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U.K. Prosecutors Say 2010 BAE Bribeery-Probe Data Lost

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Aug. 8 (Bloomberg) -- The U.K. Serious Fraud Office said it accidentally lost evidence from an investigation into BAE Systems Plc, including 32,000 pages of documents and 81 audio tapes.

The information was from a six-year bribery probe into the defense company that ended with a 500,000-pound ($776,000) fine for accounting irregularities in 2010. The SFO, which has to return data after finishing investigations, sent the material to the wrong source, which it didn’t identify, the agency said in an e-mailed statement today.

“Any loss of data is a serious matter and the SFO has taken action to ensure no further material can be wrongly sent out,” it said.

The SFO has faced frequent criticism for its mistakes, from a dropped investigation into U.K. property investors Vincent and Robert Tchenguiz over errors in obtaining search warrants to a scandal over payouts to former executives. A report by British lawmakers in July said errors and poor judgment at the agency had damaged morale.

“This latest debacle will do little to restore public confidence in the SFO,” Andrew Smith, a criminal defense lawyer in London, said in an e-mail. “It underlines the fact that the SFO needs radical internal reform in order to become a world-class prosecuting agency.”

Tanzania, Czech Republic

BAE Systems pleaded guilty in 2010 to not keeping proper payment records from deals. The defense company had been under investigation over alleged bribes paid in six countries, including Tanzania and the Czech Republic. The lost data accounted for 3 percent of the total information used in the SFO probe, the agency said. It has recovered 98 percent of the lost material and said none of the information related to national security.

“We were concerned to hear of this unfortunate incident but understand it has now been dealt with by the relevant authorities,” BAE said in an e-mailed statement. “Ultimately, this is a matter for the SFO and as far as BAE Systems is concerned it is now closed.”

The SFO said it conducted an internal probe into the data loss and has started an independent review of its systems led by Alan Woods, a former government official. The evidence was accidentally sent between May and October last year, the agency said.

To contact the reporters on this story: Kit Chellel in London at cchellel@bloomberg.net; Ben Moshinsky in London at bmoshinsky@bloomberg.net

To contact the editor responsible for this story: Lindsay Fortado at lfortado@bloomberg.net

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