Case Against BAE Systems in the Context of the Foreign Corrupt Practices Act – Case Study Example
The paper "Case Against BAE Systems in the Context of the Foreign Corrupt Practices Act" is a good example of a case study on the law. It was legislated by the congress in 1977 with an aim of preventing influential government officials, heads of state, multinational businesses and officers in influential government positions form getting involved in fraudulent and unethical international transactions. The accounting provisions that are set out under the FCPA only apply to issuers mandated to keep accurate records that reflect all transactions. Accuracy of records is important in reflecting the various assets’ dispositions. In this regard, anyone company remains liable if it deliberately or intentionally omits bribery and illegal transactions’ records in its records. The liability also applies to the omission of improper payment details or disguised transactions in its records. The Act also provides that issuers shall remain liable for any unaccepted acts committed by their immediate subsidiaries. These include improper transactions made by the subsidiaries.
The case against BAE Systems
The BAE Systems, a global company involved in the development, delivery, and support of advanced defense, security and aerospace systems, and with its headquarter in the U.K. is one that has committed foreign corrupt practice and is under investigation. It violated all the accounting provisions as prescribed by the FCP Act. Investigations launched in 2008 are currently ongoing by the department of justice. The company’s case involves a series of fraudulent transactions on international arms contract amounting to nearly $81 billion.
Also included in the investigation is to disclose fraudulent deals that preceded the acquisition of a fighter jet involving BAE Systems, the U.K. and Saudi Arabia. At the forefront in masterminding the series of briberies and frauds was Prince Bandar bin Sultan, the then U.S. ambassador to Saudi Arabia. He was a close ally of President Bush and had close political and diplomatic relations with the U.K. he was tasked with the responsibility of getting a new fighter jet for the Saudi forces to be used, in 1985.
Together, with Ronald Reagan and Margaret Thatcher, Prince Bandar organized to acquire arms from the U. K. British Aerospace was to be the l subcontractor that was to supply Saudi government with the aircraft and arms through a deal dubbed al Yamamah. By sealing the fraudulent deal, BAE rewarded Bandar’s friends and families with gifts. BAE’s top management justified their rewards to the Saudi government by offering travel services and honeymoon to the Saudi royal family. Prince Bandar also received a new airbus reward from BAE. The illegal transactions made to the Swiss bank account amounted to billions of US$. The investigations further revealed fraudulent transactions by the company to South Africa and the Czech Republic. The investigation received political setback when Prime Minister Tony Blair stopped the investigation owing to the possibility for the economic setback. However, Prince Bandar and the Saudis are not eligible for charges under the FCP Act. It only applies to BAE that violated its accounting provisions
Forensic accountancy in the case against BAE Systems
Several measures would be applicable for a forensic accountant to investigate the case of BAE systems. Prosecution of all parties involved in fraudulent winning of tenders is an applicable measure. Proper auditing of all transactions conducted by BAE and Saudi officials would provide necessary during the investigation cases. Investigation of questionable payments during the contracts requires proper analysis of transactions made in other countries. Countries such as South Africa and Switzerland allegedly allowed operations of foreign accounts during the payments. Conspirators during the payments should undergo vetting to analyze available data and information relevant to the case.