BAe's Lightweight Stabilized Weapon System

BAe's 120mm Armoured Mortar System II

Barnet Green Party is calling on Barnet Council to sell its pension fund’s shares in BAe Systems after the weapons maker last Friday finally admitted misconduct in several export deals.

BAe agreed to pay penalties totalling nearly 300 million pounds for the crimes, which related to the huge 43 billion pounds al-Yamamah sale of fighter planes to Saudi Arabia as well as to some smaller contracts in other countries.

Barnet Council’s pension fund holds more than a million shares in BAe and the fund’s management committee has repeatedly refused to sell the stake although the company has been under investigation in the US and Britain for several years on allegations of bribery.

Barnet Green Party is once again urging the council to dispose of its holdings in BAe and fellow defence manufacturers Smiths Group and Rolls-Royce.

“Investment in companies which export weapons of death is always immoral and the corruption allegations make it doubly wrong to hold shares in BAe,” said Andrew Newby, a Green Party council candidate for East Finchley.

“We call on the council to place the money instead in ethical and environmental stocks which have every chance of being at least as safe an investment as BAe and could have the additional benefit of helping create jobs in growth sectors such as renewable energy.”

BAe announced it has reached agreement with the US Department of Justice to plead guilty to a charge of conspiring to make false statements to the US government. The company will pay a fine of 400 million dollars (around 257 million pounds) for the offence, linked to Al Yamamah and to contracts in the Czech Republic and some other eastern European countries.

In Britain, under an agreement with the Serious Fraud Office, the company will plead guilty to breach of duty to keep records of payments made to a former marketing adviser in Tanzania. It will pay a penalty of 30 million pounds, to include a fine and a charitable payment to Tanzania.

Tony Blair when prime minister ordered the SFO to stop investigating the Al Yamamah deal. If he had not done so, BAe’s penalties in Britain would almost certainly have been higher.

Former council leader Mike Freer has previously sought to justify Barnet holding BAe shares by saying the pension fund has a legal duty to get the best returns for its members. Far from selling BAe shares, the fund actually bought more in the year to June 2009, according to Campaign Against the Arms Trade.

“But BAe has been a dismal investment as its shares are trading little above where they stood ten years ago and the pension fund could have achieved much better returns from many other companies,” Newby said.

“A big cloud still hangs over the company’s future, as the government is desperate to reduce debt and an upcoming defence review is likely to lead to cuts in planned government purchases of BAe products.

“Barnet Council’s misguided investment policies have led to the loss of at least 11.5 million pounds of the 27.4 million it deposited with Icelandic banks.

“Barnet Green Party calls on the council to admit it was also wrong to retain BAe shares and to agree it is time to sell them,” said Newby, who is also parliamentary candidate for Hendon.