Serious Fraud Office – serious law-breakers!

Today’s News Line editorial:

The needs of profit making are a higher morality than bourgeois law
THE High Court yesterday ruled that the Serious Fraud Office (SFO) acted unlawfully by dropping a corruption inquiry into a £43bn Saudi arms deal.

Since the Office had been directed by the then Prime Minister Tony Blair, and his Attorney General Lord Goldsmith in this matter, the implication of the judgement is that the Prime Minister and the Attorney General both broke the law and should pay the price for doing so.

Goldsmith and Blair both maintained that the continuation of the inquiry into allegations that BAE Systems paid hundreds of millions of pounds in bribes to members of the Saudi Royal family to secure a major military contract, would have caused ‘serious damage’ to UK-Saudi relations and, in turn, threatened national security, and thousands of British jobs.

It is alleged that the Saudi monarchy threatened the British government with the cancellation of the contract should the inquiry go ahead, and that they might look the other way if they came across an Al-Qaeda plot to attack British interests.

Yesterday, the Judiciary allowed the challenge made by Corner House and the Campaign Against Arms Trade (CAAT) with Lord Justice Moses, saying that the director of the SFO had failed to assure them that everything had been done to meet the rule of law and that ‘No one, whether within this country or outside, is entitled to interfere with the course of our justice.’

He added: ‘It is the failure of government and the defendant to bear that essential principle in mind that justifies the intervention of this court.’

For its part, the Serious Fraud Office said it had no further comment, but was ‘carefully’ considering the implications of the judgement.

Enthusiasts of the bourgeois law will now be expecting the Serious Fraud Office to reopen the inquiry, while it passes a file to the Metropolitan Police and the Director of Public Prosecutions to investigate the issue and see whether the Crown should take action against Blair and Goldsmith.

Indeed there is a case for alleging that the very religious Blair and his supporter Goldsmith are repeat offenders, since both were involved in the declaration of an illegal war against Iraq, after Goldsmith finally gave the legal advice that an aggressive war on Iraq was legal, despite the fact that it was not supported by the United Nations.

However it will not be very long before we obtain more proof that, as the cases of the war on Iraq and the dropping of the serious fraud inquiry into the BAE deal prove , the needs of the bourgeoisie to make super profits, and allegedly to give bribes to be able to do so, make for a higher and more vital form of bourgeois morality than the strictures of bourgeois law.

There is not the slightest chance of the Serious Fraud Office reopening the inquiry into the alleged bribes given to the Saudi Royal Family.

Neither is there the slightest chance of Blair and Goldsmith being arraigned as repeat offenders as far as the bourgeois law on fraud and war are concerned.

The more likely alternative is that the House of Commons will pass legislation that will retrospectively clear those that are being accused of law breaking.

As far as the bourgeoisie is concerned – while bourgeois law can hold sway as a source of debate, and as some sort of surface decoration for profit hungry capitalism – without bribery and corruption of all kinds, world trade and the bourgeois order would grind to a halt.

The battle cry will go up to the learned judges, ‘Get Real,’ while the more religious participants in the drama will go to their parish priests for confession and then absolution, before carrying on with the work in hand.

Capitalism is a very dirty business, and it will take more than a few judgements to clear the muck out of its Augean stables. In fact, this task requires a socialist revolution.

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Bliar’s Catholicism non-story trumps BAE revelations

Yes, it’s official.

Bliar’s become a Catholic. Not a great surprise, it’s a shame he didn’t have the balls to convert years ago.

Confession’s going to be difficult, isn’t it? He’s not one for being honest.

Take the inquiry into BAE Systems’ alleged corruption:

The Grauniad’s reporting that newly released documents prove that he pestered the attourney-general Lord Goldsmith to call of the inquiry, then claimed it was not about the big bucks, but national security.

New Liberal leader “Dick Cleggeron” – who recently came out as atheist – is calling for an official inquiry into the whole thing.

The BAE deal, I mean, not Bliar’s Catholicism.

Anyhow, since it seems to be the season for coming out, here’s one of my friends…

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The home secretary’s obstruction of justice over corruption inquiry

[Friday]

Someone’s obstrucing a criminal investigation.

Who could it be?

Well, it’s definitely not that new (ish) Home Secretary, Jacqui Smith, who is in charge of this sort of thing. We can rule her out, can’t we?

Oh, no. Actually, it is her.

British ministers are refusing to cooperate with the US criminal investigation into allegations of corruption against BAE, Britain’s biggest arms company, the Guardian can disclose.
More than two months after an official request for mutual legal assistance (MLA) was received from Washington, the home secretary, Jacqui Smith, has not yet allowed it to be acted upon. The US investigators believe the British are being obstructive.

But legal sources said yesterday that the inquiry team had not been deterred by the UK government’s hostile attitude. Some have already begun taking statements from key British witnesses.

How awkward. And King Abdullah’s visiting next month…

The formal request for assistance came from the US department of justice earlier in the summer, but Ms Smith has refused to pass it on to the Serious Fraud Office for processing in the normal way.

This is unusual behaviour towards a major ally, with whom legal cooperation is normally automatic. Last night, the Home Office said its failure to pass on the request was “not unprecedented”, but could not give any example of similar behaviour.

It’s not often that the British government refuses to co-operate with the US authorities. In fact, I think this is a first.

I wonder if the UK government will similarly refuse to co-operate with the US government in the coming war with Iran?

The SFO possesses important files on BAE gained from its own major inquiry into £1bn of payments to Prince Bandar of Saudi Arabia and other Swiss bank accounts linked to the Saudi royal family. But SFO investigators are not allowed to speak to US authorities until Home Office officials forward the paperwork.

The agency was forced to halt a criminal investigation earlier this year by the then prime minister Tony Blair, who said it threatened the national interest and was upsetting the Saudi regime.

National interest had to be the excuse, not “British jobs” (which we know the government doesn’t care about). Supposedly the Saudis would allow terror attacks to take place in the UK or against British forces in the Middle East…

Last week, Saudi Arabia signed a fresh arms deal with Gordon Brown’s administration worth up to £20bn for BAE’s Typhoon aircraft.

The Saudis had been threatening to withdraw from the contract.

The real motive for obstructing justice?

The government wants to secure BAE’s profits; it is the servant of big business. That’s why New Labour has kept secret the details of Thatcher’s al-Yamamah deal and is rather coy about when and where the latest deal took place. As for British jobs, a majority of the work will take place in Saudi Arabia. State monopoly capitalism, y’all.

Not all of BAE’s shareholders are happy at what’s going on, mind:

A fresh front against BAE was opened yesterday, when shareholders in the US launched a multimillion dollar lawsuit against the company’s directors accusing them of corruption. A spokesman for BAE, which is 50% owned by US shareholders and holds lucrative contracts with the Pentagon, said: “The company intends to vigorously defend any such proceedings.”

Prince Bandar, who is also named as a defendant, has not denied receiving cash and a free gift of an aeroplane, but he says it was for legitimate purposes.

Other defendants named in the US suit include former Conservative defence secretary Michael Portillo, who was given a post on BAE’s board after helping negotiate an arms deal with Qatar; Sir Nigel Rudd, who recently joined BAE’s board as a non-executive director; and Sir Dick Evans, the original architect of the £43bn al-Yamamah arms deal at the centre of the allegations.

The Washington claim has been made in the name of a small pension fund, the City of Harper Woods employees’ retirement system, which only holds the equivalent of 14,000 BAE shares, less than 1% of the company’s stock. But it is intended that other US shareholders will join in.

The suit claims that BAE’s directors have wrecked the company’s reputation and exposed it to heavy fines and penalties, by conniving at “improper and/or illegal bribes, kickbacks and other payments”, while claiming all the while in public that BAE was a “highly ethical, law-abiding corporation”.

Greenspan spills the beans on Iraq and the UK economy

[Monday]

I know Alan Greenspan has a book out, but telling the truth like this is indecent:

the former head of the US Federal Reserve, says oil was the primary motive for the Iraq war.

Mr Greenspan, one of America’s most respected elder statesmen, said it was politically inconvenient to acknowledge the fact.

No shit. This result of that political inconvenience was hardly splashed across the front pages of all of the newspapers last week:

The British polling agency ORB reported Thursday that the death toll in Iraq since the 2003 US invasion has passed the one million mark.

According to ORB, US-occupied Iraq, with an estimated 1.2 million violent deaths, has “a murder rate that now exceeds the Rwanda genocide from 1994 (800,000 murdered),” with another one million wounded and millions more driven from their homes into internal or external exile.

But wait, there’s more from Greenspan:

The 81-year-old economist, an adviser to Gordon Brown, insists that the recent increases in house prices – particularly those in London and the South East – are unsustainable.

“There are going to be some difficulties,” he has said in an interview with The Daily Telegraph. “Can [the boom] last? No.

“You’re already beginning to see the mortgage rates are moving, a lot of the two-year fixes are beginning to unwind, and the teaser rates are going,” he adds, referring to mortgages where rates jump after an introductory period.

He says that banks are already being forced to write off billions of pounds of debt.

“It’s going to turn, it’s got to turn,” he warns.

Mr Greenspan also believes that Britain is more vulnerable to the effects of the credit crunch than the US.

“Britain is more exposed than we are – in the sense that you have a good deal more adjustable-rate mortgages,” he says, referring to the standard variable rate loans that many households have chosen over fixed-rate deals.

More exposed?

Apparently so:

As Charles Dumas of Lombard Street Research put it: “Britain is threatened by its position as globalisation’s epicentre. Any seize-up of global financial markets affects London and the British economy more than any other. Lower real incomes combined with tight monetary conditions, and the overhang of a very high exchange rate, could hammer growth during 2008.”

And as for that run on Northern Rock

Chancellor Darling had told the BBC’s Radio 4 Today programme that the money of Northern Rock depositors was safe.

‘If people want to get their money out of Northern Rock bank, they can do it. The money is there and it is backed by the Bank of England so they can get it,’ he said.

Savers took him at his word and got their money out of the bank while it was still there.

Chancellor Darling and Prime Minister Gordon Brown met US Treasury Secretary Hank Paulson yesterday afternoon to discuss Paulson’s concerns that a de-industrialised Britain, whose City of London has an inflated economic importance, was far more vulnerable to the threat of financial collapse than was even the United States.

The meeting came after a grim warning given to the Daily Telegraph by the ex-Federal Reserve Bank chairman, Greenspan.

He warned that inflation would double in Britain in the coming years and that the Bank of England was heading for a double digit interest rate as in Black Wednesday 1992.

This was when hundreds of thousands of homeowners were savaged in the aftermath of a massive run on sterling that forced it out of the EU Exchange Rate Mechanism.

Greenspan’s remarks were on the eve of today’s decision by the US Federal Reserve bank Chairman Bernanke, whether to cut its interest rate as is being demanded and risk a run on the dollar, or keep it as it is and see further mortgage bank collapses.

The two British banks who were interested in acquiring the beleaguered Northern Rock bank have meanwhile got cold feet after they were overcome by their fears about doing such a dodgy deal amid such chaos in the money markets.

They also found that raising money from other banks and financial institutions proved to be impossible.

Meanwhile, the London stock market was 106 points down at 1 pm yesterday, with share prices falling by £25 billion.

Banking shares have fallen across Europe, but none as bad as Northern Rock, which is sure to slide again tomorrow, despite the government guaranteeing all savings (alas, this has no legal substance).

Bad news for the six thousand employees of Northern Rock whose jobs may sink with the bank. Staff are facing added pressure as a result of frustrated customers.

And what of the (mainstream) politics of this crisis?

Conservative leader David Cameron has said the government has mishandled the crisis, arguing that the chancellor’s appeal for banks to lend responsibly had come too late.

“The government has presided over a huge expansion of public and private debt without showing awareness of the risks involved,” he told the Sunday Telegraph.

Liberal Democrat treasury spokesman Vincent Cable, speaking at the party’s conference in Brighton, said: “The British economy may have been reasonably successful but it is also highly fallible.

“The house that Gordon Built may not be built on sand but it has certainly been built on a floodplain.

“The water is now pouring through the defences after the near collapse of Northern Rock; a product of greed and reckless gambling by overpaid executives; lax, indulgent bank regulation; and a complacent government. I warned Gordon Brown of a looming debt crisis four years ago.”

First of all, New Labour has been doing what the Tories started, in terms of financialisation and de-industrialisation, and the Liberals have colluded with Labour for years…

Good news for BAE, however:

Saudi Arabia is to buy 72 Eurofighter Typhoon jets BAE Systems, the Ministry of Defence (MoD) has confirmed.

The deal is worth about £4.4bn but contracts for maintainance and training are expected to take the bill to £20bn.

The Serious Fraud Office (SFO) dropped a probe last year into a sale of jets to the Saudis in the 1980s.

The UK government said this was on national security grounds, but reports said the Saudis had threatened to pull out if the probe went ahead.

And as if to prove that it’s all about profits, the jets will apparently be built for the most part in Saudi Arabia… so much for the claims about “British jobs”.

Credit crunching and war profiteering

So, the markets have had the jitters again, what with the credit crunch fears – or mortgage concerns, as it is polite to call them – and the European Central Bank has intervened in the banking sector:

The latest trigger for the slump was an announcement by French bank BNP Paribas that it was suspending three investment funds worth 2bn euros (£1.35bn) because of problems with the US sub-prime mortgage sector.

Sub-prime lenders offer loans to consumers with a poor credit history.

In recent months, the number of loan defaults has increased because of higher interest rates, raising concerns that the wobble in the housing market will affect other parts of the economy and then start hurting other nations.

The worry is that should banks make losses then it would hurt their earnings and their profitability making them less willing to fund the takeovers and buyouts that have underpinned much of the stock markets’ recent gains.

[…]

At the same time, banks have suddenly started charging significantly more for the money they lend to each other, signalling that they are looking to limit their risks, analysts said.

In response, the European Central Bank (ECB) said on Thursday that it had pumped 95bn euros into the eurozone banking market to allay fears about a credit crunch and lack of liquidity.

The move represented the ECB’s single largest intervention in the banking sector since the immediate aftermath of the 9/11 attacks on the US in 2001.

Calling it a “fine-tuning operation”, the ECB made the money in the form of loans, an offer taken up by 49 banks and other financial institutions.

In the US, the Federal Reserve, also was reported to have taken similar action, pumping about $24bn (£12bn) into the US banking system.

Analysts said that a credit crunch – when it becomes harder for banks, companies and consumers to get access to loans and cash to run their operations – was a serious occurrence that could lead to a recession.

[…]

Speaking after a meeting with his top economic advisers, President Bush acknowledged there had been “disquiet” on Wall Street over the housing slump.

Good news for the war profiteers, though:

Work to re-equip UK and US troops in Iraq and Afghanistan has helped profits to soar at defence group BAE Systems.

The UK’s largest defence firm, BAE made a pre-tax profit of £657m ($1.4bn), compared with £378m a year earlier.

BAE said the “high tempo” of UK and US military operations was increasing demand for land systems to support armed forces overseas.

BAE, which is facing an anti-corruption probe by US authorities, saw its half-year revenues rise by 10%.

The firm said its sales had benefited from its US operations, which achieved organic sales growth of 12% during the period.

Overall sales at BAE’s Land & Armaments business, which includes everything from tanks to munitions, rose 43%.

Corruption scandal

BAE is facing accusations of illegal payments to secure military orders from Saudi Arabia, although the company denies any wrongdoing.

While an investigation by the UK’s Serious Fraud Office was halted in March after the government said it would harm national security, the US Department of Justice is moving ahead with its own inquiry.

Last month, BAE greatly expanded its US operations through the £2.2bn takeover of US military manufacturer Armor Holdings.

Armor is a leading manufacturer of mine-resistant armoured vehicles – thousands more of which are due to be bought by the Pentagon for use in Iraq.