Department of Justice

Guilty Plea

March 1, 2010

UK company BAE Systems PLC pleaded guilty to one charge of conspiring to make false statements to the U.S. government in connection with certain regulatory filings and undertakings. The Company was fined $400 million and required to make additional commitments concerning its ongoing compliance. The DOJ alleged that the company conspired to impede the functioning of the U.S. government by making false statements to the U.S. government. The false statements charge was based on the fact that in a letter to the Department of Defense in November 2000, BAE Systems PLC’s CEO represented that BAE Systems PLC was planning on implementing an FCPA compliance program to ensure that its affiliates, including those not subject to the FCPA, would be in compliance with that law. In the letter, the CEO stated that the company would adopt such a program no later than 12 months after his letter. Then, in 2002, BAE told the Department of Defense that it had complied with the representations made in its November 2000 letter.

In a novel and extremely aggressive theory, the DOJ alleged that the company’s statements regarding the adequacy of its FCPA compliance program were false because allegedly the company had engaged in foreign business transactions that were inconsistent with those representations.