SFO criticised as government report sheds light on “major flaws”

This entry was posted on Thursday, December 8th, 2011 at 12:22 pm

The Serious Fraud Office (SFO) faces criticism after a Parliamentary report, released on the 30^th November, questioned the organisation’s settlement practices following an investigation into serious fraud and corruption at BAE Systems.

The Wall Street Journal reports that BAE Systems, a British defence company, was required to pay £29.5million to the government of Tanzania as part of a settlement deal with the SFO in December 2010, bringing an investigation into serious fraud at the company to a halt.

However, the report claims that the poor drafting of this agreement led to a delay of 8 months before any payment was made. The money has now been placed under the control of the Department for International Development, who have taken over responsibility of its allocation.

According to the report, the SFO failed to specify how and when the money should be released, which allowed BAE to “drag its feet” and spend months arguing about the best way to disburse the funds. The Commons Select Committee that produced the report highlighted the “major flaws in the way the plea bargain with the SFO was arranged”, and called for an overhaul of the system to ensure tighter settlements in the future.

This report is another blow for the SFO, who have come into criticism for repeatedly failing to properly examine several allegations of corporate fraud and corruption at BAE Systems over a number of years. Their previous investigation was brought to a swift end following increased pressure from the government.

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