US firm paid bribe to Goa minister through fake 'vendors'

YASHWANT RAJ/HT, WASHINGTON | 19 July 2015 12:05 IST

A US construction company has admitted to paying almost $1 million in bribes for a Goa project, with payments to a minister, and using slush money to win projects in that state and Guwahati.

Louis Berger International, a New Jersey firm, admitted to these bribes and others in Vietnam, Indonesia and Kuwait, in a $17.3 million settlement with the US department of justice.

James McClung, a Dubai based executive who oversaw the company’s India operations, and another executive have pleaded guilty to violating US laws by paying bribes to foreign officials.

But the complaint and the settlement announcement by the department of justice on Friday did not identify the Goa minister or other officials, if any, paid by the company.

These bribes were paid around 2009 and 2010. Close to a million dollars -- $976,630 -- had been paid till August 26, 2010 for the Goa project alone, according to company records.

Louis Berger had won two water development projects in Goa and Guwahati, along with a consortium. “The company paid bribes to win both those contracts,” DoJ said in court papers.

The bribes were disguised as payments to vendors, which they were not. They were payments made to officials through employees of the consortium companies and agents.

The consortium kept track of the payments on a spreadsheet listing amounts ponied up by each member of the group, which was routinely circulated around to keep everyone updated.

A consortium partner sent an email to McClung around August 17, 2010, saying, “As discussed I enclose the details as provided by (third party intermediary)” along with updated payments.

An attachment to the email included an entry that said, “Paid (by an employee of the company) to Minister on behalf of agent.” Minister, once again, went unidentified.

Later that month, a consortium partner sent around a payment tracking schedule that said they had together paid $976,630 for the Goa project till date.

But no names or titles or designation other than the minister’s were mentioned. It was not clear if all of that nearly million dollars went to the minister, or it was spread over others.

 

These bribes were discovered and reported to the authorities by the company itself as a result of an internal investigation of billing on government contracts abroad between 1998 and 2010.

Former Berger CEO Derish Wolff pleaded guilty last December to inflating overhead costs on projects the company was doing for the US agency for international development.

The CEO, who is 79, was ordered home-confinement for 12 months and fined $4.5 million. The company settled that case for $69 million with the US department of justice.

Berger said in a statement Friday that it had launched massive efforts to reform the company since 2010, and reported these bribes, amounting to $3.9 million to authorities.

“Today’s settlement is the critical final milestone in our reform, as it was important for us to take responsibility for the historic actions of former managers and close the chapter on the company’s pre-2010 era,” said CEO Nicholas J Masucci.

Original Report 


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What about the minister (sinister) in Goa who received those bribes, ain't he going to the jail?

- Jayesh, Goa | 19 th July 2015 15:15

 

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