I wish I could say I was surprised that the MSM isn't covering this story, because it displays breathtaking incidences of corruption among the U.S.'s allies, attempts at the highest levels of government to silence important investigations, the utter indifference of Bush, Blair, et al to what their cronies in the business world and in their beloved House of Saud are doing, and why our soldiers will be the unwitting victims of this favoritism, cronyism, and corporatism.
I hope you'll bear with me because the facts of this situation are complex and I think, unfamiliar to most. The only reason I really know the details is because I'm a lawyer working extensively on international corruption, bribery, and money laundering cases. While this situation is complex, it plays out like sick political theater. I've included links to articles mostly in the British press, for more background information.
The Department of Justice has just launched what is potentially the largest corruption investigation in history, looking at $2 billion in bribes paid by British defense contractor, BAE, to Prince Bandar Bin Sultan (that's right, the surrogate Bush family son and former Saudi Ambassador to the U.S.). (See The Telegraph). BAE's bribes included $500,000 to send Bandar's daughter on her honeymoon. (See The Times London). The bribes were allegedly paid in connection with BAE's successful bid to acquire the al-Yamamah contract, allowing it to update Saudi Arabia's fleet of fighter planes. Britain's Serious Fraud Office (SFO) initially looked into these allegations, but Tony Blair, with help from British Attorney General Lord Goldsmith, forced the investigation to shut down because embarrassing the Sauds was bad for national security. (See Guardian Unlimited).
Despite SFO's decision to drop the case, the Department of Justice has picked it up. None of the players are Americans and the bribes didn't take place in the U.S, but the Foreign Corrupt Practices Act (FCPA) gives the DOJ very broad authority and jurisdiction to fight bribery and money laundering around the world. Since the bribe money at issue apparently passed through a U.S. bank, BAE used the implements of U.S. commerce in perpetrating the crime, giving the DOJ the jurisdictional 'hook' it needs to investigate.
In the middle of this rather unsightly imbroglio, BAE is pushing forward in its efforts to buy Lockheed subsidiary, Armor Holdings, for about $4.5 billion. Armor Holdings is a company that makes armor for military vehicles and BAE's interest in it stems from its desire to compete in the market for armoring U.S. military vehicles against IEDs. (See The International Herald Tribune). The deal must be approved by an inter-agency panel headed by the Treasury Department known as the Committee for Foreign Investment in the United States (or CFIUS). The purpose of the CFIUS review, known as the Exon-Florio process, is to ensure that the deal does not raise serious threats to American interests, including national security. (See The Financial Times). CFIUS is apparently poised to clear the deal, stating it poses no national security threats. (See Reuters UK). Undoubtedly, this had nothing to do with Bush's personal relationship with Bandar Bin Sultan - a man so close to the Bush clan they call him Bandar Bush. (See The Independent).
Before the deal is completed, the DOJ has to review it for potential anti-trust issues and Congress can block the deal, much like it did with Dubai Ports.
Now, perhaps people think that while BAE is a shady, creepy defense contractor in bed with the Saudis, this unsavory fact doesn't mean its purchase of Armor Holdings is a threat to national security. It's a threat to good business practices and honesty and decency, but not to our military preparedness. The Bush administration will certainly try to convince people the BAE-Armor Holdings deal is not a threat to international security and is just anti-foreign hysteria aimed at the Saudis.
That is decidedly untrue.
Under the Foreign Corrupt Practice Act (FCPA), the statute the DOJ is using to investigate the al-Yamamah deal, a party found guilty of violating the Act faces debarment from future government contracts. (See The DOJ FCPA Guidance). This means that a company found to have violated the FCPA can be prevented from bidding for any government contracts, including contracts to outfit our HUMVEES with armor. BAE and its new subsidiary, Armor Holdings, would not be able to provide the much needed armor that will keep American service men and women alive. There are other defense contractors that can armor a vehicle, but we've been told time and again that the Defense Department is moving as fast as it can to "up-armor" the vehicles. If that is the case, why would you remove one of the best contractors at armoring the vehicles from the competitive process by allowing it to be purchased by a parent company that can't bid on government contracts? This ban on BAE will apply just as strongly to its subsidiaries.
Either the Bush administration wants less armor or it wants to kill the DOJ investigation and prevent debarment in the first place. Even I can't attribute the first motive to the Bush administration. Assuming they did have that much animus toward American soldiers and Marines, they still haven't found any excuse not to award lavish contracts on defense companies. Besides, what would have been the point of fast tracking the deal through the Exon-Florio process if you planned on banning the resulting entity from competing for contracts? No, what I believe will happen is the administration will put the screws to the DOJ's career attorneys to drop the BAE investigation. It's bad for Bandar, therefore, it must be bad for America.
I believe the Bush administration is about to (once again) thwart the justice system, prevent an important investigation, openly reward bribery and corruption, and let the defense industry know that it isn't going to face any serious scrutiny for its activities because we can't risk the embarrassment to the Sauds. I'm not a defense expert, but I am pretty sure that less oversight for military contractors in the age of Haliburton is a bad thing, not a good thing. I'm also pretty darn sure that rewarding a company that has spent $2 billion bribing a radical extremist Muslim regime with sweetheart contracts is bad precedent.
Please, get upset over this. Get angry. Call your Congressperson and your Senators and let them know that the Armor Holdings deal must be stopped and the DOJ investigation must proceed.