Is EADS BAE All Over Again?

A report this week in the Telegraph said the U.K. Serious Fraud Office is waiting for approval from the attorney general before pursuing a full-scale bribery investigation into EADS, the European aerospace giant. 

The Telegraph said the SFO has completed 'preliminary inquiries into claims that illegal payments were linked to a £2 billion communications contract awarded to GPT, a subsidiary of EADS.'

The preliminary investigation began after Lt Col Ian Foxley, who worked for GPT, told the SFO that Saudi officials had been given 'luxury cars, jewellery and briefcases full of cash.' Foxley was later fired by GPT.

EADS's £2 billion contract was for an upgrade to the satellite and intranet systems of the Saudi National Guard, which protects the Saudi royal family.

Dominic Grieve, the U.K. attorney general, is reportedly considering diplomatic issues that might arise between the U.K. and Saudi Arabia. In 2006, the SFO dropped a bribery investigation of British aerospace giant BAE because of Saudi threats to end anti-terrorism cooperation with the U.K. BAE eventually paid U.S. enforcers $400 million to settle FCPA-related charges.

EADS -- the European Aeronautic Defence and Space Company -- is based in the Netherlands. It is Europe's biggest aerospace and defense firm. A division makes the Airbus and competes with Boeing.

The Telegraph said the SFO was forced to seek the attorney general's approval because any eventual prosecution would be under the old Corruption Act and not the new Bribery Act, which gives the SFO more latitude.