BAE Systems, the U.S. Department of Justice and the U.K. Serious Fraud office Friday announced settlements in connection with legacy investigations.
The agreements will result in payment of a $400 million fine in the United States and about $47 million to the United Kingdom.
BAE issued a statement from Chairman Dick Olver on the settlement: “The company very much regrets and accepts full responsibility for these past shortcomings…These settlements enable the company to deal finally with significant legacy issues. In the years since the conduct referred to in these settlements occurred, the company has systematically enhanced its compliance policies and processes with a view to ensuring that the company is as widely recognized for responsible conduct as it is for high quality products and advanced technologies.”
Under the agreement with DoJ,–which requires court approval–BAE will plead guilty to one charge of conspiring to make false statements to the U.S. government in connection with certain regulatory filings and undertakings. The investigation involved deals in Saudia Arabia, Hungary, and Poland.
The company will pay the United States the $400 million fine and make additional commitments concerning its ongoing compliance.
“In 2000, the company gave a commitment to the U.S. government that it would establish and comply with defined U.S. regulatory requirements within a certain period and it subsequently failed to honor this commitment or to disclose its shortcomings,” Olver said in his statement.
Under the agreement with the U.K. Serious Fraud Office, BAE will plead guilty to one charge of breach of duty to keep accounting records in relation to payments made to a former marketing adviser in Tanzania. The company will pay an agreed penalty of about $47 million comprising a fine to be determined by the court with the balance paid as a charitable payment for the benefit of Tanzania.
“In connection with the sale of a radar system by the company to Tanzania in 1999, the company made commission payments to a marketing adviser and failed to accurately record such payments in its accounting records.,” Olver’s statement said. “The company failed to scrutinize these records adequately to ensure they were reasonably accurate and permitted them to remain uncorrected.”
BAE announced the Justice Department investigation was announced in June 26, 2007 and the U.K. Serious Fraud Office investigation announced Nov. 3, 2004.