Prosecutors to take BAE to court

LONDON, Oct. 1 (UPI) -- British prosecutors plan to file charges against BAE Systems, Europe's largest weapons maker, in connection with allegations of bribery payments to clients in Eastern Europe and Africa.

Britain's Serious Fraud Office will ask the country's attorney general for permission to take the arms company to court on corruption charges, the agency said in a statement Thursday. The SFO decided to take the step after months of trying to convince BAE to plead guilty for a smaller fine.

The allegations concern the sale of an air-traffic control system to Tanzania, aircraft deals in South Africa and the Czech Republic, and a contract for two frigates in Romania.

BAE has always denied any wrongdoing. The company said in a statement Thursday it would continue "to expend considerable effort seeking to resolve, at the earliest opportunity, the historical matters under investigation by the SFO. BAE has at all times acted responsibly in its dealings with the SFO."

BAE added it was ready to "deal with any issues raised in those proceedings at the appropriate time and, if necessary, in court."

That BAE is ready to do so may lie with the current status of the SFO; in 2006, the government of Prime Minister Tony Blair shut down inquiries into the sale of Tornado warplanes to Saudi Arabia -- a huge deal that according to The Guardian handed BAE nearly $70 billion -- on grounds that it endangered national security and undermined anti-terror cooperation with the Middle Eastern country. The decision to shut down the investigation provoked protest and left SFO relatively toothless.

Last year the agency got a new head, Richard Alderman, and the former lawyer tried to boost investigations against BAE that were weak on evidence, but still open -- said bribery allegations in Tanzania, South Africa, Romania and the Czech Republic.

The SFO collected new evidence that it presented to BAE -- together with an offer to plead guilty and accept a fine, which the arms company refused to take.

The agency at the start of the negotiations wanted around $800 million, but in court, the sum could easily go up to $1.5 billion, observers say.

BAE is Europe's largest arms company. It is building two aircraft carriers for the Royal Navy and is involved in the Joint Strike Fighter and Eurofighter programs. Last month, Britain, Germany, Italy and Spain signed a $13 billion order contract for a total of 112 Eurofighter jets. BAE is the main equipper of the British armed forces and is strong in the United States, where it generates 58 percent of its sales.

The company nevertheless announced last month it would ax 1,116 people in Britain until 2012.