in the back
On Her Majesty's illicit service
GPT bribery scandal , Issue 1547
A DECADE after former Army Signals officer Ian Foxley blew the whistle on bribery in a major government contract with Saudi Arabia, the company that employed him has pleaded guilty to corruption. More remarkable, however, was what emerged at Southwark crown court two weeks ago about blatant government connivance in criminality over 30 years.

sangcom.jpg
SANGCOM SAGA: Whistleblower Ian Foxley, Saudi Prince Miteb and Alan Garwood, who ran DESO from 2002 to 2008
In late 2010, Foxley was the new programme director on a military telecoms deal with the Saudi Arabian National Guard, known as SANGCOM. He was working for the contractor on the deal, Airbus-owned GPT Special Projects Management Ltd, in Riyadh. There, thanks to a previous whistleblower, he soon discovered regular payments by GPT to offshore companies using the name Simec, for which no services were provided.

These companies were controlled by one Peter Austin who, said Mr Justice Bryan as he sentenced GPT, was "a 'fixer' in the Middle East for decades, often relied upon by the British commercial community for his extensive contacts and good relations in the host state".

Bribes worth around 12 percent of costs on the contract, or several millions of pounds a year, were funnelled through this network into local and Swiss accounts belonging to senior figures in the National Guard. Foremost among them in the period for which GPT admitted guilt, from December 2008 to July 2010, was Prince Miteb bin Abdullah, son of the late King Abdullah who died in 2015.

Line of duty
IF the sheikhs were the illicit beneficiaries, they could thank the British government for making it possible. From the inception of the SANGCOM arrangement in 1978, senior officials condoned the corruption. A memo that year from the head of defence sales at the Ministry of Defence (MoD) explained that the fees, "although described as 'technical consultancy' amount in practice to the exertion of influence to sway decisions in favour of the client".

That was supposedly the bad old days, when governments backed arms companies to do whatever it took to get a slice of the new oil money. Things should have changed when the UK ratified the UN Convention on Combating Bribery of Foreign Public Officials in 1999. Instead, the MoD renewed and encouraged the practice as later phases of the SANGCOM deal were signed.

In August 2006, when Airbus (then called EADS) was buying GPT from another multinational, one of its executives wrote to the regional marketing director of the MoD's defence sales and export organisation (DESO) Malcom Haworth reassuring him "that it would be our intention to continue with the present arrangements in respect of market access channels". Airbus's due diligence on GPT referred to "certain business practices" under what the judge called "an MOD-approved contractual requirement". In June 2007, he said, "Haworth again signed letters from DESO to the [MoD's] SANGCOM team [in Riyadh] noting and approving GPT's use of Simec as its sub-contractor and approving the reasonableness of the costs". Airbus and GPT executives considered this "top cover".

So routine were such "business practices" that in 2006 the government "was aware that there may have been a document held by SANGCOM in [Saudi Arabia] that listed all the 'fixers' used by [the UK government/Saudi Arabian National Guard] and the amounts they were paid… said to be kept in a sealed envelope in a safe at SANGCOM". Back in London, the MoD's team leader overseeing SANGCOM, Simon Kershaw, had been in close contact with Peter Austin and emails suggested he "had known the purpose of the Simec sub-contracts". (Kershaw would later step through the revolving door to become a director of GPT.)

It would take six years from Foxley's disclosures for the Serious Fraud Office to decide to charge GPT, and another three before the then attorney-general Geoffrey Cox gave his consent – conspicuously not finding, as Lord Goldsmith had in the infamous BAE/Al Yamamah case in 2006, that prosecution would cause too much harm to relations with the Saudis. Most likely this reflected the animus between current Crown Prince Mohammed bin Salman (MBS) and Prince Miteb (whom MBS banged up in the Ritz Carlton in 2017) and others on the side of the Saud family from which MBS wrested power after King Abdullah's death.

Mr Justice Bryan reduced GPT's fine, to £7.5m, largely because of "the involvement of Her Majesty's Government, including in facilitating arrangements giving rise to the offending conduct". Sixty years after the British government started flogging arms to Riyadh, a court had at last shown that its efforts were as bent as a nine riyal note.

Questions to answer
GOVERNMENT-sponsored corruption on a grand scale ought to prompt searching questions even after this length of time. Between 2002 and 2008, DESO was run by Alan Garwood on secondment from BAE Systems, where he is now the group's "business development director". Much of this "development" still involves the UK and Saudi Arabian governments, for example in the supply of billions of pounds worth of Typhoon fighters.

But first up before any inquiry would be the string of Labour defence secretaries: Geoff Hoon (1999-2005), John Reid (2005-06), Des Browne (2006-08), John Hutton (2008-09) and Bob Ainsworth (2009-10). Even in the wake of the Al Yamamah scandal and against the backdrop of repeated official commitments to stamp out bribery, producing what became the 2010 Bribery Act, they did nothing but watch the overseas earnings roll in.

Fox in a hole
EIGHT days after Ian Foxley reported the bribery to the MoD and fled Riyadh in fear of his life, the corrupt contracts were terminated. Had he kept quiet, the arrangement would probably have rolled on for decades. And his actions almost certainly had consequences beyond a single telecoms contract.

So, having exposed major corruption and official complicity, enabled prosecutors to recover £20m in ill-gotten gains while securing a rare and much-needed corporate conviction and, perhaps most importantly, proved the power of the whistleblower, what has become of Foxley? A statue at the SFO's Cockspur Street HQ?

Er, no: Foxley was hung out to dry. Inevitably he lost his job over his whistleblowing, but was unable to seek redress in UK employment tribunals that lacked jurisdiction. Rubbing salt into that wound, the SFO refused to place his victim's statement before the court two weeks ago, which would have enabled the judge to consider compensation, because the SFO considered it unclear whether his economic loss "was directly caused by a criminal offence formally investigated by the SFO".

The big lesson of the GPT saga might be that the time has come to reward, not punish, whistleblowers.

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