BAE business development chief subpoenaed in U.S.

By Jim Wolf

WASHINGTON (Reuters) - BAE Systems (BAES.L) said Monday its business development director was among those subpoenaed last month in a U.S. investigation of corruption allegations stemming from a Saudi arms deal in the 1980s.

Alan Garwood, until recently a top arms-export advisor at the Defence Ministry, was served with papers at an unspecified U.S. airport last month as part of a U.S. Justice Department investigation, said Lindsay Walls, a spokeswoman for BAE.

In 2002, Garwood was seconded from BAE to the ministry to lead a 600-strong military and civilian team that makes up the ministry's Defense Export Services Administration, according to BAE's Web site.

The company said last month that BAE Chief Executive Mike Turner and Sir Nigel Rudd, a non-executive director, had been served with subpoenas on their arrivals at U.S. airports on or about May 12.

The timing of Garwood's subpoena was "not dissimilar," Walls said. Garwood returned to work at BAE from his defence ministry slot in December, she said.

BAE rose to become the Pentagon's sixth-biggest supplier in fiscal 2007, from eighth the year before, largely on the strength of booming sales of armoured vehicles used in Iraq and Afghanistan.

In June 2007, the company said it had been notified that the Justice Department had begun investigating BAE's compliance with anti-bribery laws, including dealings with Saudi Arabia.

The Serious Fraud Office dropped its own investigation of the Saudi arms deal in December 2006. Then-Prime Minister Tony Blair said at the time the probe threatened national security.