A Small Town's International Scandal
Harper Woods, Michigan finds itself at the center of a $100 billion scandal.
June 25, 2008 — -- The small town of Harper Woods, Michigan is at the center of an international scandal involving allegations of bribery, the Saudi royal family, and a $100 billion dollar fighter jet contract.
Harper Woods is suing a British defense contracting firm, BAE Systems, alleging that the company engaged in illegal behavior, including paying over $2 billion in bribes and kickbacks to the former Saudi ambassador to the U.S., in connection to a large fighter jet contract BAE had with Saudi Arabia stemming back to the 1980s.
Why is this small town of less than 15,000 residents involved? Because the town invested part of its public employees' retirement fund, about $135,000, in BAE Systems and now the town says it wants to make sure the company is spending shareholder money properly.
In a lawsuit filed in US District Court in Washington DC, Harper Woods alleges that BAE, as part of a deal to secure the multi-billion fighter jet contract with Saudi Arabia, paid bribes and kickbacks to the former Saudi Ambassador to the United States, Prince Bandar bin Sultan bin Abdul-Aziz Al-Saud.
The complaint alleges that because Prince Bandar was the son of the Minister of Defense and the brother-in-law of the head of the Saudi Air Force that he was in a position to influence whether or not BAE was awarded the contract.
The bribes to Prince Bandar, according to the complaint, "have amounted to over $2 billion over the last 20 years". The complaint alleges that Bandar had ready access to the money because a US bank was used, so that he could use the money on expenditures such as a $100 million residence in Aspen, Colorado and for his "fantastically outfitted" personal Airbus airplane, also valued at over $100 million.
BAE Systems Inc. denies the allegations in the complaint saying the claims have no substance. "The company has filed a motion before the courts in Washington, DC, to have this action dismissed in the US and heard in UK courts," said a statement e-mailed to ABCNews.com from BAE.
