The Pergau Dam ‘Arms for Aid’ scandal

Introduction In October 1993, a controversy erupted in London over whether the Thatcher government had used UK aid subsidies as a sweetener to help UK defense firms secure export orders worth more than GBP 1 billion from the Malaysian military. The subsidies in question helped finance a 600-megawatt hydroelectric dam built in the early 1990s …

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Litton Industries’ Contracts with Greece and Taiwan

Introduction U.S. companies are often perceived to operate in a regulatory atmosphere less tolerant of foreign bribery than their European counterparts. Foreign bribery was criminalized far earlier than in other arms exporting countries, and commission payments must also be disclosed under export regulations. Nonetheless, U.S. firms have used agents in the past to secure business …

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Armor Holdings and the United Nations

Introduction In one of the rare cases where a payer of bribes went to prison, Richard Bistrong, a vice president for international sales at Armor Holdings (acquired by BAE Systems in 2007) admitted in 2010 to paying USD 200,000 to a UN official, via intermediaries, to win contracts for body armor, helmets, and other protective …

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CAS-Global Ltd. and the Private Nigerian Coast Guard Fleet

Introduction The 2012 sale of seven decommissioned Norwegian naval vessels took a curious turn when a report revealed that they were serving, two years later, in the private flotilla of a former Nigerian rebel. The news about the six demilitarized missile torpedo boats and one naval support vessel, the former KNM Horten, triggered an investigation …

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Funding the Belgian Socialist Parties

Introduction On July 18, 1991, the retired Belgian politician André Cools, an influential Socialist figure and former deputy prime minister, was shot to death by two assailants in the Cointe neighborhood of Liège. Through a series of confessions, the investigation into his death revealed two major arms procurement scandals involving the Flemish (Dutch-speaking) Socialistische Partij …

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The CDU Party Funding Scandal

Introduction The Christian Democratic Union (CDU) party funding scandal, which erupted in 1999, tarnished the reputation of legendary Chancellor Helmut Kohl—the architect of reunification—and derailed the career of his likely successor, Wolfgang Schäuble. German investigators caught CDU officials taking payments from an agent acting for Thyssen-Henschel, the armored vehicles manufacturer, to promote sales to Saudi …

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Airbus, the Saudi National Guard, and a Whistleblower’s Dramatic Escape

Introduction  If the bribery that is alleged to have taken place in the GBP 2 billion deal won by GPT Special Project Management to supply communications equipment to the Saudi Arabian National Guard (the SANGCOM deal) is fairly routine, the story of how it came to light is not. In 2010, a GPT Programme Director …

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Airbus Eurofighter Sales to Austria

Introduction Airbus’ checkered past has come under examination across a number of jurisdictions, but it may be one of the oldest allegations that brings down CEO Tom Enders. In 2003, Airbus’ defense group—headed up by Enders—sold eighteen Eurofighter Typhoon combat aircraft to Austria. Since then, prosecutors, parliamentary investigators, and the media have gradually confirmed what …

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Embraer’s Dominican and Indian Bribery Schemes

Introduction Brazilian company Embraer is best known as a leading producer of regional civil aircraft, but also builds and successfully exports military trainer/light combat and surveillance planes. The company’s global presence includes a U.S. subsidiary and the licensed production of the Embraer Super Tucano in the United States, from where sales are made to the …

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Glenn Defense Marine Asia and the US 7th Fleet (the ‘Fat Leonard’ scandal)

Introduction While high-value military hardware procurement programs feature most prominently as vehicles for corruption in this compendium, less visible but equally critical contracts are also susceptible to graft. A now-four-year scandal stemming from corrupt port services contracts has rocked the U.S. Navy’s Pacific operations, implicating officers and civilians up and down the ranks. Prosecutors determined …

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