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Top BAE executives held in Texas

Sylvia Pfeifer and Stephanie Kirchgaessner
Financial Times
Monday, May 19, 2008

Mike Turner, the chief executive of BAE Systems, and Sir Nigel Rudd, a non-executive director, were detained last week by US authorities investigating bribery allegations.

The two, who are among the UK’s most senior businessmen, were issued with subpoenas by officials from the Department of Justice as they landed at Houston airport last Monday. They were kept for about half an hour and had their documents, as well as personal electronic equipment, examined.

The department is investigating the £43bn ($84bn) al-Yamamah arms deal under which Saudi Arabia bought aircraft and other defence equipment from the UK in 1985. BAE announced in June that the department had launched an inquiry to determine if its business dealings with Saudi Arabia complied with anti-corruption laws. There have been persistent allegations that bribery was involved in the contract, with stories of slush funds used to entertain Saudi officials and royalty. BAE has always denied any wrongdoing

Sir Nigel, one of the City of London’s most respected businessmen and currently chairman of BAA, the airports operator, only joined the BAE board in September 2006.

BAE confirmed on Sunday that the DoJ had served a “number of additional subpoenas in the US on employees of BAE Systems plc and BAE Systems Inc as part of its ongoing investigation, which the company has previously announced”.

“The company has been and continues to be in discussion with the DoJ concerning the subpoenas served in the course of its investigation.”

BAE declined to comment on the details of the subpoenas but stressed that neither man was prevented from entering the US and that Mr Turner was now back in the UK.

The British government has been considering a request for assistance from the department since last year. The Home Office said the request was “being given detailed consideration”.

Full article here.

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