BAE and South African government corruption cuts deep

Britain's PM Tony Blair would like to be remembered as a leader of a country with a ethical foreign policy. Why then has he tried to block investigations by Britain's serious fraud office into corrupt BAE dealings in Saudi Arabia?

And would he dare do the same for yet another BAE deal reported in 2003?

Britain's biggest weapons manufacturer, BAE Systems, paid millions of pounds in secret commissions to obtain a huge UK taxpayer-backed contract to sell Hawk jets to South Africa.

Blair - hawkish self interest

Mr. Blair says investigations into BAE's dealings should be blocked so British relations with countries like Saudi Arabia should not be ruined, not forgetting to add that he has to protect British jobs.

But the press has refused to drop this issue. The Guardian has rejoined the fight agianst BAE with evidence of their corrupt dealings in South Africa and elsewhere claiming last week:

The SFO is also pursuing its investigations into allegations that BAE made corrupt payments to politicians and officials in Tanzania, Chile, the Czech Republic and Romania....

But its the South African deal which is attracting the most scrutiny:

South Africa's airforce chiefs had selected Italian aircraft as cheaper and more modern, but the amended specifications shifted the balance in favour of the ageing British Hawks - at nearly double the price.

The Hawks are part of a £1.5bn package BAE and Saab put together to supply 24 Hawk fighter trainers and 28 Gripen light fighter aircraft to South Africa. Sources in the country say the request to the police indicates that the SFO investigation extends beyond the sale of the Hawk aircraft to the payment of bribes in South Africa and other developing countries.

So how much money are we talking about?
In the race to win contracts, BAE built a tangled web of relationships with South African officials, particularly Mr Joe Modise, the ex minister of defence who it is thought received at least £500,000's directly.

BAE acknowledges that it paid tens of millions of pounds in secret commissions to win the £1.5bn contract. The arms company originally intended to pay 12% of the contract price in commissions but agreed to cut that back to 7% - more than £100m - following questions from the British authorities underwriting the deal.

Modise also received more than $10 million from a German company to supply south Africa with sub-marines.

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