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Tanzania: UK Review of Watchman Deal a 'Cover Up'
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The East African (Nairobi)
12 May 2008
Posted to the web 12 May 2008
Paul Redfern
Nairobi
A review of the selling practices of the large UK firm, BAE Systems, in the wake of the controversial air traffic control systems deal with Tanzania has been slammed as a whitewash.
However, Lord Woolf, the former UK Lord Chief Justice who conducted his inquiry into the firm's affairs, concluding with a report on May 6, denied the criticism.
Despite an acknowledgement that his inquiry included neither the allegations that BAE Systems had paid a 30 per cent plus commission into a Swiss account to facilitate the air traffic control system nor allegations concerning a number of other international sales, including the air force deal with Saudi Arabia, Lord Woolf insisted that his job was to ensure that past mistakes did not happen again.
"The future is much more important than the past," Lord Woolf insisted.
"The company has continued to suffer reputational damage in respect of its business ethics. The damage flows directly from what is alleged to have happened in earlier years .(and) there is scepticism as to what extent the company has left its legacy problems behind."
The company has acknowledged it has an image problem. Chief executive Mike Turner said that BAE had not "in the past paid sufficient attention to ethical standards and avoided activities that have the potential to give rise to reputational damage."
Lord Woolf also says that the use of advisers to help obtain contracts has not helped the company's reputation.
"Most of the criticisms made against the company have concerned allegations that such advisers have engaged in corrupt practices. The company, because of the ethical and reputational risks involved, has taken radical action in terminating or reviewing all existing contracts it held with such advisers.
"It has now introduced a rigorous process for the appointment, selection and management of all future Advisers."
The Guardian however pointed out that Lord Woolf himself was appointed by BAE Systems to conduct the review and that its terms of remit specified the inquiry was not to look at past activities or allegations concerning secret payments to middlemen through offshore accounts to secure contracts.
It said that Lord Woolf stood accused of "producing a whitewash for a company desperate to improve its public image."
BAE continues to be investigated by the UK's Serious Fraud Office over claims it paid bribes to secure its air traffic control system deal in Tanzania, which cost Dar es Salaam around $40 million.
Last year in a parliamentary debate on the subject, former UK secretary of state for international development Clare Short said former Tanzanian President Ben Mkapa had been desperate to stop his government having to buy the controversial "Watchman" radar air traffic control system in 2002.
Ms Short also revealed at the time that she had seen documents from the Serious Fraud Office showing that the £28 million ($39 million) sale was corrupt.
The debate, which was initiated by the opposition Conservative party following allegations that a $12 million bribe was paid by BAE for the deal to go ahead, also revealed the extent to which Barclays Bank was involved in highly controversial funding for the radar system.
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The Guardian said that Lord Woolf's remit "was too narrow and tight" for him to address issues such as claims that the company had "set up a secret offshore subsidiary to handle worldwide cash for arms deals."
But it is acknowledged that part of Lord Woolf's problems was that BAE Systems still faces criminal investigations in a number of international capitals including Washington DC, Prague, Berne and Budapest as well as Johannesburg and Dar es Salaam.
Lord Woolf himself insists that his 23 recommendations will form a "road map" for the future and would ensure "higher standards of ethical business conduct."
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