BAE Systems Pleads Guilty In Fraud Conspiracy Case
By ANDREW M. HARRIS Bloomberg News
BAE Systems, Europe's biggest defense contractor, was ordered to pay a $400 million fine after admitting it conspired to defraud the federal government, the Justice Department said Monday in a statement.
The London-based company pleaded guilty in federal court in Washington to violating the U.S. Foreign Corrupt Practices Act by making false statements and breaching U.S. regulations covering the export and international trafficking of arms, prosecutors said.
U.S. prosecutors charged the company last month with failing to disclose to the U.S. payments made in connection with the leasing by the governments of the Czech Republic and Hungary of Gripen fighter jets from Sweden. The jet was built by Saab AB and marketed by BAE until 2005. The company also provided “substantial benefits” to an official of Saudi Arabia.
The Foreign Corrupt Practices Act outlaws companies with operations in the U.S. from paying bribes to foreign officials for business. While BAE has a Rockville, Md.-based U.S. subsidiary, BAE Systems, none of the unlawful conduct involved that unit, the Justice Department said. BAE also has a plant in Sealy west of Houston.
BAE had promised the U.S. starting in 2000 that it would put in place controls to ensure compliance with the law's anti- bribery provisions. It failed to do so, the Justice Department said.
“The company has systematically enhanced its compliance policies and processes,” the company said in a statement last month.