August 9, 2007 (LPAC)--At a press conference announcing a 27% increase in earnings for the first half of the year, largely based on its U.S. defense contracts, BAE Systems dismissed questions about the U.S. Justice Department bribery investigation, claiming that neither the DOJ investigation in the U.S., nor the continuing but curtailed Serious Fraud Office investigation in the UK, will have any effect on its business operations.

"That's for the lawyers to take care of," said CEO Mike Turner in response to a reporter's question. "These investigations are not affecting our business in any way," Turner claimed. Calling it "business as usual," he said the company is not being diverted from its business strategy. He did, however, acknowledge that the company has "no idea" how long the investigations will continue. And despite the U.S. investigation of BAE's Saudi dealings under the Foreign Corrupt Practices Act, BAE expects the U.S. and Saudi Arabia to be its major growth areas.

However, the Times of London reports at least one way in which the Saudi slush fund scandal -- what LPAC calls "the scandal of the century" -- is having an effect. This involves the anticipated signing of a 20 billion pound sterling agreement between the British Ministry of Defense and Saudi Arabia, for 72 Eurofighter Typhoons, to replace the Tornados bought as part of the original 1986 al-Yamamah deal. The Typhoons will be built by BAE under the new "al-Salam" government-to-government arms deal.

Originally, the Typhoon contract was to have been signed in a public ceremony during the state visit of Saudi King Abdullah to the UK in late October, but this has now been scrapped, reports the Times, "to prevent embarrassing questions being raised about the involvement of the Saudi Royal Family in previous defense contracts with BAE." So instead, al-Salam will be announced quietly in a few weeks, and at today's press conference CEO Turner said he did not even know when that would be.