Four UK individuals found guilty of bribery
Four individuals have recently been sentenced for conspiringto commit corruption offences in securing payments in exchange for disclosingconfidential procurement information between 2001 and 2009 in relation tolucrative energy engineering projects in Abu Dhabi, Egypt, Iran, Russia and Singapore.The offences were prosecuted as conspiracy to corrupt in relation to thepre-Bribery Act 2010 corruption laws, as the offences occurred before that Actcame into force.
The convictions were brought on the basis of informationuncovered during “Operation Navigator”, which was triggered by a biddingcompany’s report to the authorities who was approached by the defendants. TheOperation was a joint SFO and City of London Police investigation which beganin April 2008, looking into allegations linked to a procurement process inSingapore. During the investigation the team discovered further corruptactivities and payments made during the procurement processes for similarenergy engineering projects elsewhere in the world.
The defendants, who, except for one (Mr Hammond), are allbased in the UK, were at various times short-term agents for the procurementcompanies and so possessed inside information on the projects in question.Depending on which individual was an agent to which procurement company, theypassed the confidential information to others in their group who provided theinformation to bidding companies in return for corrupt payments described as“consultancy services”. The contracts for the projects involved amounted toapproximately US$110 million (£70 million) in value and the defendants sharedpayments totalling at least US$936,000.
The procurement services companies that employed thedefendants cooperated extensively with the investigation by enabling access tomobile phone data, travel records and emails, which established the defendants’involvement.
The sentences of the individuals ranged from 12 months’suspended sentence with 300 hours’ community service to five years'imprisonment and disqualification from acting as a director for 10 years. Therange of sentences reflected the level of offending of each individual.
In addition, confiscation orders are being sought againstthree of the defendants under Part 2 of the Proceeds of Crime Act 2002.Confiscation orders enable the courts to confiscate assets from a defendant whohas been found guilty of a relevant crime, which reflect the benefit theyobtained as a result of their offence.
This case is not novel for any legal precedent that itcreates, although some of the sentences handed down were relatively severe,reflecting both the length of time over which the offences occurred and thecourt’s increasingly hard-line approach to corruption.
However, the case is a useful reminder of the increasedcorruption risk associated with high value procurement, particularly inhigh-risk sectors such as energy. The value of the contracts in question, as isoften the case with oil and gas contracts, can mean that the risk of, andopportunity for, intermediaries seeking additional illicit personal benefits inconnection with the projects (and the willingness of others to offer or paythem in order to secure an advantage in winning the contract) is that muchgreater, which puts companies who have to engage such intermediaries at greaterrisk.
Although the individuals in this case were successfullyprosecuted by reference to the pre-Bribery Act corruption laws, the biddingcompanies who paid the bribes do not appear to have faced censure. Had theoffending occurred under the Bribery Act, the risk of corporate penalties mayhave been greater.
This article first appeared in Law-Now, CMS CameronMcKenna's free online information service, and has been reproduced with theirpermission. For more information about Law-Now, click here.