corrupt arms deals

Accounting irregularities

The British Serious Fraud Office (SFO), after an extensive investigation into six cases of corrupt arms deals, first sought to prosecute BAE, but then settled with the company which was obliged to admit only to minor accounting irregularities and pay a fine of £500,000 (about $781,000). A few months later, in a settlement with the US government, BAE admitted that it had paid unauthorized commissions (what you and I understand as bribes) on these deals. The company was fined almost half a billion dollars, a miniscule percentage of what it had made on the deals, and allowed to continue its activities.

A few years earlier, under political pressure from Tony Blair, the SFO had closed down an investigation into BAE in relation to the world’s biggest ever arms deal. According to police, BAE paid over £6 billion ($9.37 billion) in bribes on the Al Yamamah deal with the autocratic state of Saudi Arabia. No-one has ever been charged with wrongdoing.

Governments protect their country’s arms companies from meaningful scrutiny and the legal implications of their behaviour because of the symbiotic relationships between them. There is regular movement of senior people between jobs in governments, intelligence agencies and arms companies. The companies are seen not only as key components of their country’s manufacturing sectors but also as crucial to national defence, foreign policy and intelligence gathering.

In the post 9/11 world, with its emphasis on national security, it has become increasingly difficult to criticize these assumptions. It is even ignored that for the cost of every job generated in the industry, between three and seven could be created in other sectors such as health, clean energy and education.

During these economically difficult times, in which millions are losing their jobs and the public sector is being stripped bare, the weapons business displays few signs of belt-tightening.

Lift the veil

The US, which spends almost as much as the rest of the world combined on defence, is pressing ahead with the production the F-35, a jet fighter which will cost its taxpayers at least $380 billion and which, in the words of a former Pentagon aerospace designer, is ‘a total piece of crap’.

The time has come to lift the veil on this shadow world, to demand that our taxes are not used to develop another deadly weapon for the material benefit of a tiny self-serving élite

But it is needed to ensure the continued prosperity of the domestic USweapons buying system in which Pentagon leaders approve these absurd projects because the vast majority of them want high-paying jobs with the weapons manufacturers when they leave government service. Politicians vote slavishly for them because they receive massive political campaign contributions from the companies and fear being labelled anti-jobs. Meanwhile, the companies themselves laugh all the way to the bank, often producing irrelevant or inadequate weapons years too late and for more than double the originally agreed cost.

The arms business, which fuels and perpetuates conflicts around the world, is less regulated and scrutinized than other ‘harmful’ industries such as tobacco and alcohol. In order to continue to operate, those who manufacture and trade in weapons must accept a far greater degree of regulation, transparency and accountability.

The time has come to lift the veil on this shadow world, to demand that our taxes are not used to develop another deadly weapon for the material benefit of a tiny self-serving élite, but are rather employed to enhance the lives of those who go hungry, who are without work or who suffer the deadly consequences of the trade in arms.

Andrew Feinstein is a former ANC Member of Parliament in South Africa. He is now an author, campaigner and co-founder of Corruption Watch. His latest book is The Shadow World: Inside the Global Arms Trade (2011, theshadowworld.com).