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Ethical arms deals? Don’t make me laugh.


In recent years it’s become fashionable to hate the pharmaceutical industry, or Big Pharma (presumably if it were Little Pharma we’d like it since it might be cute and fluffy, or otherwise scamp-like), and sure, there’s plenty to dislike about their business practices (especially when they keep merging and firing scientists, a view you’d also share if you were a pharmacologist). There’s also Big Oil, who’ve been making a lot of money and generally being beastly in places like the Niger delta, but bad as they are, in my opinion they’ve all got a long way to go before they’re able to compete in the “Big league of evilness” with the arms industry. Drugs and oil might be responsible for a lot of deaths, but that’s a byproduct; selling cluster munitions so that the repressive government of your choice can use them on people it doesn’t like results in deaths that were very much intended.

But, it’s very big business, and it’s business that the permanent members of the Security Council all have a piece of. Now, the US has had it’s own scandals with the defence industry, most recently the Boeing procurement scandal comes to mind, but hailing as I do from the UK, it’s BAE Systems and their woes that have caught my attention recently.

Foremost of these involves the al-Yamamah arms deal, a multibillion dollar arrangement to sell the Saudis a load of fighter jets that their princes can pose next to in sunglasses and flight suits trying to look fierce, although Farley will no doubt point out upon his return that they did manage to shoot down a couple of Iraqi Mirages during the 1991 Gulf War .

BAE systems won this highly lucrative arms deal, but greased a few palms along the way, a practice that’s part of doing business in that part of the world, but one that the west doesn’t really like to acknowledge. The biggest beneficiary was the Saudi ambassador to the USA, Prince Bandar, also known as Bandar Bush for his close ties to the 41st President and his chums. Bandar received around $100 million a year from BAE, for two decades, a pretty significant payout in anyone’s eyes.

As news of this began to emerge, the Serious Fraud Office in the UK began an investigation into the deal, right up until they were stopped by Tony Blair. This halting of the investigation was more than a little egregious, given Blair’s constant pontification on the importance of good governance, and the big deal he made about signing the UN’s anti-corruption treaty in 2003. One of the clauses of that treaty forbids signatories from taking economic benefit into account when investigating bribery.

Bandar gave Blair the fig-leaf of legitimacy he needed to stop the probe by threatening that Saudi Arabia would cease its cooperation in intelligence operations against Al Qaeda, and that was that. Or it would be if the FBI hadn’t also gotten involved. BAE does about 40 percent of its business in the US, and so US prosecutors claim this gives them jurisdiction over the company. BAE’s CEO was recently detained for a few hours after a visit to the US, and following the trial of the Natwest 3, I’d be cancelling any US trips if I were a BAE executive.

It’s not just the FBI who’re after BAE though. The little suburb of Harper Woods in Michigan is suing BAE over the scandal, as the town employees’ pension fund includes $135,000 worth of BAE stock. Churlish as it might seem, perhaps they shouldn’t have invested in an arms manufacturer if ethical corporate behavior was something they felt strongly about? As they say, if you lie down with dogs, expect to get fleas.

Being such a big player, this isn’t the only bribery scandal that BAE is involved in. They have links to Republican Senator Mitch McConnell, although the $50,000 he got seems a little pathetic compared to Bandar’s billion.

BAE are also imbroiled in a scandal in South Africa, where their bid to supply training jets was picked over a much cheaper bid from Italy, despite vocal opposition from the South African military. In that case, BAE gave the ANC, South Africa’s ruling party, around $1 million, money that the ANC used to finance their last election (although why they needed it is a little beyond me – the chances of anyone other than the ANC being elected is more than remote, despite the ANC’s great failings as a government). South Africa, taking cues from its one-time imperial master also quashed a fraud investigation, and leader-in-waiting Jacob Zuma used the threat of spilling the beans to help get him out of hot water after having raped a young family friend.

Distateful as all these cases may be, I have to ask: “what else did you expect from arms dealers?” If, as a nation, you want to be in the arms business, which the UK certainly does, coming second only to the US in annual sales, then you better accept that part of the cost of doing business is greasing palms along the way. If you don’t want to accept that fact, realise that the French, Chinese and Russians aren’t nearly as squeamish, and kiss goodbye to those jobs and your balance of trade.

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