A court in the West Africa country of Senegal sentenced a former government minister and son of the ex-president to six years in prison and ordered him to return to the state $229 million after his conviction for illegal enrichment.
Entries in Senegal (7)
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In Dakar, the capital of the West African country of Senegal, the IMF's regional representative was given a farewell dinner two months ago. After three years in the post, Alex Segura was heading back to his native Spain. As the evening ended, President Abdoulaye Wade handed Segura a going-away gift. It was cash -- €100,000 and $50,000. Segura boarded his flight and left the country, cash in hand. In later explaining Segura's actions, the IMF said he was worried about missing his plane and concerned about finding a place to stash the cash safely in Senegal. Here's a report from AFP.
President Wade, who's 83 and plans to run for re-election in 2012, said there was no corruption, just a mix-up. He issued a statement giving this account of what happened:
The aide-de-camp asked the president of the republic if he should give him (Segura) something, in keeping with custom. The president of the republic replied 'yes' without saying what the sum should be, because there was a custom. The aide-de-camp made a mistake over the amount and realized his mistake later.
The IMF said Segura reported the gift the same night he received it. Arrangements were made to hand it over to Senegal's ambassador in Spain, which was done in early October. Segura is now posted to Washington, D.C. and hasn't spoken about the matter.
Even if the gift-giving incident was a mistake, as President Wade said, Senegal's thirteen million people have other reasons to be upset. An AP report said the president "has dismayed former supporters through ostentatious displays of wealth, including renting numerous suites in a luxury hotel in Switzerland this summer for his annual summer vacation. His Swiss holiday, which one newspaper claimed had cost the government at least $1.6 million, came at the same time that Senegal suffered devastating rains that flooded entire neighborhoods, causing some 264,000 people to lose their homes."
The U.S. Agency for International Development said in its August 2007 assessment (here) that Senegal lacks transparency in public affairs and financial transactions and suffers from chronic corruption. "These phenomena can be seen both in everyday dealings with governmental officials (petty corruption) and in major national government contracts (grand corruption). Together, they increase chronic poverty and the gap between citizens and their state."
Senegal ranks 85th on the Corruption Perception Index (here), tied with Albania, India, Madagascar, Montenegro, Panama and Serbia. Life expectancy is just 59 years, among the lowest in the world. Literacy is under 40%. Unemployment is nearly 50% and more than half the people live below the poverty line. See the CIA World Factbook here.
Opposition legislator Imam Mbaye Niang said he'll ask parliament to investigate the cash gift to the IMF's departing in-country representative. "Wade has to be taken to court for spending national money illegally," he said. "Unfortunately I am sure that we will not succeed because the opposition is the minority in parliament."
Two former telecommunications executives who admitted bribing employees of state-owned companies in Africa and concealing the payments have avoided prison in exchange for their cooperation in an ongoing FBI investigation.
The Justice Department said yesterday that Roger Michael Young, 48, of Washington, D.C., a former managing director of ITXC Corporation, has been sentenced to five years probation, including three months home confinement, three months in a community confinement center, and a $7,000 fine. He pleaded guilty in July 2007 to violating the Foreign Corrupt Practices Act and the Travel Act.
Former ITXC Vice President Steven J. Ott, 49, of Princeton, N.J., who also pleaded guilty, was sentenced in July this year to five years probation, including six months in a community confinement center and six months home confinement. He was fined $10,000.
Young and Ott faced up to five years in prison and fines of $250,000. The DOJ said both were granted a reduced sentence based on their cooperation with an investigation the FBI is conducting into the foreign bribery scheme. They were sentenced by U.S. District Court Judge Garrett E. Brown of New Jersey.
A third defendant in the case, Yaw Osei Amoako, 55, of Hillsborough, N.J., pleaded guilty in September 2006. He was sentenced in August 2007 to 18 months in prison followed by two years of supervised release, and a $7,500 fine.
ITXC was a publicly-held VOIP company based in Princeton, N.J. It was acquired by Canada's Teleglobe International Holdings Ltd. in May 2004 (Teleglobe was itself acquired by Tata's VSNL in July 2005). Between August 2001 and May 2004, the three executives paid $267,468.95 in bribes to foreign officials in Nigeria, Rwanda and Senegal in order to obtain contracts for ITXC to transmit telephone calls to those countries. ITXC made $11,509,733 in net profits from contracts obtained through the bribery. Ott was ITXC's vice president for global sales, Young was its managing director for the Middle East and Africa, and Amoako was the regional director for sales in Africa.
In April 2008, the Securities and Exchange Commission settled a civil enforcement action against all three. It charged them with violating the antibribery provisions of the FCPA and concealing and falsely reporting the illegal payments. In the settlement, they each consented to the entry of a final judgment permanently enjoining them from violating and aiding and abetting violations of the FCPA. Amoako also agreed to pay $188,453 in disgorgement and prejudgment interest because he took kickbacks for some of the bribes he paid to the foreign officials.
View the DOJ's Sept. 2, 2008 release here.
The Securities and Exchange Commission said this week that on April 18, 2008 it settled civil proceedings under the Foreign Corrupt Practices Act against Steven J. Ott, Roger Michael Young, and Yaw Osei Amoako. The SEC charged the former executives of ITXC Corp. with violating the antibribery and books and records provisions of the FCPA by bribing senior officials of government-owned telephone companies in Nigeria, Rwanda and Senegal, and concealing and falsely reporting the illegal payments. ITXC was a publicly-held VOIP company based in Princeton, New Jersey. It was acquired by Teleglobe International Holdings Ltd. in May 2004.
In settling the SEC's civil enforcement action, Ott, Young and Amoako each consented to the entry of a final judgment that permanently enjoins them from violating Sections 30A and 13(b)(5) of the Securities Exchange Act of 1934, Rule 13b2-1 thereunder, and from aiding and abetting violations of Exchange Act Section 13(b)(2)(A) and, with respect to Ott and Young, violations of Exchange Act Section 13(b)(2)(B). Amoako also must pay $188,453 in disgorgement and prejudgment interest. He took kickbacks for some of the bribes he paid to the foreign officials.
The three defendants have also been charged by the Department of Justice for criminal violations of the FCPA. In the criminal action, Amoako, 55, of Hillsborough, N.J., was sentenced in December 2006 to 18 months in prison for conspiring to violate the antibribery provisions of the FCPA and to violate the Travel Act. Amoako pleaded guilty in September 2006 to paying about $266,000 in bribes disguised as “commissions” to employees of state-owned phones companies in Nigeria, Rwanda and Senegal. In addition to his prison sentence, he was also ordered to pay a $7,500 fine and serve two years of supervised release.
In July 2007, Ott and Young also pleaded guilty to separate one-count criminal informations charging them with conspiring to violate the FCPA and the Travel Act. They haven't been sentenced yet in the criminal proceedings and face up to five years in prison and a $250,000 fine.
Ott was ITXC's former vice president for global sales, Young was its former managing director for the Middle East and Africa, and Amoako was the regional director for sales in Africa. They negotiated and / or approved bribes to foreign officials in Nigeria, Rwanda and Senegal in order to obtain contracts for ITXC to transmit telephone calls to those countries. The three executives paid $267,468.95 in bribes between August 2001 and May 2004. ITXC made $11,509,733 in net profits from the contracts obtained through the bribery.
In its complaint against Amoako, the SEC gave this description of his bribery in Nigeria: The sole purpose of the payments was to influence the agent, a foreign official, to steer the carrier contract to ITXC and thereby enable it to obtain and retain business with Nitel. There was no legitimate purpose for the payments. In fact, as a result of the agreement with the Nitel Agent, ITXC earned profits of $1,136,618 from selling telephone service to customers calling Nigeria. ITXC could not have made such sales without having the carrier contract with Nitel that resulted from Amoako’s bribes to the agent. Amoako received a kickback of $50,000 from the Nitel Agent in mid- 2004. Amoako concealed the kickback from ITXC and his superiors by having the money deposited at financial institutions in Africa.
View the SEC's Litigation Release No. 20556 / May 6, 2008 here.
View the SEC's Complaint in Securities and Exchange Commission v. Steven J. Ott and Roger Michael Young, Civil Action No. 06-4195 (GEB) (D.N.J.) and Securities and Exchange Commission v. Yaw Osei Amoako Civil Action No. 05-4284 (GEB) (D.N.J.) here.
View the DOJ's July 27, 2007 news release about Ott and Young's guilty pleas here.
View the DOJ's Sept. 6, 2006 news release about Amoako's guilty plea here.