Tanzania: another case of BAe corruption allegations

Corruption is major news today. No – not (just) the second arrest of Lord Levy, but the opposition debate on the stinking deal involving BAe (the alleged ‘briber’); the Government (who issued an export license for a military air traffic radar control system for Tanzania) and Barclays Bank who loaned Tanzania the money.

Basic story – BAe sell Tanzania this radar system which is far too expensive and sophisticated for Tanzania’s real needs, and yet only covers one third of the country. Price tag: a hefty £28 million.

Tanzania is one of the poorest countries in the world and a country to whom we are pouring in aid. So is this a sensible deal?

Barclays Bank appears to give them a loan on concessionary rates – as a commercial one would have too high interest and break the criteria imposed by the Government on granting export licenses for arms and military radar etc.

This all broke wide-open when two middle-men owed up to having been bribed $12 million in a Swiss Bank to see this deal through. Clearly this all stinks and that was my first debate leading on International Development for the Liberal Democrats. My colleague Norman Lamb had done a lot of work on this in 2002, so good steps to follow in! You can read my speech in Hansard.

This was a Tory Opposition Day motion, very narrowly defined so as not to stray into even more murky territory of the Al Yamamah arms deal with Saudi Arabia on which the Labour Government intervened to stop the Serious Fraud Office investigating corruption. The Tories did not want this mentioned as they were hopelessly compromised as the deal was struck when they were in power – and there is also the matter of the financial relationship between one of the middlemen on the deal and the Conservative party.

Of course Labour said it was right to have granted the license to export the traffic control system – but it is quite clear that this was not a kosher deal. So – we wait for the Serious Fraud Office to pursue its investigation all the way.