The Trouble With Bribery By Cameron Duodu

No-one who knows how business is conducted in the world will be surprised to hear that a leading manufacturer of bridge-building equipment, Mabey and Johnson Limited of the United Kingdom, has pleaded guilty, at the Southwark Crown Court in London, to charges of bribing government officials in Ghana, Jamaica, Madagascar, Angola and Mozambique, in order to obtain contracts in those countries.

Because it pleaded guilty, and is continuing to co-operate with the British Serious Fraud Office in investigations concerning company officials who have now left the company service the, the company received what was a relatively meek sentence -- fines totalling £6.6 million. It is to pay “reparations” totalling £658,000 to Ghana. This is in connection with bridges it built in Ghana.

The sordid details of how the company recruited agents” in Ghana, Jamaica, Angola, Mozambique and Madagascar; how, in Ghana, the “agent” was changed when he was thought to be not “influential“, enough with government members; the way and manner in which the new "agents" received their “cut”, are all to be found on the website of the British Serious Fraud Office at

http://www.sfo.gov.uk/mabeyjohnsonltd/SFO-Annex2-Statement-01-250909.pdf

It is worth a visit to an internet café (for those who are not online) to read it and get a firsthand account of how allegedly “reputable” companies obtain contracts in developing countries. It also indirectly exposes how the countries whose “influential” persons are bribed, lose huge sums that they could otherwise have used for sorely-needed development projects.

In Jamaica, for instance, because of the “influence” of the local “agent” who was used by Mabey and Johnson, the company was able to include, in the overall price of a contract, the premium paid to buy insurance for the contract with the British Export Credit Guarantee Department (ECGD) and, at the same time, get paid by the Jamaican Government separately for the same insurance premium already provided for in the contract price". This means that Jamaica paid twice for the insurance premium. The sum involved was nearly £3 million.

Are similar frauds committed in respect of contracts entered into between the Governments of Ghana and other foreign companies? We won't know until institutions like the British Serious Fraud Office and its sister organisations in the USA, Holland, France, Norway and other countries, begin to use their advanced investigation techniques to detect such frauds committed by companies registered on their territory, and thereby protect developing countries.

For the Government-run insurance companies of these advanced countries, such as Britain's Export Credit Guarantee Department, must obviously carry out “due diligence” investigations about these contracts before they insure them, as it would be negligent not to find out what “risks” are involved in the contracts they insure, given the fact that politics in developing countries can be unpredictable. Funnily enough, if a developing country defaults in its debts to such companies as Mabey and Johnson, the insurance companies quickly run to their governments and put maximum pressure on them to twist the arms of the defaulting country to pay the debt. Ghana experienced such arm-twisting after the "Yenntua" announcement bravely made b y (then) Colonel I K Acheampong in 1972.

According to the SFO, Mabey &Johnson (abbreviated to M&J) has conducted business with government departments in Ghana over a number of decades. From the mid 1980's until approximately 1996, M&J's interests in Ghana were represented by Kwame Ofori [also known as Dan Ofori Atta of the Egle Party]. Kwame Ofori controlled a Ghanaian bridge building company, and apparently had influence within the ruling circles of the then ruling party in Ghana, the NDC.

To promote its business transactions in Ghana, M&J paid commissions to its agent through the creation of a notional fund known(irony of ironies!) as the “Ghana Development Fund"). M&J's executives facilitated corruption on behalf of M&J with a variety of decision-making Ghanaian public officials with responsibilities affecting M&J's affairs. These funds were “capable of, and were understood to be capable of, being used for corrupt purposes,” says the SFO.

When appointing and permitting its agents in Ghana to act on its behalf, M&J knew that there was a risk that unknown proportions of the agents' commission, totalling £750,000, might be used for corrupt purposes.

On 3 April 1996, Mr. Ofori and a relative attended a meeting at Twyford with M&J's Office Manager, at which Mr Ofori claimed that he no longer had control over the "total 15% commission" M&J had agreed to pay him and that he did not believe that a director of M&J, who was currently in Ghana, had distributed 5% to the "relevant personnel" or “local personalities”. Mr Ofori said further that had he (Ofori) been involved in the payment of the total amount of the 15% commission, “the present difficulties” being experienced by M&J would not have occurred.

What Ofori did not know was that the director he was accusing, was in thenprocess of easing him out. He had written to MJ headquarters that he had “met Kwame Peprah”, who was, at that time, "the acting Minister of Finance and the Chairman of the NDC Finance Committee."

The director said he “had been introduced to Mr. Peprah through Baba Kamara (aka I. B. Ibraimah), who was the NDC Treasurer, and 'political overseer' for the Ministry for Roads and Highways.” The SFO adds: “The role of Baba Kamara and his value as an agent to M&J is made clear in a document authored by a[n] M&J executive” and sent to the company's other directors. The document said: Concerning the value of the proposed new agent, “Kamara Ltd is a small Ghanaian contractor owned by Baba Kamara. He is the NCE (sic: he meant to say NDC) Treasurer and also the political overseer for the Ministry of Roads and Highways.

“He is a member of the all powerful NDC Finance Committee which includes Kwame Peprah (Minister of Finance and Minister of Mines and Energy).….[He] has considerable influence over Ato Quarshie, the Minister for Roads, the Deputy Minister and other top ranking civil servants and has been working with us since June 1994. This has been demonstrated over the allocation of the extra £1.3 million for the Tano bridge, and the £4.5 million allocation for the Priority Bridge Programme.”

　The SFO continues: “Additionally, Mr. Kamara's wife was secretary to the then President of Ghana - the former Flight Lieutenant 'Jerry' Rawlings, who had originally achieved power by means of a military coup in 1981.

"Unsurprisingly, a person in the position of influence of Mr. Kamara was an attractive prospect to M&J as agent for their business in Ghana, and the SFO contend that M&J knew, and intended that commission paid to Mr. Kamara, would be deployed as and when required, to corruptly promote M&J's commercial interests. The SFO believe that because he had demonstrated his effectiveness to attract business corruptly, he was appointed by M&J.”

It is accepted by M&J [the SFO further states] that in creating and making payments from this fund, corrupt payments would be made to public officials in order to affect the decision making process in favour of M&J. “Some of those purposes were self-evidently unrelated to M&J's legitimate business, such that the payments can best - and, indeed, only - be described as bribes. Not only were the bribes overt, so too was the means of collection on the part of the Ghanaian ministers and officials. Some, indeed, visited the UK in order to collect their payments in sterling….

“Thus the then Minister at the MRH [Ministry of Roads and Highways] Dr. Ato Quarshie, received a cheque, when he visited London in July 1995, in the sum of £55,000 for “contract consultancy”. An M&J director faxed instructions to the bank to enable Dr Quarshie to cash the cheque….In 1996 Saddique Boniface was the ECGD desk officer in the Ministry of Finance. On 29 February 1996 Saddique Boniface received a transfer of £10,000 from M&J to an account at Barclays Bank Plc in Watford. On 29 October 1996 the same account received a transfer of £13,970 from M&J.

“On or about 29 October 1996 Amadu Seidu, the Deputy Minister at the MRH, received £5000 in his Woolwich account held in St. Peter Port, Guernsey and Dr. George Yankey the Director of Legal and International Affairs at the Ministry of Finance, received £10,000 in his Midland Bank account in Hill Street, London W1; and Edward Lord Attivor, the ex- minister at the Ministry of Roads and Highways, also received £10,000 in his London bank account. …Amadu Seidu received a further £5,000 on 7 March 1997, the same date on which Saddique Boniface received a further £2,500. “

Mr. Boniface's son, who was a student at Exeter University received a cheque from M&J in the sum of £500. Although this is a relatively small sum it is indicative of the nature of the corruption M&J was then practising…. From December 1994 to 18 August 1999, M&J used the GDF (Ghana Development Fund)and associated accounts to pay bribes directly to named Ghanaian public officials totalling £470,792.60.”

The SFO concludes: “None of the payments set out above, obviously, could be said to have anything remotely resembling a legitimate commercial purpose. Thus M&J was able to engage in wholly corrupt business practices without any effective level of external scrutiny being applied.”

Unusually for a normally "dry" legal prsentation before a court, the SFO makes the palpably political comment that thosewhose interests were affected by the payment of these bribes were "the people of Ghana."

What more is there to say?