International Business Law and Its Environment 9th Edition by Richard Schaffer,Filiberto Agusti,Lucien Dhooge

Exercise 2

In the summer of 2007, the media revealed that the British defense firm BAE had paid more than $2 billion in bribes over 20 years to Prince Bandar, a powerful member of the Saudi royal family. The Prince had delivered a contract under which Saudi Arabia purchased hundreds of British warplanes, spare parts, and training for Saudi pilots. When the British Fraud Office began investigating the transaction, Prime Minister Tony Blair terminated it for "national security" reasons, but the truth came out through the media. Prime Minister Blair ultimately defended the transaction on a national security basis and pointed to the many jobs it provided to the U.K. economy. The contracts continue today, and arms sales to the Middle East typically entail 10-15 percent commissions to "agents" widely reported to channel them to heads of state, generals, and their friends. What is your view as to the primeminister's position?