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Whistleblower Alleges EADS Bribery

A former employee of the European military contractor EADS told U.K. investigators the company’s middlemen gave Saudi Arabian officials “luxury cars, jewellery and briefcases of cash in an apparent attempt to smooth the passage of a £2 billion communications contract,” according to a story in the Telegraph.

The paper named the whistleblower as Lieutenant Colonel Ian Foxley, a former employee of EADS subsidiary GPTA.

The Serious Fraud Office has launched an investigation, according to press reports, and has interviewed Lt Col Foxley.

Lt Col Foxley claims he was fired “after raising concerns about the possibility of bribes changing hands,” the Telegraph said.

In 2006, Saudi officials pressured the U.K. government to drop a bribery investigation involving BAE Systems. According to court testimony, the Saudis threatened to stop cooperating with U.K. authorities in the fight against terrorism. The resulting scandal damaged the SFO’s reputation and led to new management.

“For confidentiality reasons,” an SFO spokesman told the Telegraph, “the SFO will be unable to make any public statement, but if charges are brought or a suspect is arrested it will become public very quickly.”

EADS’s £2 billion contract was for an upgrade to the satellite and intranet systems of the Saudi National Guard — “the 125,000-strong force that protects the royal family,” the Telegraph said.

EADS is the European Aeronautic Defence and Space Company. It was formed in 2000 by Daimler Aerospace (DASA, Germany), Aerospatiale Matra (France), and Construcciones Aeronuticas SA (CASA, Spain). It is Europe’s largest supplier of aerospace, defense and related services. One division makes the Airbus and competes with Boeing. EADS is based in Leiden, the Netherlands.

It has 122,000 employees and in 2010 had revenues of €45.75 billion.

EADS’ securities trade on numerous European exchanges, and in the U.S. through the over-the-counter market (pink sheets) under the symbol EADSY.PK.

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