The U.K.’s Big Saudi Bribery Probe Is Stuck in Legal Limbo

LONDON (Capital Markets in Africa) – Nearly a year after the U.K. Attorney General sought external legal advice on the country’s most sensitive bribery case, the logjam surrounding the saga appears no closer to easing.

More than 14 months ago, the Serious Fraud Office, the U.K.’s top white collar crime prosecutor, asked the Attorney General to approve charges against former employees of a unit of Airbus SE. It alleged that the Riyadh-based subsidiary, GPT Special Project Management, had paid bribes to win a 2 billion-pound ($2.6 billion) contract to provide services and training for the Saudi Arabian National Guard. The case was particularly sensitive because the U.K. Ministry of Defence had been involved with the contract.

In July, the Attorney General took the unusual step of commissioning an independent legal adviser to study the strength of the case, according to people with knowledge of the matter, who didn’t want to be identified because they’re not authorized to speak about it. Ten months later, then-Attorney General Jeremy Wright has been replaced by Geoffrey Cox and the matter still hasn’t been resolved.

The setbacks are becoming a showcase for the U.K.’s difficulties in prosecuting major companies and their officials for foreign bribery. The SFO is under-resourced, enjoys little judicial protection and relies on often antiquated laws. In this case, it also needs approval from the Attorney General, who legally can only green-light cases if he thinks the evidence is good enough and the case is in the public interest.

“It’s deeply troubling that the Attorney General has been sitting on this case for over a year – a case that the SFO was clearly telling him it was ready to bring and needed consent to proceed,” Susan Hawley, Policy Director of transparency campaign group Corruption Watch, said. “The risk that the Attorney General could be holding this case up because it involves potential damage to relations with Saudi Arabia, or even more worryingly because it exposes involvement by government officials at the Ministry of Defence, is really high.”

The Attorney General’s Office and the SFO declined to comment. A spokesman for the Ministry of Defence said it would be “inappropriate” to comment as the investigation is ongoing.

“We have not been notified of a decision to proceed with charges in this case,” a spokesman for Airbus said in a statement. “We are continuing to cooperate with the SFO. It would not be appropriate to comment further at this time.”

The SFO opened its investigation in 2012, after a former employee flagged the issues, which predate Airbus’s purchase of GPT. Within two years, it had made arrests and questioned at least six individuals, including two Ministry of Defense employees. The period was the SFO’s most ambitious, and it also went after Barclays Plc top brass, bankers involved in rigging interest rate benchmarks and a string of other blue chip companies.

Separately from GPT, the SFO is investigating corruption in Airbus’s sales practices abroad.

The SFO, which has the same 54 million-pound budget it had five years ago, has been the target of political sniping, and is regularly challenged in the courts by the targets of investigations — sometimes successfully. The law used in the GPT case dates back to 1906, because events in question took place before 2011, when the U.K.’s sturdier Bribery Act took effect. Prosecutors are still lobbying for stronger laws to be brought in to cover other economic crimes.

The GPT saga is under more external scrutiny, because, in some ways, it echoes the corruption probe into BAE Systems Plc for its dealings in Saudi Arabia more than a decade ago. That case looked at whether the British arms manufacturer bribed the Saudi royal family, but the SFO dropped the investigation after months of pressure from the government of then-Prime Minister Tony Blair. Like with BAE, the U.K. government was also involved in GPT’s contract in Saudi Arabia and one of the people who discussed the investigation described it as a “mini BAE.”

The Attorney General hired John McGuinness, who has led several high-profile prosecutions, including securing prison sentences for two former oil bosses for fraud last fall. McGuinness has been a Queen’s Counsel, the highest distinction as a trial lawyer, since 2001 and is the head of his chambers — offices that British trial lawyers share. He declined to comment.

While the case may be politically sensitive, Azizur Rahman, the founder of white-collar crime law firm Rahman Ravelli, said McGuinness will only advise the Attorney General “on the prospects of a successful prosecution, but cannot advise on whether, for example, it would be politically prudent to prosecute.”

Source: Bloomberg Business News