The Financial Times reports today that U.S. investigators have targeted a third high-ranking British executive in a probe into corruption at U.K. defense contractor BAE Systems. It says U.S. Department of Justice officials served a subpoena against the BAE executive, a former head of Britain’s arms export agency, two weeks ago. The DoJ has continued investigating allegations into corruption at BAE after U.K. prosecutors bowed to political pressure to drop its probe.
DoJ officials served Alan Garwood, BAE’s business development director, when he was changing planes at the Miami airport. He was head of export sales at the U.K. Ministry of Defense until last year.
“He is the third senior BAE executive to be served papers in relation to the DoJ’s investigation of the £43bn al-Yamamah arms deal between Saudi Arabia and the UK in 1985. It was about a week after BAE chief executive Mike Turner and Sir Nigel Rudd, a BAE non-executive director, were issued with subpoenas as they landed in the US. The targeting of Mr Garwood is potentially significant. He worked on important campaigns, including last year’s deal to sell Eurofighter Typhoons to Saudi Arabia. He was seconded to the MoD from BAE in 2002.”
The company is accused of paying billions of dollars in bribes since the 1980s to senior Saudi Arabian officials and members of the royal family to win lucrative arms contracts. BAE says it "has been and continues to be in discussion with the DoJ concerning the subpoenas served in the course of its investigation."
Prosecutors often serve or even detain foreign businessmen when they transit through U.S. airports. UBS, the troubled Swiss bank, has warned its executives not to transit through American airports. It is fighting charges that UBS bankers helped clients evade U.S. taxes.