Photographer: Waldo Swiegers/Bloomberg

SFO Stalls on Airbus Probe as U.K. Seeks Brexit Business

  • Serious Fraud Office last year was poised for charges in probe
  • Corruption Watch worried U.K.-Saudi ties may affect decision

U.K. prosecutors have stalled on their plan to bring charges in a bribery probe of Airbus SE’s GPT unit in Saudi Arabia, according to people with knowledge of the case, as anti-corruption campaigners raise concerns the five-year case could be threatened by Britain’s post-Brexit agenda.

The Serious Fraud Office told parties in the investigation nearly a year ago that it was seeking Attorney General Jeremy Wright’s consent to bring charges, according to two people who didn’t want to be identified because the discussions were private. No information has been provided since, the people said. The SFO would usually have a decision from Wright within a few months. Ex-GPT managing directors Jeff Cook and Malcolm Peto are among those under investigation.

Corruption Watch, a U.K. campaign group, raised concerns last month in a report that Britain’s desire to maintain good relations with Saudi Arabia after it leaves the European Union could affect a decision to proceed with a prosecution that may embarrass Saudi figures or the U.K. Ministry of Defence. The two countries signed a new military and security deal in September promising to increase cooperation.

The SFO opened its investigation into GPT Special Project Management in August 2012. At the center of the probe are allegations the Riyadh-based subsidiary paid bribes to win a 2 billion-pound ($2.6 billion) contract to provide services and training for the Saudi Arabian National Guard on behalf of the U.K. defense department. The SFO made arrests and questioned at least six individuals, including two employees from Britain’s MoD, in July 2014.

Lawyers for Cook and Peto declined to comment, as did a spokesman for the SFO.

Case Dropped

The SFO last year dropped its investigation into two other GPT employees, ex-Commercial Director Richard Moody and former Chief Financial Officer Laurence Bryant, people with knowledge of the decisions said in February.

"The headwinds in favor of a political intervention by U.K. authorities to prevent or limit GPT’s prosecution are strong," Corruption Watch said in its report, written by policy director Susan Hawley. "Post-Brexit, the U.K. is looking to countries like Saudi Arabia for trade deals and defense-related business, despite the inherent risks in trading with countries with high levels of corruption."

Shadow Attorney General Shami Chakrabarti wrote to Wright last week asking whether he’s sought any input from ministers on the public interest of pursuing the GPT case and to confirm the MoD has cooperated with the SFO probe, according to a copy of the letter seen by Bloomberg News.

Previous Probe

The Corruption Watch report stressed the importance of keeping politics out of any decisions on bringing charges after the BAE Systems Plc debacle in 2006. The SFO was forced to close an investigation over bribes allegedly paid by the arms maker to win defense work in Saudi Arabia when Prime Minister Tony Blair said charges might cause the Arab state to withdraw cooperation on intelligence, threatening national security.

The SFO only needs the attorney general’s consent to bring certain charges where, for example, a prosecution could impact issues such as national security. GPT was acquired by Airbus’s predecessor, European Aeronautic, Defence & Space Co., in 2007. EADS was renamed Airbus in 2014.

The concerns come as Saudi Arabia’s leadership is already in flux. Earlier this month 11 princes and 38 current or former senior officials were arrested on orders from a newly established anti-corruption committee headed by Crown Prince Mohammed Bin Salman. Among those arrested was Prince Miteb Bin Abdullah, head of the SANG. While efforts to curb corruption have been welcomed, it’s not clear how much the move may be driven by attempts to shift power to younger royals.

Whistle-Blower

The SFO started investigating GPT after whistle-blower Ian Foxley handed information to the agency in 2011 that allegedly showed the unit had made nearly 15 million pounds in irregular payments through offshore companies, according to Corruption Watch. GPT was also accused of supplying luxury vehicles to SANG staff. The payments are alleged to have been made just before the start of negotiations on the new $2.6 billion contract.

The SFO also has a second investigation into Airbus over allegations of fraud, bribery and corruption in its civil aviation business related to third-party consultants, opened last year. Airbus has said it is cooperating with the investigation, and the company may be eligible for a deferred prosecution agreement. Under such a deal, a company avoids prosecution in exchange for conditions that often include paying a fine.

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