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28 May 2011 1 the UK Arms Trade Complex and Freedom

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28 May 2011 1 the UK Arms Trade Complex and Freedom 28th May 2011 The UK Arms Trade Complex and Freedom of Information A case for an enhanced presumption of transparency in the case of corruption in arms deals Barnaby Pace 28th May 2011 Abstract The trade in arms is thought of by many states as a key factor in the maintenance of their national security. This is true in either selling arms abroad or procuring weapons and equipment for use by national forces. Sadly however, the arms trade is one of the most corrupt businesses on earth, accounting for forty percent of all corruption worldwide according to one estimate. The purpose of the arms trade is to create weapons with the power to kill and maim, and with this the consequences of corruption are especially destructive. The prevalence and extreme danger of corruption in the arms trade justifies a greater level of transparency and accountability. However governments have long considered the arms trade to be essential to national security and too often regard anti-corruption efforts as a threat not only to their arms production capacity but also their security and international relations. This threat to international relations is itself premised on the perception of national security being dependent on military or intelligence co-operation with other countries founded, which in turn is founded on arms deals. Arms deals have become seen as a legitimate and unquestionable diplomatic tool whether the arms are sold corruptly or not. This paper examines three disputed cases around the British governmental involvement in the sale of arms and associated services to the Kingdom of Saudi Arabia. The sale of arms to Saudi Arabia has long been associated with deep systemic corruption and the support of an oppressive dangerous regime. In all three cases campaigners against the arms trade and corruption attempted to reveal information potentially implicating the UK government in support for corruption in Saudi arms deals over the last 40 years. The results of these cases varied but arguments of national security deployed by the government allowed the case for an overriding public interest in transparency to be put forward. I argue that there is a compelling case for a principle of presumptive disclosure of information regarding corruption in the arms trade. Barnaby Pace is an independent researcher on the arms trade, corruption and militarism. 1 28th May 2011 Suggested principle The following categories of information are subject to presumptive disclosure: (i) Information concerning constitutional or statutory violations and other abuses of power, including corruption, by public authorities or officials. (ii) Concerning contracts (including for sale, purchase, procurement or service) relating to weapons, military equipment and material, as well as military transports (including ships, planes, vehicles) - (A) information on the use of, and payments to or from, any agents or other third parties involved in transactions with, or supported by, public authorities; (B) information on any commissions paid to public authorities, government officials, elected representatives, or their close relatives by any parties to such a contract; (C) information on the receipt of monies, shares or other benefits accruing directly or indirectly to any elected representative or government official from any party to such a contract. “There was no reason for a commission payment to be concealed if it was entirely proper.”1 Legal advice sent to Government auditor Sir Douglas Henley in 1977. Marked Confidential. Not for Exchequer and Audit Department Eyes. The arms trade is particularly susceptible to corruption. The size of the contracts involved, the relatively few officials involved in making a choice between competitors, and the secrecy justified by security concerns create the perfect conditions for corruption to thrive. The arms trade is thought to account for 40% of worldwide corruption. For an industry that accounts for around 0.5% of world commerce this is an extraordinary statistic2. Though there is no official, widely-agreed definition of corruption, indeed most international agreements on corruption fail to define the term precisely. The respected NGO Transparency International does however give a rigorous definition that I have adopted, though with one caveat. ‘Corruption is operationally defined as the abuse of entrusted power for private gain. Transparency International further differentiates between ‘according to rule’ and ‘against the rule’ corruption. Facilitation payments, where a bribe is paid to receive preferential treatment for something the bribe receiver is required to do by law, constitute the former. The latter, on the other hand, is a bribe paid to obtain services the bribe receiver is prohibited from providing.’3 While an impressive definition, I would expand our understanding of corruption to include the act of corrupting, which could be defined as offering or giving any inducement that may or does in fact 1 Letter from A.D. Osborne, Treasury Solicitor, to John E. D. Street at the MoD, 21/2/1977, published on the Guardian, BAE Files, “BAE in Saudi Arabia”, http://image.guardian.co.uk/sys- files/Guardian/documents/2007/05/29/ch05doc05.pdf retrieved 16/2/2010 2 This figure was calculated by Joe Roeber in his work for Transparency International, Roeber appears later in this paper as a witness in the Gilby case. Roeber, J., 28/8/2005 “Hard-wired for corruption: the arms trade and corruption”, Prospect, no. 113 3 Transparency International: Frequently Asked Questions, www.transparency.org/news_room/faq/corruption_faq 2 28th May 2011 result in undue advantage. This highlights that successful conspiracies of corruption involve two or more willing participants and that all parties, be they purveyors or recipients of such inducements, should thus be considered corrupt. The factors that contribute to the predisposition of the arms trade to corruption include: a) The secrecy and deference given to the issues of national security and commercial confidentiality. b) The intimacy of arms buyers, suppliers and their brokers. This relationship is also sustained due to the supply of spare parts and services that accompany so many arms deals for many years. c) The sophistication, fragmentation and in many cases opacity of global production, transportation and financial networks and instruments. Supply and smuggling networks are spread across the entire world and are often facilitated or ignored by states. d) The technical specificity of the product, so that only a very few experts are capable of making informed decisions on the purchase of arms. This factor is often exaggerated by the power ceded to a few officials at the top of a steep hierarchy who make the choices. e) Procurement pressures. Arms are often needed rapidly either during conflicts or in anticipation of conflict, this factor also adds to the perceived need for secrecy to provide an advantage of surprise against the enemy and lessens the time available for meaningful scrutiny to prevent corruption. f) The high financial rewards coupled with a lack of consequences for corrupt behaviour. Those who commit corruption are rarely caught due to their position of authority.4 When an arms deal is allowed to be corrupt there can be no certainty that the equipment bought was the best deal for the purchasing country, or that the equipment was even required in the first place. The price might be inflated, both to pad the pockets of the powerful and the profit margins of arms dealers. Indeed needs for arms may be imagined purely for the sake of personal enrichment for those who stand to gain through corruption. The equipment may not have won in open competition and the lives of armed forces may be endangered as they are left with sub-standard equipment. The arms trade is especially deadly in the context of corruption; it is after all an industry in which items that are intended to kill, destroy and maim are sold for profit. The dangers come not only from the money which goes astray in corrupt deals but also from the possible consequences of tools of violence being acquired for reasons other than that of the public good. When national interests are confused by personal greed the consequences of corrupt deals are truly deadly. Arms races can be stimulated and corrupt regimes entrenched. In addition the money that might not have been spent otherwise on a corrupt deal could have been used elsewhere in healthcare, education or housing. Corruption hits the weakest hardest only to enrich the strongest. “Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense.” Dwight D. Eisenhower, in a speech on April 16, 1953 If these weapons of war are then needlessly bought to fill the pockets of the powerful then this 4 These factors are further explored in the chapter “Corruption and the arms trade: Sins of commission” by Feinstein, Holden and Pace in SIPRI Yearbook 2011, Stockholm International Peace Research Institute, 2011 3 28th May 2011 statement applies doubly. There are several ways of carrying out, and concealing corrupt practices used within the arms trade. The purpose of the recommended principle is that it ought to act as a catch-all so that if an honest person can see a connection to possible corruption in the case before them then the information ought to be disclosed for the sake of transparency. However the principle is also intended to address some of the most common methods more specifically. There are several usual ways to corrupt: a) Bribery, a payment between the parties, the most easily understood mode of corruption.
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