Today the National Audit Office has released a report into what controls the UK’s Ministry of Defence had in place on two key defence programmes with the Saudi Arabian government and gave it a clean bill of health.
These programmes have both been subject to criminal investigations, including one by the Serious Fraud Office into BAE which was stopped by the government under Tony Blair in 2006, and another which resulted in a £30.3 million fine for corruption being imposed on a company GPT (a subsidiary of Airbus) in 2021.
Susan Hawley, Executive Director of Spotlight on Corruption, said:
“While it is very welcome that the NAO has published its review of the MOD’s arrangements in Saudi Arabia, the limitations of this report risk it being a whitewash after decades of dubious defence deals with the Gulf state.
The NAO has essentially signed off lessons learned from this major corruption scandal without looking at the underlying events. As a result they appear to have let the MOD commercial team decide what lessons should be learned – despite judicial findings that cry out for robust scrutiny of the MOD’s role in multi-million pound contracts tainted by corruption. That effectively allows the MOD to mark its own homework.
Most concerningly, the NAO appears to be signing off on procurement practices within these projects which pose incredibly high risks of corruption. The fact that both the MOD and BAE Systems essentially allow the Saudi military bodies to mandate that certain companies should be awarded contracts, including without any competition, raise red flags that call for enhanced safeguards to protect taxpayer-funded spending on defence.
It is essential that the Defence Select Committee undertakes proper scrutiny of whether the MOD’s anti-corruption procedures really are robust enough to ensure that another major bribery scandal does not emerge a couple of years down the line. With government plans to raise defence spending by billions and billions, now is the time to future-proof procurement processes from corruption.”
Background
- In March 2024, Spotlight on Corruption called on the National Audit Office to “conduct a thorough audit of the MOD’s bank accounts and contracting arrangements in relation to Saudi government to government contracts and publish a report on its findings.”
- This was in response to the acquittal of two men for making corrupt payments between 2007 and 2012 in relation to the SANGCOM project in Saudi Arabia. The company they worked for or with, GPT Special Project Management Ltd pleaded guilty to making the same payments in 2021 and was required to pay a fine of £30.3 million.
- The prosecution of these men, which resulted from allegations brought to light by whistleblowers in 2010, revealed extensive and disturbing allegations of government knowledge and potential complicity with alleged corrupt payments.
- The extensive knowledge of UK government officials about the allegations, and the role of the Ministry of Defence in authorising alleged bribes, is likely to have been a critical factor in the acquittal of the men.
- As the NAO report acknowledges, the judge sentencing GPT for one count of corruption noted in doing so that the UK government was “substantially involved in the historic corrupt arrangements which led to GPT’s offending conduct” and reduced their fine accordingly. Our briefing lays out what evidence emerged from the court case about what the government knew.
