Washington:

The FBI is probing corruption allegations against a subsidiary of EADS, Europe’s biggest aerospace company, relating to a contract in Saudi Arabia for the UK’s Ministry of Defence.

US authorities — which have proved willing to levy big fines even on non-US companies they find guilty of flouting their laws — have yet to decide whether to launch an investigation against the UK subsidiary, GPT Special Management Systems.

The FBI has interviewed a witness and taken possession of documents in connection with allegations that GPT bribed Saudi military officials with luxury cars and made £11.5 million of unexplained payments — some via the US — to bank accounts in the Cayman Islands. GPT sells communications equipment via the MoD to the Saudi National Guard.

The European aerospace group told the FT: “EADS has not been contacted by the FBI or any other US agency in relation to GPT.”

The US interest comes even though the UK Serious Fraud Office is already investigating the matter.

In 2006, in a case involving separate allegations against the UK defence group BAE Systems, Tony Blair, prime minister at the time, intervened to stop an SFO investigation on national security grounds. Citing economic and diplomatic interests, Blair quashed an inquiry into whether BAE, Europe’s largest defence contractor, bribed Saudi officials in the hopes of winning the £43 billion Al Yamamah fighter contract.

The decision caused deep consternation, especially within the SFO, among anti-arms trade campaign groups and UK lawmakers.

A whistleblower passed some of the evidence quashed by Blair to the FBI and the US Department of Justice then took up the case. In 2010, it found BAE guilty of lying about its payments to middlemen and fined the company $400 million, at that time one of the biggest fines it had levied.

In the EADS case, documents seen by the Financial Times show that GPT made unexplained payments to bank accounts in the Cayman Islands between 2007 and 2010. New anti-bribery laws came into force in the UK in July 2011.

Concern over GPT’s possible wrongdoing were raised in various emails over several years by an executive on the project who eventually moved to a different job within EADS.

A second senior executive got hold of the emails and documents, fled Saudi Arabia and took them to the SFO in early 2011, which began an inquiry.

EADS maintained that its own investigations into the matter yielded no evidence of wrongdoing. The results of these investigations were passed to the SFO.

In the summer of last year the SFO launched a criminal probe.

American authorities have yet to decide whether to do the same.

The FBI and the SFO declined to comment.

— Financial times