June 14, 2007 (LPAC)--The proposed takeover of the major U.S. defense contractor Armor Holdings Inc. by the British BAE Systems, Inc., announced on May 7, is subject to many levels of review in Washington. These reviews will be complicated -- and the takeover itself likely doomed -- if the U.S. Justice Department opens a criminal investigation of BAE, as sources of the London Guardian say it will.

Justice Department spokesman Brian Sierra refused on June 11 to confirm or deny to EIR that there is a pending investigation, saying that the DOJ does not comment on such investigations.

The merger has to be reviewed by the Committee on Foreign Investment in the U.S. (CFIUS), part of the U.S. Treasury Department. EIR has an inquiry pending with the Treasury as to the status of their review, and has asked for their comment on the British press reports that BAE has been insulated from U.S. scrutiny, because of the close relationship between the Bush family and Saudi Prince Bandar.

According to Armor's shareholder disclosures, the deal may also be subject to review by the Federal Trade Commission and the Justice Department's Anti-Trust Division. A spokesman for the FTC said that any such review is not public until it has been concluded and a finding issued.

The U.S. Department of Defense will reportedly also review the takeover, for its national security implications.

At a minimum, the Senate Foreign Relations Committee, and the House Foreign Affairs Committee, both oversee CFIUS reviews. In this case, other Congressional committees, such as the Armed Services Committees, are likely to be involved as well.