BAE’s £29.5m for education is an unsatisfactory conclusion to a case with much wider significance for the people of Tanzania
So BAE has finally paid out £29.5m for education projects in Tanzania. The payment was agreed two years ago, as part of a settlement with theSerious Fraud Office (SFO) that brought to an end the SFO’s investigation into a sale in 2002 of a $40m (£25m) military radar to the Tanzanian government. BAE admitted a failure to keep proper accounting records, relating in particular to a $12.4m payment to a Tanzanian middleman for “marketing” purposes, but avoided any admission of corruption.
The case has been closed, with some accountability for BAE and some reparations for Tanzania. But for many Tanzanians it leaves a bitter taste.
First, the settlement undermines the cause of bringing the final recipients of the $12.4m to justice. Tanzania’s attorney general at the time of the deal, Andrew Chenge, was the focus of SFO investigations. After Jersey bank accounts in his name were found to contain $1m, he resigned and shocked the Tanzanian public by describing this money as “small change”. The BAE settlement means the evidence against him will never be presented in a UK court. More recently, Chenge has claimed the closure of the SFO investigation confirms his innocence, though neitherthe settlement agreement (pdf) nor the judge’s sentencing remarks (pdf) made any such declaration.
Tanzania’s Prevention and Combating of Corruption Bureau (PCCB) had been working alongside the SFO on the investigation. When it was brought to a premature close by the BAE-SFO settlement, the Tanzanian investigations lost all momentum, as well as a rare opportunity to bring to court a suspect in a major corruption case. After the settlement was announced, a PCCB spokesperson said: “Evidence collected by [the] PCCB and SFO on corruption allegations in the radar deal has failed to link Mr Andrew Chenge with the allegations”.
The US embassy cables released by Wikileaks included a report from 2007 in which the PCCB head, Edward Hoseah, described senior Tanzanian politicians as “untouchable”, and reported that “his life may be in danger”. A US official noted that the fact the PCCB was taking the case seriously “may actually reflect the notoriety of the case in the UK”, and that “a fully developed case file, brimming with detailed evidence, was presented by UK investigators to the Prevention of Corruption Bureau”. When the SFO stepped back, however, the PCCB case dissipated.
Second, the payment made by BAE is problematic because it overlooks some of the key lessons about aid effectiveness learned by the aid industry over the past 20 years.
BAE has specified the money be spent on school textbooks and other educational equipment. But the Tanzanian government already had a responsibility to provide these things and had promised to do so. The payment from BAE effectively absolves Tanzania’s government of its responsibility to provide a quality education for the country’s people, thereby undermining its accountability to its citizens.
A payment for something that the government had already promised opens up the problem of aid fungibility. BAE’s payment for textbooks allows Tanzania’s government to reassign its textbook budget elsewhere. The amount spent on school equipment remains unchanged, but spending on something else – military hardware, perhaps? – increases.
The UK gives a lot of aid to Tanzania. Much of this is rightly focused on improving governance and accountability, including anti-corruption work. But the SFO has undermined these efforts in its hasty and ill-considered settlement with BAE.
“We are glad to have finally been able to make the payment to the government of Tanzania and bring this matter to a close,” BAE said. No surprise there. BAE would like nothing more than to draw a line under the episode.
The SFO is also happy. Its director Richard Alderman said: “It provides a satisfactory outcome for all concerned but most of all for the Tanzanian people.”
I beg to differ. There is no satisfactory conclusion for the people of Tanzania, where the investigation’s premature closure undermines the cause of justice and accountability. As Tanzanian media tycoon Reginald Mengi tweeted (in Swahili): “The radar money has been paid. Nobody has been prosecuted. They say there’s no evidence. Is the war on corruption just words?”
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Originally published on the Guardian’s Global Development site, March 20, 2012