‘False Accounting’ Plea By British Arms Giant May Implicate Former Chilean Dictator

[Judi Lynn]

‘False Accounting’ Plea By British Arms Giant May Implicate Former Chilean Dictator
Written by James Fowler
Tuesday, 09 February 2010 05:21
US$800 million plea bargain prompts Chilean authorities to seek more information on BAE payments given to Pinochet


Chilean authorities investigating bribery and embezzlement charges against former dictator Gen. Augusto Pinochet hope a plea bargain agreement between British arms manufacturer BAE systems and judicial authorities in the U.S. and U.K. will provide them with fresh evidence.

Local press reported that Chilean investigators hope to receive information from colleagues based abroad as they investigate BAE payments made to Pinochet, who ruled Chile from 1973 to 1990 as head of a military dictatorship. Pinochet was also Army Commander-in-Chief between 1990 and 1998 and served as Senator-for-Life.

The reports come after BAE reached separate agreements last Friday with the U.S. Justice Department and Britain’s Serious Fraud Office admitting charges of false accounting. The charges relate to payments made by the company to military officials in various countries then considering BAE contracts.

The firm agreed to pay fines to both authorities totaling over US$800 million rather than face further investigations. BAE expressed “regrets” over the issue and accepted “full responsibility for the shortcomings” in a statement on their website.

Last January, Chile’s State Defense Council announced an investigation into payments made by BAE to Pinochet while the former dictator led Chile’s military in the 1990s.

A 2004 report by London based newspaper The Guardian suggested that Pinochet received a US$2.5 million payoff from BAE subsidiary Royal Ordinance in 1997. The payment was part of an attempt to lobby Pinochet into the purchase of BAE missile systems (ST. Dec 19, 2004).

This payment is one of several similar deals by which Pinochet is alleged to have amassed a private fortune at the expense of the Chilean state. A 2005 supreme court investigation found that Pinochet held around US$26 million in private off shore accounts, much of it held with the Miami-based Riggs Bank.

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