Fraud Office hires top QC to turn up heat on BAE

The Serious Fraud Office (SFO) has ratcheted up the pressure on BAE Systems by hiring Timothy Langdale, a top criminal QC, to help submit a corruption case to the attorney-general within three weeks.

Senior legal sources say the SFO is also considering helping America’s Department of Justice broaden its inquiry into BAE to include contracts in Africa and central Europe.

The SFO is understood to have pulled resources off other cases in an attempt to force a quick result over BAE. It has set an internal deadline of the end of the month for presenting its case to Baroness Scotland, the attorney-general, who will decide whether a prosecution should be launched.

The hiring of Langdale, the early case deadline and the hint of further contact with the Americans are seen as fresh attempts to force BAE into accepting a plea bargain deal over allegations of bribery.

BAE, which has always denied any wrongdoing, has faced years of scrutiny from the SFO.

In 2006, the SFO controversially abandoned its investigation into Al-Yamamah, a deal in which Britain sold arms to Saudi Arabia, with BAE as the main contractor. Arms traders accused the SFO of bowing to political pressure.

The SFO has continued, however, to investigate BAE deals in South Africa, the Czech Republic, Romania and Tanzania.

In April it began talks over a plea bargain — whereby the company would pay a fine and admit a lesser offence than bribery.

The talks broke down 10 days ago, with the two sides unable to agree either the wording of the plea or the amount to be paid.

The Sunday Times revealed last week that BAE’s directors had been told by their legal advisers, Allen & Overy and Linklaters, that the SFO did not have sufficient material to justify its demand for several hundred million pounds and that if BAE complied it might open itself to lawsuits from shareholders for misuse of funds.

The prospect of further involvement by American prosecutors could worry BAE, however. The Department of Justice is already examining the Al-Yamamah contract — without the help of the UK government, which has declined requests for assistance — but is understood to be keen to widen the probe to include other deals in Africa and Europe.

Legal sources say the SFO has resisted American involvement in the second set of contracts, but may reconsider its stance. The SFO declined to comment.

Defence industry insiders believe the manoeuvring will eventually lead to a deal. “Neither side wants a trial, which would last years and could be damaging to both sides,” said one source.

Langdale, a former Treasury counsel, is regarded as one of Britain’s top criminal QCs and has featured in many prominent fraud trials. He recently represented Mabey & Johnson, the construction group, when it agreed to pay £6.5m in fines and reparation to settle bribery charges brought by the SFO.