Off The Air

My favorite British defense contractor

...gets its own documentary, courtesy of FRONTLINE. 

What company, you ask? From the accompanying press release:

FRONTLINE investigative correspondent Lowell Bergman examines the shadowy world of international bribery. The story reveals how multi-national companies create slush funds, set up front companies, and make secret payments, all to get billions in business. But these practices are facing a new international crackdown, led by prosecutors at the U.S. Department of Justice and allies abroad. At the center of this is a controversial, ongoing investigation into the British-based multi-national BAE Systems and allegations about billion dollar bribes.

Back in December, WPRB reported on Princeton's investment in BAE Systems.

Update :added video of part one of the documentary.

Update: Princeton University, BAE Systems, Zimbabwe

By Sebastian Jones

Two short items from a Friday meeting with Andrew Golden, president of Princeton University Investment Co. (PRINCO), and Cass Cliatt, Princeton's spokeswoman, about University investments in Zimbabwe and British arms supplier BAE Systems revealed by WPRB last week.

The broad takeaway: while Princeton claims it no longer owns BAE bonds and that it has two cents worth of an 18-year-old holding in Zimbabwe, nothing prevents the University from making future investments in either. Further, Princeton can only offer speculation to account for the listing of Zimbabwe on a federally-filed, public tax form that requires disclosure of investments of $10,000 or greater in foreign countries. What has changed, however, is that investment records are no longer made public due to concerns over "economic cost". The precise economic cost of having made investments public before 2002, when the current non-disclosure policy was implemented, remains unclear.

BAE Systems While the money manager responsible for the acquisition of BAE bonds is no longer affiliated with Princeton, “the fact these changes occurred had nothing to do with BAE," Golden told WPRB. “There is nothing that prevents us from investing in defense contractors,” Golden said, adding that the manager who acquired the BAE bonds “thought it was a good economic investment.” While PRINCO is charged with overseeing Princeton's multi-billion dollar endowment and managing funds of several organizations associated with the University, including WPRB, individual investment decisions are made by external money managers. Any non-economic factor applied to investment decisions-- what Golden termed a "social overlay"-- must be imposed by the Trustees of Princeton University and not by PRINCO or individual money managers.

Zimbabwe After a lengthy search, PRINCO could only locate a single, 18-year-old bond valued at around $.02, Golden told WPRB, adding he was “99 percent sure” it was the only investment. Should PRINCO’s review prove accurate, why Zimbabwe was listed last year among countries where the University has investments in excess of $10,000 remains a mystery. During the Friday interview with WPRB, Golden suggested it was an “out and out mistake” while Cliatt speculated that Zimbabwe might have been listed because in situations where “there’s any confusion” the University adopts a “conservative approach” to its filings.

This post was originally featured on the website of WPRB News on December 11, 2008.

Princeton says it no longer holds BAE bonds

By Sebastian Jones

Princeton University says it "no longer owns" bonds of BAE Systems, a controversial British arms supplier,  that WPRB reported yesterday were purchased in 2001. This disclosure appears to represent a departure from the University's stated policy of not discussing investment holdings. In an e-mail sent to WPRB Wednesday evening, University spokeswoman Cass Cliatt wrote:

A case in point is your inquiry related to BAE. While we do not disclose specifics of our investment portfolio, I can confirm that your inquiry relates to a fixed-income account that was widely diversified, but since mid-2003, the University no longer owns those securities.

BAE Systems has been criticized for dealings with, among others, Suharto's Indonesia and Robert Mugabe's Zimbabwe and has been investigated on charges of alleged corruption on multiple occasions. Additionally, details surrounding the foreign financial account or accounts held by the University in Zimbabwe, first revealed by WPRB on Tuesday, have yet to be disclosed. In her Wednesday evening e-mail, Cliatt instead suggested that:

members of the campus community with interest in these issues typically would not need to know whether the University is invested in Zimbabwe today to know whether they feel the University should be invested in Zimbabwe.  And looking at a list of investment holdings on a given day can't tell you what we're invested in today.  It tells you only what we were invested in at the time the list was published.

Tomorrow afternoon, at the invitation of the University, WPRB is slated to sit down with Andrew Golden, the president of the Princeton University Investment Co. (PRINCO), to discuss how the University makes and monitors investments, why Princeton has stopped disclosing printouts of investments--as was a standard practice during the late 1990's up until 2002--and why consideration of non-economic factors in investment appear only to be considered after concerns are raised by the campus community.

[Editor's Note: If you have questions you feel WPRB should ask Mr. Golden, send them along to tips@wprb.com before 1:30 PM tomorrow]

Our full program on Zimbabwe, and on Offshore Financial Centers (OFCs)-- where companies, individuals and foundations can invest funds at very low tax rates, usually at the expense of their home nations' tax revenues-- aired this afternoon and will be posted online tomorrow evening. Roughly one third of Princeton's declared foreign financial accounts, as of June 2007, are situated in OFCs.

This post was originally featured on the website of WPRB News on December 5, 2008.

Princeton invested in arms supplier with Zimbabwe ties

By Sebastian Jones

In 2001 Princeton University purchased bonds in British arms supplier BAE Systems, essentially giving a $1.5 million dollar loan to a company whose dealings with regimes like Robert Mugabe’s Zimbabwe have come under repeated scrutiny from investigators, journalists and activists, WPRB has learned.