Prince Bandar & BAE: " ... In numerous published reports, the company has been accused of bribing Saudi Prince Bandar with the U.S. equivalent of over $2 billion in pursuit of a 1985 $81-billion deal to supply the Saudi Air Force with fighter jets. ... "
Scandal-Wracked Weapons Manufacturer Big Spender on Capitol Hill
By Jeff Golimowski
CNSNews.com Senior Staff Writer
July 12, 2007
Washington (CNSNews.com) - A British weapons manufacturer under investigation by the Department of Justice for alleged corruption has been spending millions of dollars on Capitol Hill in lobbying and campaign contributions.
Cybercast News Service found that BAE Systems has, over the past 10 years, spent close to $30 million in lobbying and campaign contributions (through its affiliated political action committees), making it a top tier player in the Washington money game.
The British-based company is the largest defense company in Europe, with the U.S. equivalent of almost $28 billion in annual sales and over 88,000 workers. It is also among the ten largest U.S. defense contractors, and is actively building its business here by buying U.S. companies.
"They're a powerhouse, they are playing both the campaign contributions game and the lobbying game," said Sheila Krumholz, executive director of the Center for Responsive Politics, a campaign-finance watchdog group. "They are a sophisticated player."
In 2006 alone, the company spent more than $6 million and used more than a dozen different law firms and other entities to lobby Congress, according to Cybercast News Service's analysis of federal lobbying disclosure records. At the same time the company, through three different PACs, donated almost $400,000 to candidates, political parties, and other PACs.
"It's not the most -- there are others who are spending more," explained Krumholz. "But they're certainly among the top companies."
Unlike those other top companies, BAE last month had to announce that it is under investigation for allegedly violating U.S. anti-corruption laws. In a statement, the company said the DOJ has launched its investigation looking at the company's compliance in a variety of areas, "including the company's business in Saudi Arabia."
In numerous published reports, the company has been accused of bribing Saudi Prince Bandar with the U.S. equivalent of over $2 billion in pursuit of a 1985 $81-billion deal to supply the Saudi Air Force with fighter jets. Prince Bandar was the Saudi Ambassador to the United States from 1983 until 2005. He is now the Secretary General of the Saudi National Security Council.
British newspapers reported an investigation by Britain's Serious Fraud Office into the deal was shut down last December by former Prime Minister Tony Blair's government, who cited "national and international security concerns."
The BAE statement acknowledging the American inquiry came some six months after the British inquiry ceased.
"Most companies that are engaged in the making of political donations and lobbying are abiding by the letter of the law," said Krumholz. "[The investigation] perhaps does cast [BAE's] other contributions and lobbying in a different, harsher light, but I don't think campaign contributions and lobbying in and of themselves make a company suspect."
Officials with BAE Systems, Inc., the U.S.-based division of BAE's worldwide operations, defended the company's involvement in the American political system.
"We are a large company, not taking into account our foreign ownership, we are large by any measure," said Vice-President for Government Affairs Candace Vessella. "So we are participating in the political process as any large company would."
Vessella is listed in Federal Election Commission records as the treasurer of BAE Systems USA PAC, the company's most active PAC.
She pointed out that the company is among the largest foreign-owned companies doing business with the U.S. government and therefore needs to spend money to get its message across on Capitol Hill.
"Much like other companies who participate in the political process, it allows us to communicate with members of Congress who are making decisions about programs which affect our business," she said.
As for the Justice Department investigation, BAE's corporate communications officer, Susan Lenover, says the two issues are unrelated.
"The lobbying activity we're doing is in compliance with all rules and regulations," said Lenover.
BAE's campaign contributions and lobbying efforts are similar to those of other major defense contractors, including Lockheed-Martin and Boeing. Arms control experts say defense industry spending can lead to problems.
"If [defense contractors] didn't get influence out of this they wouldn't do it," said Winslow Wheeler, director of the Straus Military Reform Project at the Center for Defense Information. "They're not doing it because they like these guys ... they're doing it to buy access and to get influence."
Wheeler says that influence ends up harming the American taxpayer.
"The most pernicious thing that is happening is not that we're buying overpriced weapons systems, it's that we're buying irrelevant weapons systems," said Wheeler. "When Lockheed litters Congress with contributions for the F-22 ... the result is a fighter that's irrelevant to warfare today."
The F-22 "Raptor" Joint Strike Fighter is a controversial new fighter for which Wheeler says the Pentagon is paying $65 billion dollars. BAE is a partner in the design of that jet with Lockheed Martin and dozens of other defense contractors. Wheeler says it's unlikely the project would have survived without the massive lobbying efforts engaged in by arms manufacturers.
The Justice Department, in line with longstanding policy, would neither confirm nor deny the existence of an investigation into BAE's activities. BAE's Vessella says the company has no need and does not plan to change its practices on Capitol Hill.
(CNSNews.com Correspondent Katherine Poythress contributed to this report.)