Lowell Bergman tracks a tale of
international bribery that leads to some of the world's most
powerful companies and governments.
As the global financial downturn continues and pressure for profits
increases on corporations across the world, a small group of lawyers in the
U.S. Justice Department is pursuing an aggressive crackdown against an
international business tactic - bribery - which
the World Bank says
amounts to as much as a trillion dollars a year in payments.
"Over the past two years, the U.S. government has collected almost a billion
and a half dollars in fines in foreign bribery cases," says Mark Mendelsohn,
the Department of Justice prosecutor in charge of more than 100 ongoing
cases, one of which culminated in a record seven-year prison term for the
former CEO of a subsidiary of the Halliburton Corp., and another which ended
in a record $800 million fine against the German giant Siemens.
whole world of conduct that rarely sees the light of day."
In Black Money, FRONTLINE correspondent
Lowell Bergman investigates this
shadowy side of international business, shedding light on multinational
companies that have routinely made secret payments - often referred to as
"black money" - to win billions in business.
"The thing about black money is you can claim it's being used for all kinds
of things," the British reporter David Leigh tells Bergman.
"You get pots of
black money that nobody sees, nobody has to account for,... you can do
anything you like with. Mostly what happens with black money is people steal
it because they can."
In his groundbreaking reporting for The Guardian newspaper, he
helped uncover one of the biggest and most complicated cases currently under
investigation - a story involving a British aerospace giant, the Saudi
royal family, and an $80 billion international arms deal known as
or "The Dove" in Arabic.
"If there was one person who was the main man
behind this arms deal, it turned out it was the U.S. ambassador, Prince
Bandar bin Sultan," says Leigh.
It all started back in 1985, when the charismatic Prince
Bandar was put in
charge of acquiring new fighter jets for the Saudi Arabian air force.
Israeli lobby in Congress reportedly stood in the way of the United States
making a deal with the Saudis, so President Ronald Reagan sent Bandar to the
British. The prince approached a willing Prime Minister Margaret Thatcher,
and they sealed the massive deal between the United Kingdom,
(formerly British Aerospace) and the Royal Saudi Air Force.
Rumors swirled that billions in bribes had changed hands to secure the deal,
but British officials denied wrongdoing.
"Of course there is suspicion, and
of course people are entitled to be suspicious," says Lord Timothy Bell, who
was involved in the deal from the beginning on behalf of the Thatcher
"But as far as I'm concerned, if the British government... and
the Saudi government reached a sovereign agreement over an arms contract
that resulted in a tremendous number of jobs in Britain, a great deal of
wealth creation in Britain,... and enabled Saudi Arabians to defend
themselves,... I think that's a jolly good contract."
But then, as a growing, international anti-bribery movement
- led by the
Organization for Economic Cooperation and Development
- spread, Britain
signed onto a binding treaty.
Soon after, a whistleblower came forward with
documents and firsthand knowledge of alleged corrupt payments.
Gardiner, a high-end travel agent in London, laid bare the details of how he
provided luxury services for Saudi Prince Turki and his family - charter
airplanes for massive shopping sprees, the purchase of expensive cars and
extravagant honeymoon trips - all paid for by BAE Systems.
lifestyle that many people would like to have if they could afford it," says
Gardiner. "It's a little bit beyond that of a film star, because you've got
the diplomatic passport with it."
Gardiner took his allegations first to The Guardian's Leigh, and then to the
British agency that investigates white-collar crime, the Serious Fraud
Office, which began an investigation.
That probe would turn up evidence of
huge payments from the Al Yamamah funds to bank accounts controlled by
Prince Bandar in Washington, D.C.
As the investigation grew, the Blair government was pressured by the Saudis
and by Prince Bandar himself, who went to 10 Downing Street and threatened
to end cooperation with the British in the fight against terror if the
investigations into Al Yamamah continued.
"The expression was, 'You know,
there's going to be a lot of people dead on the streets,'" a senior British
fraud prosecutor tells Bergman of the Saudi threats that ultimately led to
the shutting down of the British BAE investigation.
"If we go forward with
an investigation into these accounts in Switzerland, we may find we're not
going to be able to do what we can do to stop terrorism."
There was widespread frustration among corruption fighters about the British
capitulation, and fears that the fledgling international anti-bribery
movement would be undermined.
Soon thereafter, the U.S. Department of
Justice began its own investigation into BAE's worldwide network of
The case is now being watched closely by countries
around the world interested in seeing whether the United States is willing,
in a depressed economy, to press forward with an investigation and possible
legal case against a company like BAE Systems, whose major client is the
Pentagon, and which currently employs some 40,000 American workers.
part, BAE says that it is cooperating with the investigations.
Black Money includes exclusive interviews with current and former
prosecutors involved in the cases against BAE Systems, as well as with
Prince Bandar's legal representative on this matter, former FBI Director Louis Freeh.
Parallel to the documentary, FRONTLINE and its international newsmagazine
FRONTLINE/World have launched
The Business of Bribes, an unfolding online
The site offers breaking news stories, as well as in-depth
interviews with middlemen, prosecutors, whistleblowers and former
presidents, detailing the stories behind some of the largest bribery
investigations in corporate history.
For video click