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 | Today Programme Report - Text Only Version 91Èȱ¬ Radio 4 |
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| Wednesday 12th November 2003 Arms Deal Fraud Allegations The Ministry of Defence is under growing pressure to investigate allegations of bribery and fraud at a company involved with a British arms deal. The man who blew the whistle is former Robert Lee International (RLI) employee Edward Cunningham. BAE Systems is Britain's biggest defence manufacturer, employing 90,000 people worldwide. In the mid 1980s it helped pilots from Saudi Arabia come to Britain to train. Edward Cunningham was working for a company providing visas, not at the time RLI, but contracted by BAE. He says he was asked to look after the pilots. "They would ask me to get women for them ... they would have two or three women a night and then they'd want to go have a meal somewhere at three in the morning, come back again and start again ... it used to wear me out ." Then BAE contracted Robert Lee International in 1986 to provide visas and hospitality to Saudi officials involved with the Al-Yamamah arms deal, the biggest international defence deal done with the UK, worth an estimated £26 billion. RLI still provides visas for BAE. Edward Cunningham, who joined RLI in 1986, claims Saudi ‘hospitality’ amounted to millions of pounds. He says he was told by BAE senior executives it was Saudi money and allowed for in the contract. "I was told that this was necessary otherwise you could say goodbye to this contract and they'd look elsewhere." Edward Cunningham alleges hospitality amounted to millions of pounds. It included the provision of cars, yachts and trips for Saudis. Mr Cunningham also alleges fraud against BAE. In 1996 a BAE security officer, Martin Bromley, carried out a report. Seen by this programme its first objective was to examine allegations of large scale fraud against BAE with the possible assistance of one of BAE's executives. It also looked at blackmail by an ex-prostitute over sex and bondage with Saudi princes, tax evasion and VAT fraud valued over a million pounds. Documents Mr Cunningham has shown this programme show how a house, paid for by BAE and registered in the name of a Saudi prince, was actually occupied by a BAE executive and his mistress employed at RLI. In a signed statement the director of RLI claims it was a gift from the Saudi prince. Also among the documents is an internal memo suggesting BAE was aware of financial concerns and tried to make sure they were being more tightly managed. Edward Cunningham was told in 2000 that due to cut backs his services were no longer required. He claims this came shortly after he raised concerns of fraud against BAE. He started employment tribunal proceedings which resulted in an out of court settlement of £20, 000. RLI deny any of their staff defrauded BAE or were responsible for any wrongdoing. The Director of the company John Sharp told the Today Programme that BAE knew about everything he did and approved all the expenses he put to them. In a statement BAE said: "We obey the laws of the UK and all the countries we operate in and vigorously reject any allegations of wrong doing". The Ministry Of Defence is responsible for monitoring the Al-Yamamah Saudi arms deal. Two and a half years ago the Serious Fraud Office (SFO) alerted Sir Kevin Tebbit the Permanent Under-Secretary at the MOD to Edward Cunningham's allegations. Even though the Serious Fraud Office said there was insufficient evidence to justify a criminal investigation, it outlined concerns that government money could be involved. Sir Kevin Tebbit wrote back saying: "I have no wish to set damaging hares running, but given the sensitive issues raised in your letter, I have conducted a discreet initial exploration of the allegations' implications for the department. " Two and a half years later, in September this year, Sir Kevin Tebbit blamed an office move for not informing the SFO what had happened, although he says he personally drew the allegations to the attention of BAE chairman Sir Richard Evans and felt reassured by him. Now the Serious Fraud Office is examining additional material to see if there is a case for criminal investigation. The MOD says it will take account of future developments if there prove to be any. Edward Cunningham told us: "I think it's an unhealthy relationship between MOD and BAE. I found the attitude of the MOD was ‘don't upset these people they're bringing money into this country, look at this money … we can condone these little things." He's requested any further MOD correspondence pertaining to him under the Data Protection Act, which hasn't been forthcoming so far. He's preparing a request for an investigation by the Parliamentary Ombudsman into maladministration at the MOD. The National Audit Office has been asked to investigate. "Saudis have a trust in the British Government and BAE to ensure they're not taken for a ride by money grabbers ... all I can say is I've brought it out and my conscience is better than it was. Something's got to be done. " In a statement the MOD said: "Sir Kevin Tebbit established that the allegations were not of direct relevance to the MOD as they related to the role of a sub contractor to BAE systems - Robert Lee International, and Government money had not been involved. The Permanent Secretary raised the matter with the chairman of BAE systems in the context of the Government's robust anti-fraud policy, for any further necessary action. The suggestion that the MOD failed to take action on receipt of the SFO letter in 2001 is without foundation. The SFO has indicated that the action the MOD took when the issue was raised in 2001 was entirely proper, and was grateful for the Permanent Secretary's help." 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