In a globalised world, overseas business trips are a necessity but there could be some who are more reluctant to make them to the US, after the recent detention of top BAE executives at Texas airport.
Chartered accountant Sir Nigel Rudd, a non-exec at BAE, was one of those detained, raising questions about what might happen to key personnel involved with the company.
What's happened?
The US Department of Justice is looking into allegations that the company paid bribes to win the £20bn al-Yamamah arms deal.
Chief executive Mike Turner, while en route to check out the company’s armoured vehicle factory in Sealy, was questioned for 40 minutes at Texas airport last week over the issues, as was Sir Nigel.
Turner has been with BAE Systems ‘man and boy’, rising up through the ranks as an apprentice to overseeing all of the company’s defence export business from the mid-90s.
But Sir Nigel’s detention at New York’s Newark Airport en route to a holiday in Florida, undoubtedly raises even wider issues.
Sir Nigel, a chartered accountant and deputy chairman of Barclays, has been a non-executive director for less than two years, so was not involved with BAE in the 1980s and 1990s when it is alleged the company paid bribes to win the Saudi deal.
What's going to happen?
When a non-exec who wasn’t linked with the company at the time under investigation is detained, what might happen to all the other executives involved with the company now?
What about those working for auditors KPMG? After all, BDO Stoy Hayward advised online gaming auditors not to travel to the US with papers when the rows over the gambling emerged.
KPMG declined to divulge what, if any, travelling restrictions they might impose on staff handling the defence firm’s work.
Obviously, they need to visit the global operations of the company they are auditing but the prospect of being subpoenaed with laptops, mobiles and BlackBerries examined is not attractive.
Brad Ockene, a partner in the Chicago office of law firm Lovells, believes it’s unlikely that outside auditors, who he describes as ‘one step’ removed, would receive such treatment.
But BAE Systems chief financial officer, George Rose, is likely to face tougher scrutiny.
‘The CFO would be of great interest and someone they would consider stopping via a subpoena, or other means, if the government feels they aren’t getting sufficient co-operation the usual way,’ he said.


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