CIAO DATE: 02/05/08
The National Interest
Arrested Development
Benjamin W. Heineman, Jr. and Fritz Heimann
Abstract
IN THE last 15 years, there has been growing recognition that corruption—including bribery, extortion and misappropriation—has a particularly insidious impact on developing nations. It distorts markets and competition, breeds cynicism among citizens, stymies the rule of law, damages government legitimacy and corrodes the integrity of the private sector. It is a significant obstacle to development and poverty reduction. It also helps perpetuate failed and failing states, which are incubators of terrorism, the narcotics trade, money laundering, human trafficking and other types of global crime. Despite strong reasons for addressing these issues, the developed world’s efforts to stop emerging market bribery by its own corporations have been uneven at best.
In one of the worst examples, Prime Minister Tony Blair announced in December last year that, for national-security reasons, the British government had stopped investigating bribery allegations involving British Aerospace Systems’ (BAE) lucrative Al Yamamah contracts for the sale of British fighter planes to Saudi Arabia.
According to news reports, several billion dollars may have been paid by BAE, the UK’s largest defense contractor, to members of the Saudi royal family to secure past and present fighter orders, quite possibly with the knowledge of the British government. Then–Attorney General Lord Goldsmith pronounced infamously: “It has been necessary to balance the need to maintain the rule of law against the wider public interest.”