Airbus Unit Fined $39 Million After Corruption Guilty Plea
Airbus Unit Pleads Guilty to Corruption Over Saudi Contracts
(Bloomberg) -- A unit of Airbus SE was fined a total 28.1 million pounds ($39 million) after pleading guilty to one count of corruption as part of the U.K. prosecutor’s probe into work it carried out for the Saudi Arabian National Guard.
The Serious Fraud Office charged GPT Special Project Management Ltd. with corruption between 2007 and 2012 last year, which has since been reduced to a period between December 2008 and July 2010. The unit pleaded guilty and accepted both the 20.6 million pound confiscation order and a 7.5 million pound fine at a hearing Wednesday held at Southwark Crown Court. It was also ordered to pay 2.2 million pounds of the SFO’s legal costs within ten days.
The probe into contracts awarded to GPT for work carried out for the Gulf country was opened in August 2012. GPT is a U.K. company and subsidiary of Airbus that operated in Saudi Arabia and ended operations in April 2020.
‘History of Corruption’
The guilty plea “forms part of a history of corruption that had existed for a number of years, before and after the indictment period,” Judge Simon Bryan said in his sentencing Wednesday.
At the center of the prosecutor’s eight-year probe were allegations the Riyadh-based subsidiary paid bribes to win a 2 billion-pound ($2.8 billion) contract to provide services and training for the Saudi Arabian National Guard on behalf of the U.K. defense department. The case has been particularly politically sensitive because of the British government’s involvement and was delayed after the Attorney General sought external legal advice on the case.
“The SFO’s investigation related to contractual arrangements originating prior to GPT’s acquisition by Airbus and continuing thereafter,” an Airbus spokesperson said in a statement. Airbus’s “cooperation with the SFO and GPT’s acceptance of responsibility reflects a commitment to confront and learn from the mistakes of the past and build on the significant compliance reforms implemented.”
Government’s Knowledge
Judge Bryan said the government’s knowledge and involvement in the corruption began in the 1970s and extended as far as 2006 and possibly even into the indictment period.
A spokesperson for the U.K.’s defense ministry said it has a zero-tolerance approach to fraud, bribery and corruption and it expects all staff to stand up against unethical behavior.
“This is a stunning and hard-won victory for the SFO, after years of successive Attorney Generals sitting on this case for political reasons,” said Susan Hawley, executive director of Spotlight on Corruption. The transparency group has called for an urgent Parliamentary investigation into the defense department’s involvement in the scandal.
Airbus, in a letter to the court, expressed its wish to “draw a line under this historic wrongdoing,” Hugo Keith, GPT’s lawyer, said at Wednesday’s hearing. “This guilty plea will settle the SFO’s last remaining line of investigation into an Airbus company.”
The case won’t impact a separate agreement the European planemaker made with the prosecutor last year to settle bribery allegations. The company set aside 3.6 billion euros ($4.3 billion) as part of a deferred prosecution agreement following an investigation by authorities in the U.K., U.S. and France.
The charges in that case involved the use of intermediaries in securing jet orders, a practice that Airbus employed as it tried to reach parity with U.S. rival Boeing Co.
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