http://www.guardian.co.uk/chile/story/0,13755,1570335,00.html
Revealed: BAE's secret £1m to Pinochet
US banking records show links between arms firm and ex-dictator continued until last yearDavid Leigh and Rob Evans Thursday September 15, 2005
GuardianBritain's biggest arms firm, BAE Systems, has been identified on US banking records as secretly paying more than £1m to General Augusto Pinochet, the former Chilean dictator. A Guardian investigation has revealed some of the money was listed as being paid through a front company in the British Virgin Islands, which BAE has used to channel commission on arms deals.
Covert payments to Pinochet-linked groups are listed on documents compiled by the Chilean authorities and obtained by the Guardian. They record large payments from BAE as recently as last year.
Asked last night why it had paid the general, who is the target of numerous allegations of murder and torture from the time he seized power in Chile, BAE issued a statement saying: "We at BAE Systems have clear and rigorous policies which govern the conduct of our relationships with third parties. We require all our employees to adhere to these policies and comply with the law."
The company, a prime exhibitor at today's international arms fair in London, has been the target of bribery allegations. It is under investigation by the Serious Fraud Office on suspicion of money laundering and false accounting, after allegations of a £60m Saudi 'slush fund'.
A Chilean judge, Sergio Muñoz, is pursuing Gen Pinochet on allegations of tax evasion. Last month he made successful court applications in the US to obtain banking records. They disclosed huge sums of cash flowing into banks including the then Miami branch of Coutts. Coutts operated accounts, which Chilean prosecutors say are linked to Pinochet, from 1993 to 2004, although the bank has now sold out to a Spanish bank, Santander. Coutts said : "We have no reason to believe our Miami affiliate did anything inappropriate by reference to the banking requirements at the time."
According to the Chilean documents, BAE made payments into Coutts accounts under its own name, and under that of Red Diamond Trading, an offshore entity which does not appear on BAE's published accounts. Documents obtained by the Guardian show it has been used since 1998 to funnel covert commission payments for aerospace deals to Argentina.
The BAE payments went to offshore firms - also registered in the British Virgin Islands - controlled, the Chilean authorities say, by Gen Pinochet's financial adviser, Oscar Aitkin, described in a US senate committee investigation this year as a conduit for payments to Gen Pinochet.
BAE sought to conclude a deal in the 1990s to sell Chile a rocket system and are now trying to sell it naval electronics. Chile is described as a "key market" by the Ministry of Defence.
· Story put together with help from the Chilean daily newspaper La Tercera