Page last updated at 18:19 GMT, Sunday, 18 May 2008 19:19 UK

BAE bosses briefly quizzed in US

Tornado jets
BAE says it is in co-operating with American justice officials

Two executives of defence company BAE Systems were briefly detained when they landed in the US on business.

Chief executive Mike Turner and an unnamed senior colleague were spoken to when they arrived at Houston airport, and had electronic equipment examined.

US officials are investigating corruption allegations involving a huge arms deal between BAE and Saudi Arabia.

BAE, which denies any wrong-doing, said US officials served "a number of additional subpoenas" on employees.

The executives were not prevented from entering the US following the unexpected interruption on 12 May, and Mr Turner is now back in the UK.

Meanwhile, the US Department of Justice (DoJ) has approached the UK Home Office to formally invoke a procedure that seeks their help with the American investigation into BAE.

A Mutual Legal Assistance mechanism calls upon two countries to swap information that may aid an ongoing investigation by one or both.

The BBC's Joe Lynam has been told that Home Secretary Jacqui Smith is considering the request.

'Serious damage'

There have been accusations that BAE made multi-million-pound payments to help win an arms deal from Saudi Arabia - though all parties deny any wrongdoing.

The 43bn al-Yamamah deal was signed in the 1980s but continued into the 1990s.

It involved BAE selling Tornado and Hawk jets, as well as other weapons, and also included long-running maintenance and training contracts.

In the UK, in December 2006, the then Attorney General, Lord Goldsmith, announced the Serious Fraud Office (SFO) was suspending its inquiry into the deal, saying it would have caused "serious damage" to UK-Saudi relations and, in turn, threatened national security.

The High Court ruled recently that it was unlawful for the SFO to have ended the investigation into the deal. The fraud office has been given permission to appeal against the court ruling.

Liberal Democrat Treasury critic Vince Cable said the investigation should never have been halted.

"It is a national disgrace that in this country, a major criminal investigation was stopped following political interference in order to protect commercial interests," Mr Cable told the BBC's Bridget Kendall.

"Whereas in the United States, prosecutors are being allowed to get on with their job."

'Ongoing investigation'

The US justice department said in June 2007 that it was launching a probe to see if BAE's business deals "concerning the Kingdom of Saudi Arabia" complied with anti-corruption laws.

It is believed the Americans became interested because BAE used the US banking system to transfer regular payments to accounts controlled by Prince Bandar, a senior figure in the Saudi royal family, at Riggs Bank in Washington.

Following the detention of the two BAE executives, for 20 minutes on Monday 12 May, the company has put out a statement.

It says: "The company has been and continues to be in discussion with the DoJ concerning the subpoenas served in the course of its investigation."




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