After a brief end-of-the-semester hiatus we’re picking back up our series on Wal-Mart’s victims. And we’re less than half-way through.
Entries in Mabey and Johnson (6)
The U.K. Serious Fraud Office issued a news release on Friday 13th January stating that it has reached a civil settlement with the shareholders of Mabey Engineering (Holdings) Ltd to pay over £130,000 it received in dividends from Mabey & Johnson Ltd, its wholly owned subsidiary.
The U.K. Serious Fraud Office said yesterday that two former directors and a sales manager of bride-building firm Mabey & Johnson Ltd were sentenced for paying kickbacks to the Iraqi government of Saddam Hussein.
The U.K.'s Serious Fraud Office today said two former directors of engineering firm Mabey & Johnson Ltd were found guilty of paying kickbacks to the Iraqi government of Saddam Hussein to win contracts to build steel bridges.
British firm Mabey & Johnson Ltd was sentenced last week by an English court for overseas corruption and violations of the U.N.'s oil-for-food program. The bridge-building specialist will pay £6.6 million in criminal fines and related assessments. It pleaded guilty in July to bribing officials in Jamaica and Ghana to win public contracts, and paying more than £123,000 to the pre-war Iraqi regime in violation of U.N. sanctions. As part of its sentence, the privately-held company is also required to retain and pay for an SFO-approved monitor to review its internal compliance program.
The SFO's director Richard Alderman said: “This is a landmark outcome. The first conviction in this country of a company for overseas corruption and for breaking the U.N. Iraq sanctions and, satisfyingly, achieved quickly. . . . I urge other companies who might see some parallels for them, to come and talk to us and have the matter dealt with quickly and fairly."
Mabey & Johnson self-disclosed its illegal overseas conduct to the SFO in 2008. It said the bribery occurred between 1993 and 2001. In Jamaica and Ghana, the prosecution said, Mabey & Johnson "knew that its agents were involved in corrupt relationships with public officials with influence over M&J’s affairs in those jurisdictions. M&J accept that they agreed with their agents to pay bribes directly to public servants in those jurisdictions. Those bribes were deducted from the overall commission due to the agents."
The company's guilty plea has led to the resignation of Jamaica's junior minister of transport and works after he was linked to the corrupt business practices.
In its submission to the sentencing court, the SFO's statement about Mabey & Johnson included this message on the nature of public bribery:
The SFO is committed to the interests of the victims of overseas corporate corruption. Overseas corruption is not a “victimless crime." As the present case demonstrates only too well, the victims are all or any of the proper interests of the governments of the countries where such practices are carried out, the integrity of their civil services and public officials, and - more generally - the peoples of those countries, particularly the poorer and poorest sectors of those populations.The Serious Fraud Office was lambasted after its 2006 decision to drop the investigation of BAE Systems for bribery. It said then it had no choice because Saudi Arabia threatened not to buy Typhoon aircraft or continue sharing anti-terrorism intelligence. The High Court in London called the episode an outrage, an abject surrender to threats, and a capitulation. On the government's appeal to the House of Lords, five law lords decided the SFO's action was legal but "extremely distasteful." Former SFO director Robert Wardle left his post in April 2008.
View the Serious Fraud Office's September 25, 2009 release regarding the sentencing of Mabey & Johnson here.
Download the text of the prosecution's opening statements for (a) the corruption offenses in relation to Jamaica and Ghana and (b) breaching U.N. sanctions in the oil-for-food program here.
The last time we had a serious discussion about the U.K.'s Serious Fraud Office was to report its thrashing in June 2008 by a former American prosecutor. Jessica de Grazia, who'd been an assistant district attorney in Manhattan for 13 years, was hired by the U.K.'s then-attorney general to find out why the SFO couldn't get it right. As the U.K. Times said, her arrival at the SFO sparked panic.
But times change and even the SFO gets a second chance. Earlier this month it brought what may be the first of several cases against British firms for overseas corruption.
Mabey & Johnson pleaded guilty this month to violating the U.N.'s old Iraq sanctions and to an additional ten charges of overseas graft. The BBC reported that the company, which specializes in making temporary bridges, admitted at the Westminster Magistrates Court that it tried to influence officials in Jamaica and Ghana to award it public contracts. It also admitted paying more than £123,000 to the pre-war Iraqi regime in violation of the U.N. sanctions. The company hasn't been sentenced yet.
Reuters said Mabey & Johnson's admissions let to the resignation of Jamaica's junior minister of transport and works after he was linked to the U.K. company's corrupt business practices.
The emergence of an energized Serious Fraud Office, if that's what we're seeing, could mean the start of a lot more anti-corruption enforcement from London. According to the Telegraph, the SFO has spent £22 million investigating breaches by British firms of the oil-for-food program and more prosecutions could follow.
Former SFO director Robert Wardle left his post in April 2008, two months before de Grazia released her report. The U.K. Times' story about de Grazia was called "She came, she saw, she scythed through the SFO." The paper quoted an ex-staffer at the SFO as saying, “She caused chaos. She called meetings of case controllers and asked them to identify the crap assistant directors. Then she went to the investigators and asked them who was a crap case controller.”
The SFO had often been in hot water because of blown prosecutions. The worst trouble, though, came after its 2006 decision to drop the high-profile investigation of BAE Systems for bribery. It said it had no choice because Saudi Arabia threatened not to buy Typhoon aircraft or continue sharing anti-terrorism intelligence. The High Court in London called the episode an outrage, an abject surrender to threats, and a capitulation. On the government's appeal to the House of Lords, five law lords decided the SFO's action was legal but "extremely distasteful."
In de Grazia's 157-page report, she compared prosecution rates for the Serious Fraud Office with those of her former employer, the New York District Attorney's Office. In 2007, she said, the SFO had about three times more lawyers than the Frauds Bureau at the Manhattan District Attorney's Office. The New York DA's 19 lawyers -- with virtually no outside help -- managed to conclude the prosecution of 124 white collar defendants from 2003 to 2007. During the same period, the SFO's 56 staff lawyers concluded 166 prosecutions, and spent more than £4 million on external counsel. That means the per-lawyer prosecution rate in the New York DA's office was at least double and maybe triple that of the SFO.
Britain's Sunday Times reported that after release of de Grazia's report, dozens of lawyers, accountants and investigators were offered large severance packages to leave the agency.
Download a copy of Jessica de Grazia's June 2008 report here.
Coming up: The SFO meets the DOJ.