive, I am sure that many of those involved are well-practiced in maintaining silence where necessary.
On to other matters and I have an event to attend this week that has risen in stature and size over recent years to become an established part of the UK calendar. The event is Southern Manufacturing incorporating Southern Electronics. Booth sizes are kept deliberately small and this makes no pretentions for being a huge technology event. This is more about meeting and greeting, and finding the right partners and suppliers. It is a formula that has worked well for companies on a regional level. It is not an event that would be worth flying into the UK for, but if you are in the Southern half of the UK it is well worth a visit, particularly if you are currently in the business of looking for new companies to work with. The event takes place in Farnborough (home of the famous airshow) this Wednesday and Thursday.
For a review of the show, click here.
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