Heaven forefend that backhanders might be traded in an arms bazaar. Is nothing sacred? But the efforts of the Serious Fraud Office to get BAE Systems prosecuted on charges that it was allegedly party to bribery when selling its armaments abroad threatens both the reputation and bank balance of Britain’s largest manufacturer.

Whatever practices may, or may not, have gone on, it would be hard to imagine inducements and double-dealing on the scale masterminded by Sir Basil Zaharoff, the so-called “merchant of death”, in the years preceding the First World War. He was then on the board of Vickers, one part of which is now subsumed in BAE Systems.

An ethnic Greek, Zaharoff was a colourful, if mysterious, character. Biographers seem confused as to whether his multilingual skills were picked up as a Constantinople brothel tout or through an English public school. In 1872 he assumed the identity of Prince Basilius Gortschakoff and married the daughter of a Bristol builder. Thirteen years later business took him to New York where he bigamously married an heiress. Thankfully, her family quickly discovered his other marital encumbrance. Thereafter he became the lover of the Duchess of Marchena.

Yet, it was as a Balkans arms dealer for the Swedish company of Nordenfelt that Zaharoff worked out a peerless moneymaking scheme: escalate an arms race by selling to all sides. He took his acumen to Vickers when, in 1897, it acquired Nordenfelt.

As Vickers’s salesman, Zaharoff toured the world touting weapons and bribes to the Serbs, the Greeks, the Turks, the Portuguese and the Spanish. He was particularly active “greasing the wheels” of the Tsarist war machine in St Petersburg while other Vickers agents made friends with its rivals in Tokyo.

There, the German company of Siemens had won the contract to equip the Japanese Navy by offering 15 per cent kickbacks. So Vickers offered 25 per cent. In 1914 admirals Matsumoto and Fuji were caught in receipt of massive sweeteners. The ensuing scandal resulted in the resignation of the Prime Minister, Yamamoto, and Vickers was banned from selling to Japan. However, a few weeks later the First World War broke out, Japan joined the Entente powers and Vickers regained its contracts. Even though his company had clearly breached the 1906 Prevention of Corruption Act, Zaharoff was knighted in 1918 for services to the Entente (he had been one of the bagmen who induced Greece’s entry into the war). Oxford honoured him with a doctorate of civil law.

We might know more about his complicated dealings had he not burnt his diaries. This he did after his servant stole them in the hope of selling their revelations to the press. They were safely returned to Sir Basil by a French policeman — allegedly in return for a “small consideration”.

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