Introduction
Yesterday a former SBM Offshore executive was found guilty of bribing an Iraqi government official to secure lucrative oil contracts, in a trial led by the UK’s Serious Fraud Office (SFO). This is the latest conviction in the SFO’s investigation into Unaoil and we wrote about that case here https://www.corderycompliance.com/sfo-secures-oil-execs-conviction/. It was something of a good news, bad news week for the SFO however as they lost a tribunal claim brought by a former employee who led the Unaoil investigation.
What was the new case about?
Last year we wrote about the Unaoil investigation and charges brought against Paul Bond a 68 year-old former sales manager for the Middle East at SBM Offshore. In the first trial the SFO secured convictions of two co-defendants Ziad Akle and Stephen Whiteley but the jury was unable to reach a verdict on the charges brought against Bond. A fourth man, Basil Al-Jarah pleaded guilty to charges before the trial.
This case was a re-trial of the charges against Bond. The SFO argued that Bond was involved in a bribery scheme with Monaco-based oil-sector consultancy, Unaoil, to secure contracts for moorings related to oil transportation in the Middle East. The group had paid Oday Al Quoraishi (known by the codename Ivan) a deputy general manager of projects at South Oil Company, or SOC, part of Iraq’s Ministry of Oil, between 2005 and 2011 for confidential documents related to the Iraqi government’s tender processes. Al Quoraishi was paid a lump sum of $400,000 by Unaoil as well as being given hospitality including airline flights and a hotel stay in Istanbul with a friend.
What was the sentence?
Bond was sentenced to three and a half years in jail after his conviction last week. He was found guilty of two charges of conspiracy to make corrupt payments to Al Quoraishi. Sentencing Bond at Southwark Crown Court, Judge Martin Beddoe told him: “You willingly fronted the corruption for SBM and played a leading role in it.”
International cooperation
Once again in this investigation the SFO was at pains to thank a number of countries including Australia, France, Monaco, The Netherlands and the US who assisted in the bringing of the prosecution. As we have said before, cooperation is a key feature in many bribery investigations at the moment and the SFO also thanked some UK domestic law enforcement agencies as well for their assistance.
Wider Unaoil issues
The Unaoil investigation has been one of the SFO’s headline prosecutions of the last few years although it has not been without controversy. In our alert in July (https://www.corderycompliance.com/sfo-secures-oil-execs-conviction/) we highlighted allegations that had been made about improper conduct between a former US prosecutor and the SFO’s Director, Lisa Osofsky. Last month, an Employment Tribunal in London found that a former SFO investigator, Tom Martin, had been unfairly sacked by the SFO in December 2018. The tribunal decided that senior US DoJ officials and lawyers for the Ahsani family which owns Unaoil had leaned on the SFO to remove Mr Martin from the case. Mr Martin had made clear to DoJ officials that he did not agree with the way in which they were conducting their investigation.
This has resulted in Drago Kos, the head of the OECD’s working group on bribery expressing concerns over the investigation and Mr Martin’s sacking. In a recent interview with MLex, Kos said “effective and respectful cooperation among equal partners in fighting bribery must not look like this”.
What did we find out from the Tom Martin case?
The Employment Tribunal has now published their reasons for finding in Mr Martin’s favour in his employment claim. The judgment makes interesting reading. It talks about a meeting on 25 May 2016 at the US Embassy in London between officers of the FBI, the DoJ and the SFO with the aim of fostering cooperation between US and UK agencies. Mr Martin was amongst those who attended. The meeting was followed up by a drinks reception at the US Embassy and then drinks in a pub. The reason Mr Martin was given for his sacking was his supposed conduct in the pub including using a strong swear word and calling a US prosecutor a ‘quisling’ and/or spy.
Various emails between FBI pub attendees are disclosed in the Judgment. The Tribunal also heard evidence of worsening relations between the US and UK authorities in April 2018 essentially over the arrest in Rome of Sam Ahsani and competing claims from the UK and US authorities over his prosecution. The exchange of emails might be seen by some as an embarrassing fight between two prosecutors who should essentially be on the same side.
In July 2018, the DoJ forwarded a memo from Mr Ahsani’s defence team effectively complaining about Mr Martin. Mr Martin was suspended as a result despite claiming that this was “serious rabble-rousing from the DoJ and the defence”. The Tribunal also heard that there was a memo on 10 August 2018 copied into Ms Osofsky recommending the removal of Mr Martin from the Unaoil case “irrespective of the findings of the investigation into [his] conduct”. The Tribunal also heard that there was a meeting on 5 September 2018 at the SFO when Ms Osofsky made it clear that Mr Martin should not return as a Case Controller on the Unaoil investigation. The timing was unfortunate – despite the pub incident having taken place in 2016 the SFO chose to act in 2018 when Mr Martin seemed to be the principle objector to the way the US authorities sought to remove Mr. Ahsani to the US rather than allow him to face proceedings in the UK. The Judge decided that Mr Martin “was the target of an attempt to have him removed so as to facilitate a manoeuvre being undertaken by Mr Ahsani’s defence team and the US agencies”.
What does this mean?
Whatever went on in the Unaoil investigation the clear message is that bribery is still happening and that it is being prosecuted. Bribery risks are greater during the pandemic and many organisations are also struggling to deal with those risks through training and investigations. There are more details of how the pandemic has altered bribery enforcement here http://www.bit.ly/covbribe.
Clearly businesses must do all they can to stamp out bribery and corruption and deal with it properly when it occurs. Our UK Bribery Act 2010 FAQs give more details of what proper policies and procedures are likely to involve – to obtain a copy of our FAQs please click here https://www.corderycompliance.com/contact-us/
For more of our reporting about anti-bribery and anti-corruption issues please see here: https://www.corderycompliance.com/category/bribery-corruption/
You can find out about MLex’s reporting of bribery issues here https://mlexmarketinsight.com/expertise/financial-crime
For more information, please contact Jonathan Armstrong or André Bywater who are lawyers with Cordery in London where their focus is on compliance issues.
| Jonathan Armstrong, Cordery, Lexis House, 30 Farringdon Street, London, EC4A 4HH | André Bywater, Cordery, Lexis House, 30 Farringdon Street, London, EC4A 4HH | |
| Office: +44 (0)207 075 1784 | Office: +44 (0)207 075 1785 | |
| Jonathan.armstrong@corderycompliance.com | Andre.bywater@corderycompliance.com | |
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