Mabey & Johnson becomes the first major UK company to be convicted of foreign bribery, and will pay penalties of £6.5m; British bridge firm bribed foreign officials to win contracts. In Ghana several former ministers and officials were identified by the SFO. Ministers and officials in Angola, Mozambique, Bangladesh, and Jamaica were also bribed.
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A string of foreign politicians and officials were named today as having received corrupt payments from a major British export firm. The company admitted it had systematically paid the bribes around the world to win contracts.
The bridge-building firm, Mabey & Johnson, is the first major British company to be convicted of foreign bribery. Many of its contracts were financially backed by the British taxpayer.
Legal experts said the success could see the SFO pursue other firms suspected of wrongdoing. Dan Hyde, a bribery and corruption lawyer from Cubism Law, said: “This is a landmark case as it signals success for the SFO in its first home prosecution of a company involved in corruption overseas.
“The SFO … will now have confidence it can tackle UK companies suspected of fraud abroad. Now the SFO has had a success with this type of action, it could signal increased interventions and prosecutions of UK companies which have foreign dealings.”
At Southwark crown court, London, John Hardy QC, for the Serious Fraud Office, told the judge that more than a dozen named top officials in six countries could be implicated in bribe payments by the Reading-based firm, owned by one of Britain‘s wealthiest families.
In Ghana several former ministers and officials were identified by the SFO. Ministers and officials in Angola, Mozambique, Bangladesh, and Jamaica were also bribed, Hardy told the court.
One of those on the list is Zina Andrianarivelo-Razafy, a diplomat who represents Madagascar at the United Nations and was previously the country’s ambassador to the United States.
Jamaican politician Joseph Hibbert, identified as an alleged recipient of the bribes last year, has now resigned from the government, saying he would clear his name.
The court was told the firm routinely paid bribes through covert middlemen to foreign politicians to get export orders. The Mabey family built up a fortune of more than £300m by selling steel bridges around the world.
This first conviction has been hailed as a landmark by the British government, which has been heavily criticised for failing to prosecute any British firm for foreign bribery. The government pledged in 1997 to crack down on corrupt exporters, but no one has been prosecuted until now.
Mabeys pleaded guilty to corruption in a pioneering deal with the SFO. It is the first time that the agency has concluded such a US-style plea bargain for corruption.
With the agreement of the SFO, the firm has offered to pay total penalties of £6.5m. Some would be paid as a form of reparations to the foreign governments.
A monitor would also be installed at the firm for three years to check that no more bribes are paid. Judge Geoffrey Rivlin is due to sentence the firm at the end of today’s proceedings.
Mabeys say it has reformed its behaviour and stopped making corrupt payments.
Anti-corruption campaigners The Corner House were the first to level allegations of bribery at Mabey & Johnson in 2004. Mabeys, which has made donations to the Conservative party, denied the claims, dismissing the campaigners as “a self-professed anti-corporate NGO based in Dorset and boasting just three members”.
Sue Hawley, of The Corner House, said today: “A remarkable pattern of corruption has now been exposed. It is time for other companies to clean up their act.”
Mabeys has also pleaded guilty to sanctions-busting by paying £363,000 to Saddam Hussein’s government in 2001-2 – the first time the British government has prosecuted a company for breaking those sanctions.
The Serious Fraud Office’s successful prosecution could now lead to it pursuing other companies suspected of committing fraud overseas, say legal experts.
Mabey & Johnson, based in Reading, indicated in a preliminary hearing at Westminster Magistrates Court that it would plead guilty to 10 charges of corruption and violating sanctions.
The company tried to influence officials in Jamaica and Ghana when bidding for public contracts in the 1990s. It also paid more than €422,000 (£365,000) to Saddam Hussein‘s regime between 2001 and 2002, violating the terms of the UN oil-for-food scheme in Iraq.
Sentencing will now take place later this month at Southwark Crown Court.
Mabey & Johnson now faces fines and will make reparations to Jamaica, Ghana and a UN programme which benefits Iraq. It has also agreed to an “internal compliance programme” carried out by an “SFO-approved independent monitor”.
The prosecution, first disclosed by The Daily Telegraph on Thursday, is evidence that the SFO’s investigation into alleged breaches by British firms of the oil for food programme, led by Roddy Gillanders, is working.
Richard Alderman, the SFO’s director, said: “These are serious offences and it is significant that Mabey & Johnson has co-operated with us to get to this landmark point.
“This has enabled this case to be dealt with in just over a year and is a model for other companies who want to self report corruption and have it dealt with quickly and fairly.”
Five of Mabey & Johnson’s eight directors have stepped down since spring 2008 when the company’s holding company told the SFO of the corruption offences. New management was installed last year by the holding company. The SFO declined to say whether it would press charges against any individuals.
Peter Lloyd, Mabey & Johnson’s new managing director, said: “We deeply regret the past conduct of our company, and we have committed to making a fresh start, wiping the slate clean of these offences.”
Staff have been retrained and sales and associated systems reviewed. He added: “We are taking steps to ensure we can protect jobs and take our business forward. We know we have a strong and committed team and excellent products, which are highly valued globally.”
Overseas politicians and officials named by the SFO as implicated in bribery by Mabey & Johnson included the following:
Ato Quarshie (former roads minister)
Saddique Boniface (minister of works)
Amadu Seidu (former deputy roads minister)
Edward Lord-Attivor (chairman inter-city transport corp)
George Sipa-Yankey (health minister)
Zina Andrianarivelo-Razafy (permanent representative at the UN)
Lt-Col Jean Tsaranazy (former public works minister)
Joseph Uriah Hibbert (former works minister)
Antonio Gois (former general manager state bridges agency)
João Fucungo (former director state bridges agency)
Carlos Fragoso (former head of DNEP, directorate of roads and bridges)
Khandaker Rahman (chief engineer, roads & highways department)
www.elombah.com with The UK Guardian and The Daily Telegraph