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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Fraudulent Contracts for Peter the Great Cruiser Overhaul

Introduction As Russia seeks to rearm and modernize its military, one of the biggest obstacles it faces is the endemic corruption throughout the military-industrial system, including the Ministry of Defense, the armed forces, and the arms industry. These issues are discussed in depth in the World Peace Foundation occasional paper “Corruption in the Russian defense …

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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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The Al Yamamah Arms Deals

Introduction The Al Yamamah series of arms deals with Saudi Arabia was, and remains, Britain’s biggest arms deal ever concluded, earning the prime contractor, BAE Systems, at least GBP 43 billion in revenue between 1985 and 2007, with further deals still ongoing. In 1985, the UK and Saudi governments signed an initial Memorandum of Understanding, …

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The Boeing Tanker Case

Introduction The U.S. defense acquisition system’s “revolving door” is legendary, but few cases of officials performing favors in exchange for post-retirement jobs have been successfully prosecuted. In 2004, a senior U.S. Air Force procurement official was arrested in a textbook example of revolving door corruption, landing not only herself but also senior executives from contractor …

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The Greek Submarine Scandal

See also: The Portuguese submarine deal Introduction The Greek military has consistently enjoyed strong fiscal support from the central budget much to the envy of its NATO peers and the consternation of Athens’ creditors. Since the end of the Cold War, military expenditure has never dipped below 2.3% of GDP; in the 1990s it hovered …

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German Submarine Sales to Portugal

See also: The Greek Submarine Deal. Introduction Submarine sales seem to be particularly prone to bribery. They are complex, once-in-a-generation (for most countries) purchases. Prices are difficult to compare in a meaningful way. Further, submarines offer most countries little practical military use in the 21st century security context. A stealthy, underwater vehicle, they also seem …

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Taiwan – The Lafayette Affair

Introduction In 1993, the body of a naval officer washed ashore in the small town of Suao, on the eastern edge of the island of Taiwan.[1] The resulting investigation led to the unraveling of a corruption scandal which continued for 19 years and implicated hundreds of millions of dollars in restitution. Yin Ching-fen, the officer …

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