1.John Dramani Mahama-( Former Vice President/President of Ghana)
The recent chilling news that Europe’s aerospace multinational, Airbus, has conceded paying huge bribes to Ghana in order to secure contracts during Mills/Mahama administration between 2009 and 2015, has somehow reinforced Mr Martin Amidu’s previous allegations that the late Mills set up a Committee to investigate his then Vice President Mahama over the dubious aircraft deals.
To some of us, the biggest alleged bribery and corruption scandal ever occurred in the history of Ghanaian politics, remains the dubious Brazilian Aircraft deal negotiated by the then vice president under Mills administration, John Dramani Mahama.
If you may remember, during his State of the Nation Address on 19th February 2009, the late President Mills informed the Parliament that his government was looking into the decision to acquire two executive Presidential jets.
However, the late President Mills was indecisive over the acquisition of the aircraft and thus observed: “Ghana simply cannot afford the expenditure at this time and we certainly do not need two Presidential Jets”
Astonishingly, however, whilst the late Mills was joyfully delivering his euphonious state of the nation address, the Vice President John Mahama, who also happened to be the chairman of the Armed Forces Council, was blissfully entertaining delegations from Brazil, and busily negotiating the acquisition of five jets, including the most expensive hangar without the knowledge of the late President Mills.
Well, does the recent Airbus gargantuan corruption scandal give a clue about the dubious aircrafts deal negotiated by the then Vice President Mahama? Your guess is as good as mine.
Back then, the late President Mills became suspicious of the whole deal and decided to put a committee together to review the deal, according to Mr Martin Amidu.
If you would recall, a few years ago, Mr Amidu audaciously came out and told the good people of Ghana that President Mills of blessed memory set up a Committee to investigate an alleged cloudy Brazilian aircraft purchases negotiated by the then vice president, John Dramani Mahama (Source: martinamidu.com).
Given the bizarre circumstances, Ex-President Mahama may choose to continue to claim birthright to incorruptibility, but we will only take him seriously if he comes clean on the Brazilian Aircraft deal as revealed by former Attorney General under the late Mills and the current Special Prosecutor, Mr Martin Amidu.
In fact, back then, some of us could not trust our tympanic membranes when the erstwhile Attorney General under the late Mills and the current Special Prosecutor, Mr Martin Amidu disclosed somewhat sensationally that the late Mills somehow lost trust in his vice president, Mahama, over the dubious Brazilian Aircrafts deal, and therefore ordered an investigation.
However, according to Mr Amidu, the late Mills could not stand on his ground and woefully stooped and allowed the Committee to somehow turn a blind eye to his directives.
Indeed, there is a serious question here that the well-meaning Ghanaians must mull over and probe carefully: did Ex-President Mahama really indulge in a dubious transaction?
Mind you, the allegation has become much more serious following the Airbus corruption scandal and the only way former President Mahama can obliterate the doubts from the minds of discerning Ghanaians is to lock horns with Mr Martin Amidu or face him in a competent court of jurisdiction.
In fact, a carefully considered reflection on Mr Amidu’s chilling exposition would conclude that the late Mills lost trust in his then vice president Mahama.
We should, however, not lose sight of the fact that Mr Martin Amidu was the Attorney General and the Minister of Justice under President Mills administration, who duly prepared the terms of reference of the Committee constituted by the late Mills to probe into the alleged bribery and corruption scandal.
So, who says that Mr Martin Amidu is lying through his teeth and therefore did not have in his possession the necessary documentation?
Whatever the case, we shall keep our fingers cross and look forward to observing the court proceedings.
In fact, I will venture to stress that if indeed, the late Mills set up a committee to investigate his vice Mahama, then he probably had an irrevocable gleam of suspicion on his mind.
In other words, we can conclude that the late Mills felt Mahama was trying to rip off the nation, hence setting up a committee to unravel the furtive deal.
So upon a carefully considered deliberation, reflective thinkers may draw an adverse inference that the late Mills was not prepared to allow any member of his administration to dupe the country through corrupt practices.
If that was not the case, why would he set up a committee to investigate his vice president, Mahama, the sole negotiator of the alleged dubious deal?
Shockingly though, we have heard the NDC faithful time and time again contesting vehemently that the late Mills did not constitute any such Committee to look into the cloudy deal negotiated by Mahama.
But contrary to the NDC loyalists persistent denials, Mr Amidu, the then-Attorney General, has been maintaining consistently that the Committee members included Mr William Aboah, Mr George Amoah, and Brig. Gen. Allotey (Rtd) former Judge Advocate-General.
Mr Amidu would thus stress: “the terms of reference of the Committee as I was instructed and drafted them for the late President were: “(i) to investigate the processes adopted in selecting, negotiating, and agreeing on the acquisition of the aircraft; (ii) to investigate the competitive advantage, prices of the aircraft and the level of economic and financial due diligence conducted by relevant agencies in the process of acquisition of the aircraft; and (iii) to investigate any other matter that in the opinion of the Committee is reasonably related to the foregoing terms of reference”. “Pressure groups never allowed the Committee to take off”.
“But the very fact that the late President Mills even contemplated this Committee meant that he was uncomfortable with and suspicious of the alleged inflated prices of the aircrafts”.
Undoubtedly, the Late President Mills put his trust in his vice president, John Dramani Mahama, but if we are to believe the Airbus corruption scandal and Mr Amidu’s account of the Brazilian Aircraft saga, we can draw an adverse inference that former President Mahama betrayed the trust the late Mills reposed in him. It, therefore, explains why the late President Mills set up a committee to investigate him.
In fact, there are serious issues here that need to be considered by well-meaning Ghanaians.
If, indeed, the late President Mills did not trust Mahama prior to his death, why should discerning Ghanaians go ahead and hand over our sovereignty to a supposedly ‘untrustworthy’ once again?
It is important to note that the President of a nation is a serious job, and as such it requires a serious and committed person.
Therefore, if corruption cases are hanging on the neck of an individual who is going to look after the national coffers, and has so far unwilling to seriously disprove such allegations, then discerning Ghanaians have to be really careful about handing him another term in office.
In ending, until former President Mahama comes clean on the Airbus corruption scandal and meets Mr Martin Amidu in the law court over the alleged dubious Brazilian Aircraft deal, the reflective observers will continue to stand with the indefatigable Mr Martin Amidu.
The aircrafts were procured from Dutch firm Airbus SE, which has been found guilty in shady deals in some countries across the globe.
Investigations by the Serious Fraud Office (SFO) in the UK led to the exposé.
Fines were imposed by the Royal Courts of Justice in its landmark judgement on Friday.
The SFO focused its investigations on not only Airbus but its partners in South Korea, Indonesia, Sri Lanka, Malaysia, Taiwan, Ghana, Colombia and Mexico.
“In brief, persons associated with Airbus, not exclusively its employees, offered very substantial sums of money by way of bribes to third parties in order to secure the purchase of aircraft, by civil airline companies, in counts 1to 4,” the approved judgement sighted by iWatch Africa indicated.
In the case of Ghana, it involved the government between July 1, 2011 and June 1, 2015.
“Between 2009 and 2015 an Airbus defence company engaged Intermediary 5, a close relative of a high ranking elected Ghanaian Government official (Government Official 1) as its BP in respect of the proposed sale of three military transport aircraft to the Government of Ghana.
“A number of Airbus employees knew that Intermediary 5 was a close relative of Government Official 1, who was a key decision maker in respect of the proposed sales.
“A number of Airbus employees made or promised success-based commission payments of approximately €5 million to Intermediary 5.
“False documentation was created by or with the agreement of Airbus employees in order to support and disguise these payments.
“The payments were intended to induce or reward “improper favour” by Government Official 1 towards Airbus.
“Payments were eventually stopped due to the arrangement failing the due diligence processes required by the Liquidation Committee.”
While the first deal was under the presidency of the late John Evans Atta Mills, the second deal was under the presidency of John Dramani Mahama.
This will be a big blow to the former President Mahama who is seeking the mandate of Ghanaians in the December 2020 elections.
Over €29 million is expected to be received from fines against Airbus in the case involving Ghana.
The conduct is said to be a criminal violation of the International Traffic in Arms Regulations (ITAR) regulations.
Read the full judgement below
Case No: U20200108
IN THE CROWN COURT AT SOUTHWARK
IN THE MATTER OF s.45 OF THE CRIME AND COURTS ACT 2013
Royal Courts of Justice Strand, London, WC2A 2LL
Date: 31 January 2020
THE PRESIDENT OF THE QUEEN’S BENCH DIVISION (THE RT. HON. DAME VICTORIA SHARP) ———————
Director of the Serious Fraud Office – and –
James Lewis QC, Allison Clare, Katherine Buckle and Mohsin Zaidi (instructed by the Serious Fraud Office) for the Applicant
Hugo Keith QC and Ben FitzGerald (instructed by Dechert LLP) for the Respondent
Hearing date: 31st of January 2020 ———————
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Dame Victoria Sharp P.:
- On 28 January 2020 I heard an application in private in which I was asked to make a declaration in preliminary approval of a deferred prosecution agreement (a DPA) reached between the Serious Fraud Office (SFO) and Airbus SE (Airbus). At that hearing, I made a declaration that it was likely to be in the interests of justice for such agreement to be made and that its proposed terms were fair, reasonable and proportionate. Today, the 31 January 2020, I made a final declaration and Order to that effect at a hearing held in public. One of the consequences of this Order is that Airbus must pay a total financial sanction of approaching one billion euros (€990,963,712 including costs) to the Consolidated Fund via the SFO within 30 days of today’s date, made up of the disgorgement of profit of €585,939,740 and a penalty of €398,034,571. To put this figure into context, this financial sanction is greater than the total of all the previous sums paid pursuant to previous DPAs and more than double the total of fines paid in respect of all criminal conduct in England and Wales in 2018.
- The total sums which Airbus must now pay in a global context however exceeds €3.5 billion. This is because the SFO investigation which has led to this DPA is part of a joint investigation with the French Parquet National Financier (PNF) conducted by a joint investigation team (the JIT) and is parallel to an investigation conducted by the United States Department of Justice (DOJ) and by the United States Department of State (DOS). Each of the prosecuting authorities has taken responsibility for a number of geographical areas or customers and has now entered into their own DPA, Judicial Public Interest Agreement (CJIP) or (in the case of the Department of State) a Consent Agreement, with Airbus SE.
- The SFO’s investigation related to bribery offences in Malaysia, Sri Lanka, Taiwan, Indonesia and Ghana. The PNF’s investigation related to bribery and corruption offences in China, Colombia, Nepal, South Korea, the United Arab Emirates, Saudi Arabia (Arabsat), Taiwan and Russia. The JIT investigation into Airbus’ conduct in Colombia was led by the SFO but the SFO agreed that this conduct should be included in the French CJIP to reflect French primacy in the JIT investigation. The DOJ investigation relates to bribery and corruption offences in China and violations of parts 126.1, 129 and 130 of the US International Traffic in Arms Regulations (ITAR) concerning a number of jurisdictions. The DOS’s investigation relates to civil violations of ITAR concerning various jurisdictions.
- There is to be a simultaneous resolution in all three jurisdictions by way of settlement agreements.
- The criminality involved was grave. The SFO’s investigation demonstrated that in order to increase sales, persons who performed services for and on behalf of Airbus offered, promised or gave financial advantages to others intending to obtain or retain business, or an advantage in the conduct of business, for Airbus SE. It is alleged that those financial advantages were intended to induce those
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others to improperly perform a relevant function or activity or were intended to reward such improper performance and that Airbus did not prevent, or have in place at the material times adequate procedures designed to prevent those persons associated with Airbus from carrying out such conduct.
The legal framework
- DPAs provide a mechanism by which an organisation (being a body corporate, a partnership or an unincorporated association, but not an individual) can avoid prosecution for certain economic offences through an agreement with the prosecuting authority. In this jurisdiction, the prosecuting authorities are the Director of Public Prosecutions (DPP) and the SFO. The legislative mechanism is provided by Schedule 17 of the Crime and Courts Act 2013 (the 2013 Act). The relevant rules of court are contained in Part 11 of the Criminal Procedure Rules (CrPR) and a Deferred Prosecution Code of Practice (the DPA Code) is published jointly by the SFO and the CPS. DPAs have been given extensive consideration by Sir Brian Leveson, P. as he then was, in Serious Fraud Office v Standard Bank Plc  11 WLUK 804, Serious Fraud Office v Sarclad Limited  7 WLUK 211, Serious Fraud Office v Rolls Royce  1 WLUK 189 and Serious Fraud Office v Tesco Stores Ltd  4 WLUK 558. See more recently, two decisions of William Davis J in Serious Fraud Office v Serco Geografix Ltd  7 WLUK 45 and Serious Fraud Office v Guralp Systems Limited (2019, U20190840).
- The operation of the deferred prosecution regime was summarised in the preliminary judgment of Standard Bank. At paras 1-3, Sir Brian Leveson P. explained that:
“1. The traditional approach to the resolution of alleged criminal conduct is for a prosecution authority to commence proceedings by summons or charge which then proceeds in court to trial and, if a conviction follows, to the imposition of a sentence determined by the court. By s. 45 and Schedule 17 of the Crime and Courts Act 2013 (“the 2013 Act”), a new mechanism of deferred prosecution agreement (“DPA”) was introduced into the law whereby an agreement may be reached between a designated prosecutor and an organisation facing prosecution for certain economic or financial offences. The effect of such an agreement is that proceedings are instituted by preferring a bill of indictment, but then deferred on terms: these terms can include the payment of a financial penalty, compensation, payment to charity and disgorgement of profit along with implementation of a compliance programme, co-operation with the investigation and payment of costs. If, within the specified time, the terms of the agreement are met, proceedings are discontinued; a breach of the terms of the agreement can lead to the suspension being lifted and the prosecution pursued.
SFO v Airbus SE
2. By para. 7-8 of Schedule 17 to the 2013 Act, after negotiations have commenced between a prosecutor and relevant organisation, the prosecutor must apply to the court, in private, for a declaration that entering into a deferred prosecution agreement in the circumstances which obtain is likely to be in the interests of justice and that the proposed terms are “fair, reasonable and proportionate”. Reasons must be given for the conclusion expressed by the court and in the event of such a declaration (either initially or following further negotiation and review), formal agreement can then be reached between the parties. In that event, a further hearing is necessary for the court to declare that the agreement is, in fact, in the interests of justice and that the terms (no longer proposed, but agreed) are fair, reasonable and proportionate.
3. If a DPA is reached and finally approved, the relevant declaration, with reasons, must be pronounced in public. Thereafter, the prosecutor must also publish the agreement and the initial or provisional positive declaration (along with any earlier refusal to grant the declaration) in each case with the reasons provided. In that way, the entirety of the process, albeit then resolved, becomes open to public scrutiny. …”
8. As Sir Brian Leveson P. also explained in the final judgment in Standard Bank, at paras 2 and following:
“2. In contra-distinction to the United States, a critical feature of the statutory scheme in the UK is the requirement that the court examine the proposed agreement in detail, decide whether the statutory conditions are satisfied and, if appropriate, approve the DPA. … The court retains control of the ultimate outcome. …
4. Thus, even having agreed that a DPA is likely to be in the interests of justice and that its proposed terms are fair, reasonable and proportionate, the court continues to retain control and can decline to conclude that it is, in fact, in the interests of justice or that its terms are fair, reasonable and proportionate. To that end, it remains open to continue the argument in private, again on the basis that, if a declaration under para. 8(1) is not forthcoming, a prosecution is not jeopardised. Once the court is minded to approve, however, the declaration, along with the reasons for it, must be provided in open court. The engagement of the parties with the court then
SFO v Airbus SE
becomes open to public scrutiny, consistent with the principles of open justice ….”
- Thus more particularly (i) a prosecutor may make a further application to the court for a preliminary declaration if its previous application is declined (para 7(3) of Schedule 17 to the 2013 Act); (ii) a DPA only comes into force when it is approved by the Crown Court making a final declaration under para 8(3) of Schedule 17 to the 2013 Act; (iii) the final hearing on the merits may be in public or private, but an approval and the reasoning must be announced in a public hearing (CrPR 11.2(1)(b) and (2)), and (iv) para 12 of Schedule 17 to the 2013 Act provides for the postponement of publication of documents normally required to be published under para 8 of Schedule 17 to the 2013 Act to avoid prejudicing other proceedings. Further, pursuant to para 2(2) of Schedule 17 to the 2013 Act, the proceedings instituted against the entity are automatically suspended once the para 8 declaration is given by the Court. In most situations such proceedings will be discontinued once the DPA expires (see CrPR 11.8).
- Whether a DPA is likely to be or is in the interests of justice and whether its terms are likely to be or are fair, reasonable and proportionate are questions to be determined by reference to all of the relevant facts and circumstances of a particular case. It will be rare for one factor alone to dictate the outcome. As identified in the preliminary judgment in Sarclad at para 32:
“In making this assessment, a number of factors fall to be considered. These can be listed as follows:
i) the seriousness of the predicate offence or offences;
ii)the importance of incentivising the exposure and self- reporting of corporate wrongdoing;
iii) the history (or otherwise) of similar conduct;
iv) the attention paid to corporate compliance prior to, at the time of and subsequent to the offending;
v) the extent to which the entity has changed both in its culture and in relation to relevant personnel;
vi) the impact of prosecution on employees and others innocent of any misconduct.”
11. At the hearing on 28 January 2020, an application was made by the Director of the SFO pursuant to para 7(1) of Schedule 17 to the 2013 Act in relation to a proposed DPA between the Director of the SFO and Airbus, and I heard extensive submissions from Mr James Lewis QC for the SFO and Mr Hugo
Approved Judgment SFO v Airbus SE
Keith QC for Airbus. The hearing was held in private as the legislation requires: see para 7(4) of Schedule 17 to the 2013 Act, albeit on the evening before that hearing, reports appeared in the media, apparently presaging some of the issues that were due to be considered confidentially during the course of the hearing. Having considered the submissions and the material placed before me, I made the declaration the parties invited me to make, namely that entering into the DPA was likely to be in the interests of justice and that its proposed terms were fair, reasonable and proportionate. I reserved my reasons for reaching this conclusion until the final hearing held under para 8 of Schedule 7 to the 2013 Act. I also gave leave for Airbus to make an appropriate stock market announcement in accordance with its obligations under the Market Abuse Regulation (EU) No 5961/2014.
- The Director of the SFO has now applied for a declaration under para 8 of Schedule 17 to the 2013 Act that the DPA is in the interests of justice and that its terms are fair, reasonable and proportionate. Nothing has occurred that has caused me to alter my provisional view. I have therefore given final approval to the DPA. The hearing today was placed in the list for Southwark Crown Court and held in public. This judgment contains my reasons for giving provisional and final approval to the DPA and making the declarations to which I have referred. What follows is a summary only of the detailed account of the facts set out in the agreed Statement of Facts in these proceedings, and to which reference should be made for the full and agreed account.
- In the Statement of Facts, the identity of the individuals concerned has not been included. There are ongoing investigations in respect of a number of individual suspects in this jurisdiction and abroad. It is appropriate to protect the rights of the suspects to a fair trial. In addition some of the individuals involved in the relevant conduct are based in jurisdictions where there are human rights concerns, and the death penalty exists for corruption. Further, the intermediary companies used by Airbus were often made up of a few individuals. Naming the companies would therefore be tantamount to naming those individuals. To go further than the Statement of Facts or my summary and identify the employees or others by name, would be to prejudice potential criminal proceedings and could lead to action or the imposition of a penalty which, in this country, we would regard as contravening Article 3 of the European Convention on Human Rights. The identities and positions of relevant employees and other persons referred to in the Statement of Facts have however been made known to me so that I have been able to assess their comparative seniority and, thus, the responsibility of Airbus. In the circumstances however, none are identified.
- Airbus is one of the two largest manufacturers of commercial aircraft in the world (the other being The Boeing Company). It also manufactures helicopters, military transports, satellites, and launch vehicles.
- It is necessary to explain something of Airbus’ somewhat complex corporate history and structure in order to put the DPA and the multi-national aspects of
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it into context and to explain the jurisdiction in this case in respect of the criminal conduct that occurred.
- Airbus SE is a company registered in the Netherlands. In 2000, the European Aeronautic Defence and Space Company, EADS NV, was created by the merger of three European aerospace and defence companies. In 2013, the core partnership among the shareholders of EADS NV was terminated. The industrial shareholders exited, and the collective state shareholding of France, Germany and Spain was limited to 28 percent. A new and independent board was established under an independent chairman, subject to the right of the French and German states to approve or disapprove of certain outside directors.
- In 2014, EADS NV changed its name to Airbus Group NV. In 2015 Airbus Group NV was converted into a European public-limited company, Airbus Group SE. In 2017, Airbus Group SE changed its name to Airbus SE. Airbus SE is therefore the current name of the ultimate Airbus parent company. It is, however, the same legal entity as the prior group parent companies, EADS NV, Airbus Group NV and Airbus Group SE. The turnover for Airbus SE for the years 2011 to 2018 (using round figures) ranged between €49 billion and €66.5 billion and its profit before finance costs and income taxes for the same period, (again using round figures) ranged from €1.5 billion to €5 billion.
- EADS France SAS was a subsidiary of EADS NV, and had a department within it, formed in 2008, called the Strategy and Marketing Organisation (the SMO). Importantly for present purposes, a sub-division of SMO, SMO International, was responsible for Business Partner (BP) appointments and International Market Development projects (IMD projects) in relation to commercial aircraft sales. EADS France SAS became Airbus Group SAS in 2014. In 2017 Airbus Group SAS was merged into Airbus SAS, and it no longer exists as a separate entity.
- Airbus SAS is now the main commercial aircraft making entity, and the operational headquarters of Airbus Commercial, one of Airbus’ primary divisions. Airbus Operations SAS is a subsidiary of Airbus SAS and wholly owns three companies concerned with operations in Spain, Germany and the UK. Airbus operations at Filton and at Broughton in the United Kingdom are managed through a subsidiary UK company, Airbus Operations Limited.
- A Spanish company, Airbus Defence and Space SA is another subsidiary of Airbus SE. From April 2012, Airbus Defence and Space SA has owned Airbus Military UK Ltd, which has as its main purpose, the support of certain programmes in the UK. From 2014, Airbus Military UK Limited has been part of the Airbus Defence and Space Division.
- Part of Airbus SE’s business is therefore carried on in the United Kingdom; and for all material purposes, Airbus SE has continuously carried on a part of its business in the UK since 1 July 2011. It is also agreed that the two United Kingdom companies to which I have referred, that is, Airbus Operations Limited and Airbus Military UK Ltd, through Airbus SAS and Airbus Defence and Space SA, are subject to the strategic and operational management of Airbus SE. It follows from these facts, and indeed is common ground that
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Airbus SE is a ‘relevant commercial organisation’ for the purposes of section 7 of the Bribery Act 2010.
22. Airbus SE and its subsidiaries are generally referred to as Airbus in this judgment. However, Airbus SE is the only company which is a party to the proposed DPA.
Internal compliance structures and problems within Airbus
- Much of the conduct covered by the DPA was conducted by BPs (sometimes referred to as intermediaries, or agents). BPs were third parties used to increase Airbus’ international footprint and to assist it in winning sales contracts in numerous jurisdictions. When Airbus made a successful sale of aircraft it would typically pay BPs a commission based on a percentage value of the sale, or a fixed amount per aircraft sold.
- In 2012 Airbus commissioned a private company to review its compliance programme and was awarded an Anti-Corruption compliance certificate by this company for the design of its anti-bribery compliance program. Further, during the relevant period Airbus had a number of written policies governing payments and contractual relationships with third parties. These included policies applying to the committees and its employees specifically aimed at ensuring that third parties were used appropriately and only after sufficient due diligence had been undertaken. For example the Business Ethics Policy and Rules set out fundamental ethical principles for all employees; and detailed the due diligence process to be undertaken in relation to the appointment of BPs, noting that it was very important to be aware of ‘red flags’ listing examples of the same. Notwithstanding such policies and that compliance review, as it later emerged, there were serious weaknesses within Airbus’ compliance and oversight structure.
- During the period covered by the DPA, Airbus operated a series of committees which had the responsibility for reviewing the use of BPs and payment to third parties and BPs. The two entities that were central to what occurred were SMO International and an Airbus committee called the Company Development and Selection Committee (CDSC). The composition of CDSC was not fixed but included, from time to time, Airbus’ Chief Financial Officer, Chief Strategy and Marketing Officer and its Chief Compliance Officer. Additionally, the SMO’s own International Compliance Officer, Head of International Relations, General Counsel and others attended its meetings. CDSC was supposed to meet monthly but as it had difficulty meeting regularly, and in order to facilitate its decision making, CDSC also established two subcommittees in which the Head of SMO International Operations played a leading role. These subcommittees were the sub-CDSC which proposed the engagement of BPs for CDSC validation and the pre-CDSC which proposed IMD projects for CDSC validation.
- The relevant responsibilities were these. SMO International was responsible for ensuring BPs were independent of Airbus’ customers; for conducting compliance risk assessments and for agreements with and payments to third parties for the Commercial Division. CDSC itself was responsible for ensuring
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there was compliance with Airbus’ written policies and it gave formal approval to enter into BP relationships and for IMD projects. CDSC also delegated approval of BP relationships for divisions, apart from the Commercial Division, to the Head of SMO International Operations. CDSC’s terms of reference stipulated that decisions taken had to ensure that the financial and legal risks associated with a third party agreement had been identified and minimised, and that governance of transactions was acceptable and did not generate any reputational risk.
- As it later emerged however, some committee members were aware of and/or involved in the material wrongdoing. Further, the information provided to the committees was incomplete, misleading or inaccurate, in particular with regard to the process by which the BP was identified, the actual amount of compensation promised to the BP, the identity of the beneficial owner of the remuneration provided or the underlying economic justification for the IMD project. In consequence, it is plain that the committees were not able to provide effective or properly informed oversight in the manner intended.
- At a series of meetings during the course of 2014, CDSC examined and reviewed intended and actual commitments made by SMO International to third parties, including some of which the CDSC had not known; and implemented revisions to policies and procedures including a focus on value-for-money justifications and enhanced compliance reviews. In September 2014, Airbus initiated a review of all third party relationships. An internal Corporate Audit & Forensic report on the operations of CDSC found significant breaches of compliance policies. The report concluded that most of IMD projects performed poorly and questioned whether BPs helped create viable businesses.
- The heightened scrutiny of BP engagements led, in October 2014, to a freeze on all payments arranged by SMO International to BPs and IMD projects in relation to the Commercial Division. The freeze was extended to the Airbus Defence & Space, and Airbus Helicopters divisions in May 2015. A Liquidation Committee was set up to review and approve or reject all outstanding commitments. It included members of the former CDSC – some of whom were involved with and/or aware of the wrongdoing – supplemented with representatives of the Commercial Division, Contracts and Treasury departments and Group General Counsel. The Legal & Compliance function was re-structured and given far greater prominence and authority under a newly- appointed General Counsel from 1 June 2015, who became a member of the governing Group Executive Committee.
- In April 2015 Airbus published new rules regarding future third party engagements and passed primary responsibility for business development engagements from SMO International to the divisions. The SMO was formally closed on 1 March 2016.
31. As part of its business, Airbus obtained export credit financing from Export Credit Agencies (ECA), including UK Export Finance (UKEF), a Government body. On 24 April 2015, UKEF wrote to Airbus regarding UKEF’s anti-bribery
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due diligence procedures in respect of agents and made specific reference to UKEF’s obligation to report all suspicious circumstances to the SFO. The letter also raised the lack of information that had been provided in respect of Airbus’ BP in Sri Lanka (see count 2 on the Indictment).
- In late 2015 Airbus conducted a review of the accuracy and completeness of its declarations relating to the use of BPs in applications for export credit financing. Issues with export credit declarations were first reported to UKEF in January 2016. Following further investigation a more detailed report was made to UKEF in March 2016, on the understanding that the information could be shared with other relevant United Kingdom agencies. This disclosure sought to correct inaccurate information previously provided to UKEF and included red flags for corruption, and was made at a time when Airbus had been notified that UKEF were under an obligation to report any suspicions of corruption. Following notification that UKEF felt it appropriate to contact the SFO and its strong preference that Airbus also make a notification to the relevant authority, both UKEF and Airbus reported to the SFO on 1 April 2016. Airbus through its legal advisors, and the SFO first met on 6 April 2016.
- On 15 July 2016 the SFO opened a criminal investigation into Airbus and associated persons (the Investigation). Airbus were informed of this on 5 August 2016 prompting a disclosure by Airbus to financial markets.
- On 31 January 2017 the SFO and the PNF entered into a JIT agreement, the purpose of which was to facilitate investigations into bribery and corruption allegations in relation to Airbus, its BPs, former and current employees and other third parties. French law No 68-678 of 26 July 1968 (the French Blocking Statue or FBS) prohibits certain disclosures of information by French persons and entities in foreign judicial and administrative proceedings. Under 694-4 of the French Code of Criminal Procedure, French Judicial authorities are also entitled to exclude from their responses in mutual legal assistance requests, information that would be detrimental to the essential interests of France. In the present case, the French authorities concluded this included making specific contract values public. The French authorities also controlled the supply of documents to the SFO to ensure compliance with the FBS.
- The JIT’s investigation was vast in scale and in scope. It covered all of the BPs engaged by the Airbus divisions until 2016 – more than 1,750 entities across the world. The JIT focussed particularly on about 110 BPs for which red flags had been identified, from amongst which the JIT selected several investigation priorities. The PNF focused its investigations on Airbus and/or its divisions’ conduct in the United Arab Emirates, China, South Korea, Nepal, India, Taiwan, Russia, Saudi Arabia, Vietnam, Japan, Turkey, Mexico, Thailand, Brazil, and Kuwait. The SFO focused its investigations on Airbus and/or its divisions’ conduct in South Korea, Indonesia, Sri Lanka, Malaysia, Taiwan, Ghana, Colombia and Mexico. Within this scope, the PNF and SFO selected a representative sample of the markets and concerns involved.
- I deal with the issue of Airbus’ co-operation with the Investigation below at paras 68 to 74. It is however to be noted: (i) that the scale of the case and number of documents collected by Airbus from custodians relevant to the Investigation
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(in excess of 30.5 Million documents) required both Airbus and the JIT to develop new and proportionate procedures for the identification and review of the documentation; (ii) that Airbus made the JIT aware of its findings, producing contemporaneous evidence and through presentations and the like, which were reviewed by the SFO; (iii) that these presentations concentrated on the priority customers and jurisdictions identified by the JIT; (iv) that the SFO examined the internal investigation documents (including interviews with Airbus employees and BPs, Airbus having waived legal professional privilege on a limited basis) and (v) that in addition, the SFO undertook its own independent investigation.
37. It is equally important to note that as the Statement of Facts records, the SFO interrogated and validated the Airbus narrative as well as conducting its own investigation as it was mindful of the need to identify the full extent of the offending. Steps taken included reviewing, including by digital review potentially relevant documents; conducting interviews in the UK; attending and asking questions at interviews in France; issuing notices under section 2 of the Criminal Justice Act 1987 for the provision of bank accounts in the United Kingdom and material held by third parties; sending Mutual Legal Assistance and intelligence requests to overseas jurisdictions and agencies for banking and company information and obtaining copies of documents seized by overseas agencies in connected investigations. Further, the SFO has, so far as possible, independently sourced information to challenge or confirm the information provided to it, and instituted an independent procedure to interrogate and validate Airbus documents to test the veracity and completeness of the provision of those documents.
The brief facts relating to the counts on the Indictment
- Each of the counts on the Indictment concerns similar conduct, the detail of which can be found in the Statement of Facts. In brief, persons associated with Airbus, not exclusively its employees, offered very substantial sums of money by way of bribes to third parties in order to secure the purchase of aircraft, by civil airline companies, in counts 1 to 4; and by the Government of Ghana, in count 5.
Count 1: Malaysia
- The first count alleges that contrary to section 7 of the Bribery Act 2010, between 1 July 2011 and 1 June 2015, Airbus SE failed to prevent persons associated with Airbus SE from bribing others concerned with the purchase of aircraft by AirAsia and AirAsia X airlines from Airbus, namely directors and/or employees of AirAsia airlines where the said bribery was intended to obtain or retain business or advantage in the conduct of business for Airbus SE.
- AirAsia and AirAsia X are two major airlines in Southeast Asia, headquartered in Malaysia and were significant customers of Airbus at the time of the offences. Between October 2005 and November 2014, AirAsia and AirAsia X ordered 406 aircraft from Airbus, including 180 aircraft secured during the indictment period by way of improper payment (made by EADS France SAS, later Airbus Group SAS), and the offer of a further improper payment. The improper
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payment consisted of $50 million (and Airbus employees also offered but did not pay an additional $55 Million) paid to directors and/or employees of AirAsia and AirAsia X airlines as sponsorship for a sports team. The sports team was jointly owned by AirAsia Executive 1 and AirAsia Executive 2 but was legally unrelated to AirAsia and AirAsia X. The additional improper payment was prevented by the October 2014 freeze on payments to BPs described at para 29 above.
Count 2: Sri Lanka
- The second count alleges that contrary to section 7 of the Bribery Act 2010, between 1 July 2011 and 1 June 2015, Airbus SE failed to prevent persons associated with Airbus SE from bribing others concerned with the purchase of aircraft by SriLankan Airlines from Airbus, namely directors and/or employees of SriLankan Airlines, where the said bribery was intended to obtain or retain business or advantage in the conduct of business for Airbus SE.
- Sri Lankan Airlines (SLA) is the national carrier of Sri Lanka. At the material time, the Government of Sri Lanka owned 99.1 percent of SLA.
- In 2013, Airbus engaged the wife of a person concerned with the purchase of aircraft from SLA through a straw company (the Company of Intermediary 1). Pursuant to the engagement, Airbus employees offered up to $16.84 million to the Company of Intermediary 1 to influence SLA’s purchase of 10 Airbus aircraft and the lease of an additional 4 aircraft. In fact, only $2 million of the $16.84 million was paid. The Company of Intermediary 1 was approved by Airbus employees as a BP. To disguise the identity of the person behind the BP, Airbus employees misled UKEF.
- UKEF expressed dissatisfaction with an application made by Airbus in November 2014 for export credit financing, and then with the details about the BP (the relevant agent) which Airbus subsequently submitted. UKEF asked a series of questions about the BP, including why they had been employed as such, when their CV suggested they had little aviation experience and that they were domiciled and paid outside Sri Lanka. During the course of February 2015, Airbus provided misleading and untrue answers to the questions that had been asked. In late February UKEF personnel spoke to Airbus employee 10 and Airbus employee 8 [senior]. This call did not alleviate UKEF’s concerns. Airbus employee 10 then reported to Airbus employee 12 and Airbus employee 4 [very senior]. On about 12 March 2015, Airbus withdrew the application to UKEF. On 1 April 2016, UKEF reported this and other matters disclosed to it by Airbus to the SFO.
Count 3: Taiwan
- The third count alleges that contrary to section 7 of the Bribery Act 2010, between 1 July 2011 and 1 June 2015 Airbus SE failed to prevent persons associated with Airbus SE from bribing others concerned with the purchase of aircraft by TransAsia Airways from Airbus, namely a director and employee of TransAsia Airways, where the said bribery was intended to obtain or retain business or advantage in the conduct of business for Airbus SE.
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- TransAsia Airways (TNA) was Taiwan’s first private airline. It ceased operations in 2016. Between 2010 and 2013 Airbus channelled payments through Company of Intermediary 2 and Company of Intermediary 3 (both BPs) to a TNA director and employee for their personal benefit. During the same period TNA bought 20 aircraft from Airbus and the payments were intended to “reward improper favour” as it is described in the Statement of Facts, from TNA’s director and employee in respect of these purchases.
- The complex arrangements that were made with regard to the improper payments to the intermediaries and then to the TNA director and employee, and the split in payments contemplated, are described at paras 109 to 124 of the Statement of Facts. As is apparent, a total of $2,432,500 was paid to the Company of Intermediary 2 and $11,902,500 was paid to the Company of Intermediary 3. These arrangements were disguised and described by coded language used in emails passing between the wrongdoers, who included Airbus employee 1 [senior].
Count 4: Indonesia
- The fourth count alleges that contrary to section 7 of the Bribery Act 2010, between 1 July 2011 and 1 June 2015, Airbus SE failed to prevent persons associated with Airbus SE from bribing others concerned with the purchase of aircraft by PT Garuda Indonesia and Citilink Indonesia from Airbus, namely directors and employees of PT Garuda Indonesia and Citilink Indonesia, where the said bribery was intended to obtain or retain business or advantage in the conduct of business for Airbus SE.
- PT Garuda Indonesia (Persero) Tbk (Garuda) is the national airline of Indonesia. In 2006 the Indonesian Government owned 100 percent of Garuda. Citilink Indonesia (Citilink) is Garuda’s “low-cost” subsidiary. The Government’s stake in Garuda decreased to just over 60 percent in 2016. Airbus and Garuda have conducted business together since 1979.
- Between 2011 and 2014, a BP of Airbus (Intermediary 4) paid in excess of $3.3 million to or for the personal benefit of employees of Garuda and/or Citilink or their family members. Those Garuda/Citilink employees were key or significant decision makers in respect of Airbus business during that period, namely Garuda/Citilink’s purchase of 55 Airbus aircraft. The last of the relevant purchase agreements was dated 20 December 2012 and was for 25 A320s. The payments were intended to secure or reward improper favour by those Garuda/Citilink employees in respect of that business.
- The payments made (and the manner in which they were made) are set out at paras 159 to 169 of the Statement of Facts. They included payments by Intermediary 4 to a notary acting in the purchase of a residential property in Jakarta by a relative of Garuda Executive 1; payments to Garuda Executives 2 and 3 and a payment of $1,351,915 to a company beneficially owned by Garuda Executive 1 and his wife and incorporated in the British Virgin Islands. In consequence of money laundering concerns raised by Garuda Executive 1’s bank as to the source of the latter payment, a substantial amount of the total of
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these payments was eventually remitted to an account of Intermediary 4 in Singapore.
Count 5: Ghana
- The fifth count alleges that contrary to section 7 of the Bribery Act 2010, between 1 July 2011 and 1 June 2015 Airbus SE failed to prevent persons associated with Airbus SE from bribing others concerned with the purchase of military transport aircraft by the Government of Ghana, where the said bribery was intended to obtain or retain business or advantage in the conduct of business for Airbus SE.
- Between 2009 and 2015 an Airbus defence company engaged Intermediary 5, a close relative of a high ranking elected Ghanaian Government official (Government Official 1) as its BP in respect of the proposed sale of three military transport aircraft to the Government of Ghana. A number of Airbus employees knew that Intermediary 5 was a close relative of Government Official 1, who was a key decision maker in respect of the proposed sales. A number of Airbus employees made or promised success-based commission payments of approximately €5 million to Intermediary 5. False documentation was created by or with the agreement of Airbus employees in order to support and disguise these payments. The payments were intended to induce or reward “improper favour” by Government Official 1 towards Airbus. Payments were eventually stopped due to the arrangement failing the due diligence processes required by the Liquidation Committee.
- Airbus, through one of its Spanish defence subsidiaries, conducted two campaigns to sell its C-295 military transport aircraft to the Government of Ghana: the first campaign ran from 2009 to 2011, the second from 2013 to 2015. Intermediary 5, a UK national with no prior expertise in the aerospace industry, acted as the BP for Airbus in both. Company D was the corporate vehicle through which Intermediary 5 and his associates provided services to Airbus. His associates were Intermediaries 6 and 7, also UK nationals and there is no evidence they had any aerospace experience either. In August 2011, the purchase agreement for the sale of the two C-295 aircraft was signed by the Spanish defence subsidiary and the Government of Ghana, and it contained a declaration of compliance with the 1997 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, as well as a declaration that no more than €3,001,718.15 would be paid to BPs in connection with the contract (broadly, a 5 percent commission).
- After Company D made a formal BP application to Airbus in May 2011, Airbus commissioned an external due diligence report. In September 2011 this report identified Intermediary 5 as a shareholder of Company D. The report raised the possibility that he was a close relative of Government Official 1 and concerns that there was a risk of non-compliance with the OECD Convention. The reaction of a number of Airbus employees, including senior employees, and those involved in compliance, in an email chain in October 2011, is set out at para 188 of the Statement of Facts. In short, it was that the business should be conducted through a new third party, a company, already audited and engaged in the same area. A Spanish company, already an Airbus BP (Intermediary 8)
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and which had no previous links or experience of working in Ghana for any Airbus entity, was duly selected. A number of Airbus employees (two of them senior, and one involved in compliance) thus agreed to deliberately circumvent the proper compliance process by falsely representing that the work in the First Campaign had been done by Intermediary 8, which could, in turn, make the money available to Intermediary 5 and others. Further, the sum paid to Intermediary 8, and then by Intermediary 8 to Intermediary 5 exceeded (in the latter case by about €850,000) the agreed commission amount set out in the declaration of compliance referred to above.
56. Similar false representations to those detailed above were made in February 2014 and then in May 2015, in respect of work allegedly done by Intermediary 8 in respect of a further proposed purchase by the Government of Ghana of a C- 295. In this case however, the Liquidation Committee requested further due diligence before any payments were made; an external due diligence report was completed in respect of Intermediary 8, and Intermediary 8 declined to participate in interviews by external counsel Airbus had engaged to conduct extended due diligence interviews. Intermediary 8 therefore failed due diligence; Airbus did not enter into a second written contract or make any further commission payments (disputing Intermediary 5’s later claim that he was owed €1,675,000).
Previous Investigations and Conduct
57. In February 2018 Airbus entered into a civil administrative settlement relating to an investigation undertaken by the Munich public prosecutor. Airbus paid €81.25 million by way of disgorgement and an administrative fine of €250,000. The Munich prosecutor’s investigation focussed on potential corruption concerning the sale by Airbus Defence and Space GmbH, of Eurofighter aircraft to Austria in 2003. The settlement set out that Airbus Defence and Space GmbH acted negligently by failing to ensure proper internal controls to prevent the misuse of company assets/breach of trust by employees who were found to have paid money to providers without documented services. The prosecutor confirmed in the settlement that it had found no evidence of bribery payments. In all the circumstances, this conduct is not material in my view to the matters I have to consider in determining this application.
The interests of justice analysis
- Having set out the relevant factual and legal background in this case, I can now turn to the interests of justice analysis. The DPA Code which the Director of Public Prosecutions and the Director of the SFO are required to issue, must give guidance on the general principles to be applied in determining whether a DPA is likely to be appropriate in a given case: see para 6(1)(a) of Schedule 17 to the 2013 Act. In addition, CrPR 11.3(3)(i) requires any application for a DPA to explain why such an agreement is likely to be in the interests of justice and complies with the other requirements.
- The DPA Code identifies that the public interest factors that can affect the decision to prosecute, usually depend on the seriousness of the offence, which includes the culpability of the relevant entity (P), and the harm to the victim;
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and that a prosecution will usually take place unless there are public interest factors against prosecution which clearly outweigh those tending in favour of prosecution: see Section 2.5 of the DPA Code. Section 2.6 of the DPA Code provides that:
“In applying the public interest factors when considering whether to charge, seek to enter a DPA or take no further criminal action the prosecutor undertakes a balancing exercise of the factors that tend to support prosecution and those that do not. This is an exercise of discretion. Which factors are considered relevant and what weight is given to each are matters for the individual prosecutor. It is quite possible that one public interest factor alone may outweigh a number of other factors in the opposite direction. Decisions will be made on an individual case by case basis.”
- Materially for present purposes, amongst the other (non-exhaustive) factors identified in favour of prosecution that the prosecutor may take into account when deciding whether to enter into a DPA, and which the SFO had regard to in this case, are the fact that the conduct alleged is part of the established business practice of P; the adverse impact on the conduct and integrity or confidence of markets, and local or national governments and regulatory sanctions against P for similar conduct: see Section 2.8.1 of the DPA Code.
- As against that, the public interest factors against prosecution that a prosecutor may take into account and which the SFO concluded outweighed the public interest factors in favour of prosecution in this case, include P’s co-operation with the SFO investigation; substantial remedial measures taken by P; the potential disproportionate consequences for P of a conviction under domestic law and the law of another jurisdiction; the likely collateral effects on the public, P’s employees and shareholders or P’s and/or institutional pension holders of a conviction and the fact that there is no previous criminality: see Section 2.8.2 of the DPA Code.
- In my view, the factors identified as relevant here by the SFO are those that are material and can form the proper background to an assessment of the statutory requirement in paras 7(1) and 8(1) of Schedule 17 to the 2013 Act, namely that entering into a DPA is likely to be and is, in the interests of justice and that the proposed and actual terms are fair reasonable and proportionate.
63. The nature of the offending, including the harm caused, the duration of the conduct, the circumstances giving rise to it, the sophistication of the methods used, whether or not a cover-up was attempted, the seniority of the people involved, the payments wrongly made, whether public officials were involved and whether the offending was multi-jurisdictional are all relevant factors in the assessment of seriousness. In Sarclad it was said that the more serious the
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offence, the more likely it is that prosecution will be required in the public interest and the less likely it is that a DPA will be in the interests of justice: see paras 33 to 35 of the preliminary judgment. Nonetheless, the level of seriousness has to be balanced against the other matters which are or may be relevant in the individual case.
- The seriousness of the criminality in this case hardly needs to be spelled out. As is acknowledged on all sides, it was grave. The conduct took place over many years. It is no exaggeration to describe the investigation it gave rise to as worldwide, extending into every continent in which Airbus operates. The number of countries subject to intense criminal investigation by the various agencies, and the scale and scope of the wrongdoing disclosed in the Statement of Facts demonstrate that bribery was, to the extent indicated, endemic in two core business areas within Airbus.
- Bribery usually involves two sides: those willing to pay a bribe and those willing to take a bribe. As I have identified, Airbus did have bribery prevention policies and procedures in place at the material time. However, prior to September 2014, those policies and procedures were easily bypassed or breached and there existed a corporate culture which permitted bribery by Airbus business partners and/or employees to be committed throughout the world. In this case, on the Airbus side, the wrongdoing involved a number of very senior, senior and other other employees, including employees with compliance responsibilities. The conduct by some included the creation of false invoices, false payment and other compliance material and the deliberate circumvention of both Airbus’ internal compliance procedures and external compliance procedures. In some cases, the wrongdoing involved public officials and employees/directors of companies in which nation states held a significant interest. The weakness of senior corporate oversight, and the seriousness of the offending overall, must be considered in the context of the increased awareness internationally of the pernicious nature of corrupt business practices; and the obvious vulnerabilities of businesses operating in and selling in international markets, as Airbus does.
- Calculation of the financial gain all this involved is not an easy exercise. However, for the purposes of assessing the sum for disgorgement of profit in this case, it can be taken that this was, to put it at its lowest, very considerable. The gross profit made in consequence of this wrongdoing has been agreed for these purposes at between €585,939,740 and €983,540,822, depending on what allowance is made for the deduction of relevant costs. The market in which Airbus operates is, as Mr Keith QC acknowledged, dominated by two main companies. Given the nature and scale of what occurred, it cannot be gainsaid that Airbus’ failure to prevent this financially motivated offending has resulted in substantial harm to the integrity and confidence of markets.
- The real question therefore is whether in these circumstances, and given this extremely high level of seriousness, the interests of justice are nevertheless served by a DPA rather than a prosecution.
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Self-reporting and co-operation
- A core purpose of the creation of DPAs was to ‘incentivise’ the exposure and self-report of corporate wrongdoing: see Sarclad at para 16 of the final judgment. Self-reporting, as it is called, and the subsequent level and quality of co-operation can therefore be critical factors when considering the interests of justice. It would be wrong to look at the issue of self-reporting purely from the perspective of the first report of wrongdoing, however. Even if the prosecuting authorities became aware of the relevant conduct by the actions of a third party, if subsequent self-reporting or co-operation overall, is of a high quality and brings significant wrongdoing to light that would not otherwise have come to the attention of the authorities, this will be a significant factor in favour of a DPA: see Rolls Royce para 22 of the final judgment and Sarclad at paras 37 to 38 of the preliminary judgment. To that extent, there is no necessary bright line between self-reporting and co-operation.
- In this case, it is apparent from everything that I have seen, after what might be described as a slow start, when, it must have been apparent to others within Airbus that all was not well within SMO International, that Airbus have co- operated with the prosecuting authorities conducting the investigations, to the fullest extent possible.
- I have described this as a slow start, because of the concerns there obviously were within Airbus from at least October 2014, when the freeze referred to at para 29 above, was imposed in respect of payments to BPs and third parties. It can reasonably be supposed that this would not have happened without some serious concerns internally as to the propriety of those payments or the integrity of the oversight structures. Airbus then conducted internal investigations into what had occurred and took the steps identified in paras 29 to 31 above. These steps may have been hampered by the continued presence on the relevant committees of some of the wrongdoers and the provision of false and inaccurate information to them. Nevertheless, the steps taken prevented some substantial corrupt payments being made or agreements associated with them, being entered into (see paras 53 and 56 above for example).
- In the event however, as already described, matters did not come to the attention of the SFO until April 2016 and the true catalyst for this was the watchfulness of UKEF (to its credit). The internal review by Airbus, which followed from its engagement with UKEF, resulted in Airbus’ fulsome disclosure in March 2016 of matters of concern to UKEF, including red flags for corruption, at a time when Airbus had been notified of UKEF’s obligations to disclose to the SFO; and secondly, direct engagement with the SFO from 1 April 2016.
- On the issue of reporting, it is to be noted that through its engagement with the SFO related in the first instance to matters concerning UKEF, Airbus also accepted that the Bribery Act 2010 provided the SFO with extended extraterritorial powers and with a potential interest in the facts post 2011. This was an unprecedented step for a Dutch and French domiciled company to take, in respect of the reporting of conduct which had taken place almost exclusively overseas.
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- Airbus could have moved more quickly. Having said this, since engaging with the SFO, Airbus has provided the fullest co-operation. Whether the co-operation is to be described as extraordinary, or exemplary, the adjectives used respectively by Mr Keith QC and Mr Lewis QC during the course of submissions, seems to me make little difference of substance to the overall issues I have to consider. In my judgment, the co-operation provided was exemplary.
- The list of all that has been done by Airbus is a long one but in view of the seriousness of the predicate conduct, and my overall conclusion on the interests of justice in this case, it is important to set it out. Airbus has (i) comprehensively confirmed the existence of corruption concerns across its Commercial, Defence and Space and Helicopter divisions; (ii) identified to the JIT a comprehensive compilation of red flag cases across divisions of which the JIT was not aware; (iii) accepted that the Bribery Act had provided the SFO with extended extraterritorial powers and potential interest in the facts post 2011; (iv) reported conduct which had taken place almost exclusively overseas, which, as I have already said, is an exemplary step for a French and Dutch domiciled company; (v) performed and presented an analysis of all BP relationships in the company’s records; (vi) provided a list of former BPs, which included an anti-corruption risk assessment, including red flags not otherwise known to the authorities, from which the JIT could select its priorities for investigation; (vii) collected in excess of 30.5 million documents post de-duplication relevant to the JIT investigation, from over 200 custodians; (viii) signalled a clear commitment from the new Airbus Board and its Ethics & Compliance Committee (responsible for the internal investigation) to fully co-operate with the JIT investigation and provided an open invitation for the JIT to discuss any concerns directly with the Committee; (ix) coordinated and cooperated with the JIT in all respects regarding the conduct of investigative interviews; (x) provided the first accounts of all relevant individuals (xi) provided extensive and detailed presentations with supporting documentation, organograms and chronologies detailing relevant emails, contracts, interview accounts, contextual background, invoices, payments and accounting records; (xii) deployed predictive coding technology to assist in the prioritization and identification of relevant contemporaneous documents; (xiii) facilitated access to 30.7 million documents collected from custodians relevant to the JIT investigation, and enabled the JIT to perform a review of these documents independent of Airbus. Independent investigation by the SFO did not identify any company document not identified by Airbus’ own investigation; (xiv) provided all contemporaneous documents requested (subject to applicable laws) and adopted a co-operative position in respect of privilege and French secret professionnel (the French equivalent of legal professional privilege) within such contemporaneous documents; (xv) provided a schedule of contemporaneous documents withheld on the basis of privilege, including the reasons for asserting privilege, which were verified by the SFO; (xvi) set up the International Market Development taskforce with a mandate to identify noncore subsidiaries that were of potential concern and notified the JIT of International Market and Development Projects that were of potential concern from a compliance perspective and the actions that Airbus wished to take in respect of those projects to ensure they did not conflict with JIT actions; (xvii) provided key documentation and information concerning
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bank accounts into which Airbus monies flowed at an early stage of the investigation to facilitate swift access to mutual legal assistance by the SFO; (xviii) revised the top management of Airbus and parted with a substantial number of individuals by dismissal, voluntarily or in compromised circumstances permitted by French law; (xix) stopped using BPs to assist with sales in the Commercial Division, and greatly restricted the use of BPs in other divisions, leading to a 95 percent reduction across the Group by 2015; (xx) provided reports of the Independent Compliance Review Panel’s assessment of Airbus’ compliance processes, organisation and culture; (xxi) made external accountants and internal personnel available to present and explain financial processes and money flows; (xxii) consulted with the JIT regarding the deployment of sensitive evidence in Arbitration proceedings with former BPs so as to ensure no prejudice was caused to ongoing investigations; (xxiii) liaised with the JIT regarding media strategy and (xxiv) kept the JIT abreast of the implementation of Airbus’ new compliance program, including instances where it has detected activity that causes concern.
Remedial measures and cultural change
- As was noted in Rolls Royce at para 60 of the final judgment, the DPA regime, can include requirements not available as penalties following a successful prosecution, and provides an opportunity to require an organisation to become a flagship of good practice.
- I have already referred to the weaknesses in oversight within Airbus that existed in the years under consideration. However, starting in late 2014 Airbus implemented a number of measures. It is submitted that these have transformed Airbus into what is, for present purposes (in relation to issues of compliance, culture and the like) effectively a different company to the one that it was at the time the offences alleged in the indictment occurred. I am satisfied this is the case.
- As Sir Brian Leveson P. observed in Tesco Stores Ltd at para 53 of the final judgment:
“It is important to underline that a company is a structure which can only operate through its directors, employees and agents. Stripping out the human beings, a company itself can have no will or ability to decide how it should behave. Thus, as I made clear in SFO v Rolls-Royce and another (U20170036) at , it is “of real significance” whether or not those who were implicated in or should have been aware of illegal behaviour, or of a culture which permitted illegality to thrive, remain members of the senior management.”
- Airbus has changed its management team, appointing a new Chief Executive Officer, supported by a new Chief Finance Officer and new General Counsel (the latter was present in court during the hearings before me). None of the new
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Executive Committee or Board of Directors is implicated in the conduct set out in the Statement of Facts. The Board of Directors is largely a different board (8 of the 12 positions being held by directors appointed after the relevant conduct occurred) from that which presided over Airbus during the indictment period. The SFO has confirmed it has no evidence that the current Executive Committee members knew of the corrupt practices or culture of Airbus. Airbus has also conducted disciplinary investigations against existing and former employees. Since 2015 it has parted with sixty three of its top and senior management employees: thirty one have been dismissed, and thirty two have left voluntarily or retired.
- In addition, Airbus has made significant changes to its internal processes. As with co-operation, in view of the weight I attach to this factor in the overall assessment of the interests of justice, it is necessary to identify precisely what has occurred. Airbus has commissioned an Independent Compliance Review Panel (ICRP) to complete an independent review of Airbus’ ethics and compliance procedures. The members of this panel are Lord Gold, a former partner at Herbert Smith Freehills; Noelle Lenoir, a former member of the Conseil Constitutionnel (the French Constitutional Court) and Theo Waigel, a former German Federal Minister of Finance. The ICRP’s instructions have included reviewing Airbus’ policies and procedures, conducting site visits with employees and carrying out focus groups with employees. The ICRP has produced two reports to date. The first report in 2018 noted the considerable progress made by Airbus and made fifty five recommendations. The second report, in 2019, noted that “the company is now in a very different place than it was two years ago”. The ICRP is due to issue another report later this year. Further, the Airbus Ethics and Compliance teams have been restructured to ensure functional independence from the business. Amongst other things, there has been a merger of legal and compliance functions and the change of the reporting line to the newly appointed General Counsel; the creation of a sub- committee of the Board, entitled the Ethics & Compliance Committee to provide independent oversight of the company’s Ethics & Compliance programme; and appointed a new Ethics & Compliance Officer with changed reporting lines directly to the General Counsel and the Ethics & Compliance Committee.
- In addition, Airbus has (i) created numerous new compliance roles and extensively recruited highly experienced senior compliance professionals; (ii) revised its Anti-Bribery and Corruption policies and procedures in response to recommendations by external stakeholders, the ICRP, PwC and Agence Française Anticorruption (AFA), the French state anti-corruption agency which is positioned within the Ministry of Justice and headed by a Magistrate; (iii) launched a company-wide, systemic and comprehensive ABC Risk Assessment; (iv) significantly reduced the use of external consultants across the Airbus group of companies, and has stopped the use of consultants in relation to sales of aircraft within the Commercial Aircraft Division; (v) redesigned the ‘onboarding’, due diligence and ongoing monitoring for all third parties with a business relationship with the Airbus group; (v) implemented a targeted ABC 24 month training plan under the supervision of the Ethics and Compliance Engagement Team for all employees identified in high and medium risk
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exposed positions; (vi) redesigned the internal financial controls under the guidance of the new Chief Financial Officer; (vii) commissioned the independent review and testing of its compliance structures and procedures by the ICRP, PwC and the AFA; and (viii) taken steps to remove all wrongdoers from employment with Airbus.
81. The current Board is to be commended for the process of remediation it has undertaken. It is important to note that in light of the changes to which I have referred, and the appointment of the AFA, as a term of the French CJIP, the SFO is not recommending the appointment of an external monitor as part of the DPA in this case.
- The disproportionate non-penal legal consequences for an organisation or the likely collateral effects of a prosecution and conviction on an organisation’s employees or on the public (for this purpose, this can include the wider industry, investors, pension scheme members, third parties and other stakeholders) is plainly an important consideration. As was explained in in Sarclad at para 45 of the preliminary judgment, the Government has made:
“…a policy choice in bringing DPAs into the law of England and Wales, that a company’s shareholders, customers and employees (as well as all those with whom it deals) are far better served by self-reporting and putting in place effective compliance structures. When it does so, that openness must be rewarded and be seen to be worthwhile.”
- There are limits to this however; and it is plainly not the case that the fact that a company is a large one, or that the collateral consequences are accordingly severe, means it is immune to prosecution. No company is too big to prosecute. Moreover, the national economic interest is irrelevant to the analysis of the question whether or not a DPA is in the interests of justice: see Tesco Stores Ltd at para 63 of the final judgment. Having said that however, a relevant factor may be, and indeed is in this case, the efficient use of public resources. As Sir Brian Leveson P. put it at para 65 of the final judgment in Tesco Stores Ltd:
“65. Of less importance, but still relevant, is the efficient use of public resources to investigate the endemic problems of serious fraud. Those resources most significantly are resources of expertise and time, both of which are hard pressed.
66. Another aspect of using public resources efficiently (as I have made clear in each of the DPAs that have been negotiated) is to encourage and incentivise the self- reporting of wrong-doing by corporate entities in a
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similar situation to Tesco Stores and Tesco plc: see para. 2.9 of the Code.”
- On the issue of the potential disproportionate consequences of a conviction, on behalf of Airbus, it has been said that a criminal conviction would have a number of materially adverse consequences. There is nothing I have seen in the evidence that has been placed before me which suggests that these consequences are not accurately described. These consequences include the following. A conviction for a section 7 bribery offence could result in discretionary debarment from tendering for UK public sector contracts under the Public Contracts Regulations 2015, which implement the EU Procurement Directive (it is not an offence which requires mandatory exclusion in the Regulations)
- What matters here is not the potential loss of contracts per se, but the effect this will have on the company financially and on its (innocent) employees, and the wider effects this will have on innocent third parties. Airbus has undertaken an analysis of the value of contracts which it might be precluded from tendering for if debarred, the effects of which could last up to fifteen years. On a worst case scenario, the estimated future revenue at risk globally across the Commercial, Defence and Space and Helicopter divisions could exceed €200 billion, which could decrease the value of production of Airbus in the United States, the UK, France, Germany, and Spain by over €200 billion.
- Secondly, there are obvious associated risks to debarment on the scale contemplated, including to the financial position of Airbus, its financing arrangements, and to the internal health of the company caused by the loss of key revenue streams and the loss of market presence in the duopolistic marketplace in which Airbus operates. These would inevitably affect Airbus’ thousands of employees in the United Kingdom, its share price, and thus pensioners and the thousands of companies and jobs which rely on Airbus, as part of its supply chain. The collateral effects spread more widely, however. A Deloitte report, commissioned by Airbus, has estimated for example that if Airbus was debarred from public procurement for five years, the ongoing effects over fifteen years, could put many thousands of jobs at Airbus at risk. Across that timeframe, and absent debarment, many thousands of jobs could be sustained, in the UK, the United States, Germany, France and Spain. The
1 It should be noted that the position is therefore not the one contemplated in Serco Geografix at para 27, where concern seems to have been expressed that a DPA made in circumstances where debarment in this jurisdiction would be mandatory, would amount to a favourable determination of the position of a private company vis-à-vis public procurement and would or might involve the court in a quasi-political decision. Whether discretionary debarment follows from the facts giving rise to a DPA, remains a discretionary decision of HM Government.
thus excluding the company from participation in procurement procedures. could also occur in other EU jurisdictions. Further, Mr Keith QC identified that it would be likely that a conviction would result in a mandatory debarment from tendering for public sector contracts in the Netherlands, India, Turkey and the UAE amongst other jurisdictions; and that discretionary debarment in this jurisdiction, would, in any event, increase the risk of discretionary debarment in many other jurisdictions.
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indirect impact on the economies of these countries could be substantial: Deloitte estimates it could lower the Gross Domestic Product in each of those countries by over €100 billion. In addition, there could be adverse consequences for the reduction in competition in future public tenders, leading to additional public spending of many billions of euros..
Conclusions on the interests of justice
87. Notwithstanding the seriousness of the conduct in this case, I consider the public interest factors against prosecution clearly outweigh those tending in favour of prosecution. In particular, I have had regard to the exemplary co-operation of Airbus in the manner identified, including its submission to the SFO in respect of conduct overseas and of which the SFO would not otherwise have known. Airbus has, to use a colloquial phrase, truly turned out its pockets and is now a changed company to that which existed when the wrongdoing occurred. In addition, on the evidence before me, the effects of a prosecution on Airbus and the collateral effects on thousands of innocent third parties, corporate and individual, would be disproportionate notwithstanding the egregious nature of the conduct engaged in.
Terms of the DPA
- I have also concluded that the terms of the DPA are fair reasonable and proportionate. These terms will now be made public. In summary they are as follows. The DPA will come to an end three years from the date of the declaration which I have made today. Airbus will pay a total financial sanction of €983,974,311 to the SFO for onward transmission to the Consolidated Fund, within 30 days of this declaration. Airbus will continue to make improvements to its ethics and compliance policies and procedures. There will be ongoing co- operation and self-reporting by Airbus and Airbus will pay the reasonable costs of the SFO’s investigation in relation to the alleged offences and the DPA (€6,989,401).
- Paragraph 5 of Schedule 17 to the 2013 Act provides as follows:
“(1) A DPA must contain a statement of facts relating to the alleged offence, which may include admissions made by P.
(2) ADPAmustspecifyanexpirydate,whichisthedate on which the DPA ceases to have effect if it has not already been terminated under paragraph 9 (breach).
(3) The requirements that a DPA may impose on P include, but are not limited to, the following requirements—
(a) to pay to the prosecutor a financial penalty;
(b) to compensate victims of the alleged offence; (c) to donate money to a charity or other third party;
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(d) to disgorge any profits made by P from the alleged offence;
(e) to implement a compliance programme or make changes to an existing compliance programme relating to P’s policies or to the training of P’s employees or both;
(f) to co-operate in any investigation related to the alleged offence;
(g) to pay any reasonable costs of the prosecutor in relation to the alleged offence or the DPA. The DPA may impose time limits within which P must comply with the requirements imposed on P.
(4) The amount of any financial penalty agreed between the prosecutor and P must be broadly comparable to the fine that a court would have imposed on P on conviction for the alleged offence following a guilty plea.
(5) A DPA may include a term setting out the consequences of a failure by P to comply with any of its terms.”
90. This question is determined on the basis of the terms of the DPA and the individual circumstances of the case. In respect of this aspect of the regime, Sir Brian Leveson P. explained in Standard Bank Plc at para 21 of the final judgment that:
“…the court has assumed a pivotal role in the assessment of… [the DPA’s] terms. That has required a detailed analysis of the circumstances of the investigated offence, and an assessment of the financial penalties that would have been imposed had the Bank been convicted of an offence. In that way, there is no question of the parties having reached a private compromise without appropriate independent judicial consideration of the public interest…”
91. A DPA must be of sufficient length such that the proposed terms are effective and their aims accomplished: see Sarclad at para 50 of the preliminary judgment. I am satisfied that length in this case of three years is sufficient. This is because the relevant payments under the DPA will be made within 30 days of my declaration under para 8, extensive remedial measures have already been taken by Airbus and the AFA has been appointed to monitor Airbus, for the duration of the agreement.
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92. The parties have been required to work within the framework of the overall financial settlement agreed across the three jurisdictions. In light of this, the approach taken reflects to an extent French primacy in the investigation. It is important, from the court’s perspective, that international co-operation is encouraged. In R v Innospec 2010 WL 3580845, the point was made that coherence in the level of financial penalties across different jurisdictions in cases of corporate wrongdoing is important so that forum shopping for the settlement of these kinds of cases is avoided. Nevertheless, the approach taken in this case still falls to be analysed in accordance with the sentencing provisions and other relevant rules of this jurisdiction.
The Financial Sanction
93. The relevant sentencing guideline is the Fraud, Bribery and Money Laundering Sentencing Guideline: Corporate Offenders (the Guideline). The Guideline states at Step 5 that the combination of orders made, compensation, confiscation and fine ought to achieve the removal of all gain, appropriate additional punishment and deterrence.
- As explained in Sarclad at para 52 of the preliminary judgment:
“Priority must be given to payment of compensation over fines: see SFO v Standard Bank, at , reflecting para. 5(3)(b) of Schedule 17, para 7.2 of the DPA Code of Practice, s. 130(12) of the Power of Criminal Courts Act 2000 (“2000 Act”) and the Definitive Guideline issued by the Sentencing Council in respect of Fraud, Bribery and Money Laundering Offences (“the guideline”): in relation to corporate offenders.”
- In this case, the SFO is not applying for compensation, and on the facts, I consider it is right not to do so. Step I of the Guideline refers to section 130 of the Powers of Criminal Courts (Sentencing) Act 2000, and states the court must consider making a compensation order, and reasons should be given if a compensation order is not made. However, it is plain that the machinery of a compensation order is intended for clear and simple cases: see R v Michael Brian Kneeshaw (1974) 57 Cr.App.R 439 and R v Kenneth Donovan (1981) 3 Cr.App.R. (S) 192. See further the guidance provided in R v Ben Stapylton  EWCA Crim 728 and SFO v XYZ (U20150856) 8 July 2016 at para 41.
- The SFO has referred me to its joint statement of principle with the CPS and the National Crime Agency dated 1 June 2018, which says that it will consider the question of compensation in every case. It also acknowledges that compensation for victims should be sought when addressing corporate offending, and where this is not possible, reasons must be given. In this case, three reasons are given
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for its decision not to ask for compensation, with which I agree. First, the SFO cannot easily identify a quantifiable loss arising from the criminal conduct concerned. Secondly, there is no evidence that any of the products or services which Airbus sold to customers were defective or unwanted, so as to justify a legal claim for the value of an adequate replacement. Thirdly, the DPA does not prevent any victims that there may be, from claiming compensation.
- The DPA includes a provision for the disgorgement of €585,939,740, representing the gross profit of conduct covered by the five counts on the Indictment. I have been taken through the calculations made in the course of submissions. I am satisfied with the careful methodology used. I am also satisfied that the figure thereby arrived at is one that fairly reflects the gross profit made by the wrongdoing reflected by those counts. Airbus instructed specialist financial consultants, Forensic Risk Alliance (FRA) to analyse underlying financial material and to prepare submissions on gross profit for the SFO. The SFO in turn instructed specialist financial consultants (BDO) to review FRA’s methodology and sample tested the underlying documents. Representatives of Airbus and FRA have provided satisfactory certifications that the figures used are fair and accurate; and on this basis the figures for disgorgement and penalty are based on the agreed position following analysis by both FRA and BDO. It is the agreed position that the gross profit figure is higher in the case of each count for the basis of fine calculation than it is for the purposes of disgorgement. This is because the parties have sought to reflect the principles of totality and proportionality, to which the court must have regard when conducting any sentencing exercise, and the wider global resolution of the case, by limiting the inclusion of certain costs attributable to each contract in relation to the fine calculation.
- It is also agreed that the gross profit earned prior to implementation of the Bribery Act 2010 on 1 July 2011 does not fall to be disgorged and that only profit from deliveries which have occurred by 31 March 2020 should be included. Airbus asserts that it is difficult to forecast profitability accurately beyond this point and the SFO accepts that for industry-specific reasons, there is declining certainty of delivery over time. It should be noted that no aircraft were delivered between 1 July 2011 and 31 March 2020 in relation to Sri Lanka contract 2, Malaysia contract 8 and Indonesia contract 5 and no disgorgement of profit is therefore sought in respect of those contracts. Further, the SFO has not sought disgorgement of profits in respect of Ghana contract 1 because Airbus will be fined an equivalent amount by the DOJ for suspected criminal violations of ITAR.
The Financial Penalty
99. Para 5(4) of Schedule 17 to the 2013 Act requires any financial penalty to be comparable to a fine imposed on conviction after a guilty plea. This para must be read with section 143 of the Criminal Justice Act 2003 (requiring the court to consider the offender’s culpability and any intended or foreseeable harm caused) and the particular Sentencing Guideline that prescribes an approach to be followed, unless it is contrary to the interests of justice to do so: see s. 125(1)
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of the Coroners and Justice Act 2009. Further, Step 4 of the Guideline requires the sentencing court to take account of the financial circumstances of the defendant: see also CrPR PD VII Q.4.
- Step 3 of the Guideline, states that harm is to be represented by way of a financial sum, and for offences of bribery the appropriate figure will normally be the gross profit from the contract obtained, retained or sought as a result of the offending. It goes on to state that for section 7 Bribery Act 2010 offences “An alternative measure for offences under section 7 may be the likely costs avoided by failing to put in place appropriate measures to prevent bribery”. As the SFO points out, gross profit is the basis of penalty calculations in all cases where corruption offences have been sentenced, and it is not suggested there is any reason to depart from that basis in this case. It is to be noted that the calculation of gross profit used does not necessarily reflect the way in which gross profit would be approached by accountants, for the purposes of accountancy reporting standards.
- I have already addressed the fact that fewer deductions from the gross profit figures have been made in respect of the financial basis for a fine for each count than have been made for the calculation of gross profit for disgorgement. The approach to permissible deductions for the purpose of the gross profit penalty calculation for the Commercial Division is consistent with the position taken by the PNF in its penalty calculation. The fine has been calculated on the basis of the gross profit earned from aircraft delivered between 1 July 2011 and until 31 March 2020. The appropriate figure taken as a basis of the fine calculation in respect of the Commercial Division (before applying any multiplier or discount) is €954,334,060.
- Although the harm figure is generally calculated by reference to a 31 March 2020 delivery date, that cannot apply where it would result in a nil harm figure, and hence a nil fine element in respect of a contract obtained through bribery. As already indicated, the Guideline provides that for offences under the Bribery Act “the appropriate figure will normally be the gross profit from the contract obtained, retained or sought as a result of the offending” [emphasis added]. However for reasons of totality and proportionality and to assist in the wider global resolution of this case, this approach is not taken in the DPA. Instead, the following approaches have properly been taken. In the case of Sri Lanka contract 2, there is no separate penalty because the offending in respect of contract 1 is closely linked in time to the offending in contract 2 and already appropriately dealt with by the fine imposed in respect of Sri Lanka contract 1. In respect of Indonesia contract 5, the appropriate figure forming the basis of the fine is the value of the relevant promised fee to the business partner in respect of the contract, namely $10 million (which for the purpose of the financial calculation has been converted into Euros as at 20 December 2012). In respect of Malaysia contract 8, the appropriate figure forming the basis of the fine is the value of the bribe offered or promised, namely $55 million (which for the purpose of the financial calculation has been converted into Euros as at 15 December 2015).
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- The appropriate figure as a basis of the fine in respect of these contracts calculated on this basis is €57,962,857. This figure is included within the €954,334,060 referred to at para 101.
- Regarding count 5, as I have mentioned, the DOJ intends to impose a fine in respect of International Traffic in Arms Regulations violations in a number of jurisdictions, including in respect of Ghana contract 1. The conduct subject to the DOJ resolution concerns misstatements made by the company when applying for licences to supply controlled defence products and services and the fine is likely to be €18,055,267. For the purposes of the fine in respect of Ghana contracts 1 and 2, the same methodology has been adopted as the DOJ to calculate the associated gross profit, in the interests of consistency with the financial sanction globally. Accordingly, the gross profit figure as a basis of the fine calculation in respect of Ghana contracts 1 and 2 for aircrafts delivered between 1 July 2011 and 31 March 2020 is €29,206,762.
- Having determined harm, the next step is culpability. The Guideline identifies a non-exhaustive hierarchy of the culpability characteristics used to determine into which of three categories of culpability, High (A), Medium (B) or Low (C) the conduct falls. Using the appropriate culpability category, a starting point for a multiplier to the harm figure can be derived. Adjusting within the category range for aggravating and mitigating factors (again by reference to a non- exhaustive list set out in the Guideline) allows for the assessment of a final multiplier. The Guideline recognises that the culpability might be such that it is appropriate to move outside the category range altogether.
- I agree with the categories of culpability and the harm multipliers arrived at by the parties as they reflect the level of culpability on each count.
- The parties have taken the approach of assessing culpability, as with harm, on a count by count basis in order to ensure a comprehensive approach to different types of conduct involving different persons, industries and time periods. This is also an approach I agree with.
- Common to all the counts is the fact that during the indictment period Airbus did have some bribery prevention policies and procedures in place. However prior to September 2014 these policies and procedures were easily bypassed or breached and there was a corporate culture which permitted bribery by Airbus in countries throughout the world. From September 2014 the situation improved in stages. A number of factors place counts 1 to 3, and count 5 in the highest category, that is Category A. For example, abuse of dominant market position, or position of trust and responsibility, the offending took place over a sustained period of time and involved senior employees. Count 4 is in Category B, medium culpability, because no Airbus employees are alleged to be party to the predicate bribery. The harm figure multiplier for Category A offending has a starting point of 300 percent with a category range of 250 to 400 percent; and for Category B offending has a starting point of 200 percent with a category range of 100 to 300 percent.
- If a fine was to be determined separately for each count, this would result in an aggregate gross profit as a basis of fine of €983,540,822, before applying the
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multiplier for each count separately and having regard to totality and discount. The parties submit and I agree that such a sum, added to the separate disgorgement figure of €585,939,740, would not be just and proportionate, taking into account the factors in the Guideline. As part of coming to this conclusion I also take into account the significant penalties that Airbus will be receiving as a result of the arrangements made with the PNF, DOJ and DOS in respect of related conduct. These cumulatively, amount to €2,608,792,455.
- In respect of counts 1 to 4, in the interests of totality and proportionality, the multiplier to be applied to the harm figures for those counts is set at the highest level of that arrived for those counts, that is at 300 percent. For the same reasons, the parties have averaged the gross profit basis of the fines across counts 1 to 4. This leads to a harm penalty of €715,750,545. In respect of count 5, the harm penalty is €80,318,596. I agree that this approach leads to a more appropriate overall penalty, prior to consideration of discount.
- The financial penalty should be subject to a level of discount in this case. The considerations and principles in respect of discounts in DPAs were explained in Serco Geografix Limited at para 39 of the final judgment:
“It is necessary and appropriate for the financial penalty to provide a discount equivalent to the discount for a plea of guilty. In all but one of the earlier instances of approval of DPAs the financial penalty has been discounted by 50% rather than one third as would be required by the Sentencing Council guideline on full discount for plea at the earliest opportunity. This has been because engagement in the DPA process saves so much time and money on investigation and prosecution which justifies a higher discount. Moreover, the discount has been extended in other cases to encourage corporate responsibility in terms of early reporting of criminal conduct by the company. Both factors apply in this case.”
- Taking into account Airbus’ agreement to resolve by a DPA the broad range of conduct in the proposed indictment, a full reduction of one third of the proposed penalty, adjusted for totality, should be allowed so as to reflect the fine that would likely be imposed upon a conviction after a guilty plea. Further, in order to take account of Airbus’ exemplary cooperation and remediation, a further discount of 16.7 percent is justified taking the total discount of the penalty to 50 percent. This gives a penalty figure for all counts of €398,034,571. Airbus has made no submission that it does not have the means or ability to pay such a sum.
- The total financial payment to be made by Airbus under the DPA and the settlements to be reached in the other investigating jurisdictions amounts to €3,592,766,766 which is significantly in excess of Airbus’ annual Free Cash Flow for 2018 of €2.912 billion. Mr Keith QC has confirmed that the penalty figure, added to the disgorgement figure in this case, will have a real economic impact on the operation of the company. The DPA also, appropriately, confirms
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that no tax reduction will be sought by Airbus in respect of payment of the financial penalty.
114. The point has been made in relation to other DPAs (in Tesco Stores Ltd at para 73 of the main judgment for example) that as the entity subject to the DPA will normally be the main repository of relevant material for the purposes of prosecuting the individuals involved in the same criminal conduct, it is likely to be fair, reasonable and proportionate that the entity is required to provide assistance in the investigation and prosecution of those individuals. In summary, the DPA provides that Airbus will continue to co-operate with the SFO and other agencies for the duration of the agreement. Airbus further agrees that as part of its cooperation, it shall promptly report to the SFO any evidence or allegation of fraud that comes into its knowledge.
115. The DPA includes provisions requiring Airbus to continue to implement and review its compliance improvements and the appointment of the AFA to act as monitor of Airbus’ compliance for the duration of the agreement. These provisions are clearly fair, reasonable and proportionate.
116. As explained in Rolls-Royce at para 124 of the final judgment, in relation to
“As a matter of public policy, it is appropriate that a defendant with means to do so should pay the costs incurred by the Crown arising out of an investigation and (in those cases) prosecution: see para. 3.4 of The Criminal Practice Direction (Costs in Criminal Proceedings) Amendment No. 1. Furthermore, para. 7.2 of the DPA Code of Practice states that costs should ordinarily be sought.”
117. The DPA requires Airbus to pay the SFO’s reasonable costs in relation to the investigation and the entering into of this agreement. These amount to €6,989,401 for work prior to 17 January 2020 along with a sum covering the period from this date until my final approval of the DPA today. No tax deduction will be sought in respect of this payment.
End of investigations
118. Lastly, it should be noted that the DPA brings to a close the SFO’s investigation into Airbus and its controlled subsidiaries, other than a separate investigation into GPT (SPM) Ltd. The SFO has also indicated that it has no intention of conducting any further investigation or prosecution of Airbus SE and its
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controlled subsidiaries (other than GPT) for the matters disclosed to it prior to this DPA and in the agreements reached with the PNF, DOJ and DOS.
119. Finally, I should say this about the DPA, its specific terms and beneficial effects. The DPA requires Airbus to pay a significant financial penalty, thereby sending an important deterrent message to corporate wrongdoers. It also recognises and rewards what Airbus has now done to address the problem by discounting that financial penalty by 50 percent. The DPA has, in addition, given Airbus the opportunity to demonstrate its corporate rehabilitation and commitment to effective compliance over the period of the DPA, without facing the potential consequences of a criminal conviction. This ensures a major UK employer continues to operate according to high ethical and compliance standards. By entering into the DPA, the SFO avoids the significant expenditure in time and money inherent in any prosecution of Airbus, and it can use its limited resources in other important work. The DPA is likely to provide an incentive for the exposure and self-reporting of organisations in similar situations to Airbus. As the SFO submits, this is of vital importance in the context of complex corporate crime.
Order and publication
- The SFO has confirmed that the evidential stage set out at section 1.2 (i)(b) of the DPA Code is satisfied in respect of all counts.
- Pursuant to para 8(1) of Schedule 17 to the 2013 Act, I declare that the DPA is in the interests of justice and that its terms are fair, reasonable and proportionate. I consent to the preferring of a bill of indictment charging Airbus with 5 counts under section 7 of the Bribery Act 2010. I note that, pursuant to para. 2(2) of Schedule 17 to the 2013 Act, these proceedings are automatically suspended. The terms of the DPA now fall to be enforced in default of which an application can be made under para. 9(1) of Schedule 17 to the 2013 Act.
- I thank counsel for their assistance in this case. The various documents they have provided have been of considerable assistance in my resolution of this application. The DPA, the Statement of Facts and this judgment containing the reasons for the declarations made in this case should now be made public.
- Accusations of corruption was a rallying call over the past four years of Ghana being ruled by the NDC under President John Dramani Mahama. The word corruption was never far from the lips of the opposition NPP or their supporters.
- But what was Mahama and his NDC accused of doing, covering up, or not properly addressing?
- Here are seven of the bigger scandals that happened (or continued) under President Mahama’s watch.
- Sole-sourcing and inflating contracts
- There have been a number of accusations of corruption under Mahama’s NDC leadership relating to Government contracts awarded to President Mahama’s brother Ibrihim Mahama, as well as over-inflating costs on contracts. NPP have alleged the pair were connected to the almost $600 million dollar Ameri Power deal.
- Two Norwegian investigative journalists alleged a fraudulent deal on 10 power turbines from Ameri Group of Dubai, after the NDC Government entered into a Built, Operate, Own and Transfer agreement with Ameri Energy of Dubai for the supply of 10 turbines with 230-250MW capacity of power. There was strong accusations the project was costed at a lot more than it was worth – experts said the turbines should cost $220 million, asking where the extra $360 million was meant to go.
- “Overpricing of contracts, through the use of sole sourcing, is a corrupt procurement method of choice very typical of the Mahama-led NDC government,” the NPP said in its 2016 manifesto.
- Smartty’s Bus branding saga
- News headlines in late 2015 were dominated by the Smarttys bus branding scandal, where 116 Metro Mass Transit (MMT) buses were rebranded at a cost of GH¢3.6 million.
- The cost for rebranding these buses was seen as ludacris and the Attorney General got involved, demanding refunds be made. The outcry lead to the resignation of the Minister of Transport, Ms Dzifa Attivor, in December.
- GYEEDA Scandal
- Also under the NDC was the 2013 GYEEDA scandal, uncovered by Joy FM’s Manasseh Azure Awuni, whose investigation led to policy change in the running of the agency. The reporter found millions of cedis were paid illegally to contractors of the Ghana Youth Employment and Entrepreneurial Agency (GYEEDA).
- When President Mahama was made aware of the corruption he instructed the Attorney-General and Minister of Justice to retrieve the money illegally paid to individuals and companies through contracts with GYEEDA, the Savanna Accelerated Development Agency (SADA) and the Ghana Revenue Authority (GRA).
- He had also asked the Minister for Youth and Sports to suspend, with immediate effect, all payments under all GYEEDA contracts, except the payment of arrears to workers up to the end of the year.
- The government set up a five-member committee to probe the allegations further. The committee’s report largely corroborated Manasseh’s findings and made various recommendations to government. As part of the reforms, parliament passed a law to regulate the operations of GYEEDA, which was later renamed Youth Employment Agency (YEA).
- SADA Scandal
- The same reporter who found mass corruption in GYEEDA also looked into Ghana’s Savannah Accelerated Development Authority (SADA) – finding it had misappropriated millions of dollars allocated to it.
- The investigations showed that SADA paid GH₵32,498,000 to ACICL to plant five million trees in the savannah zone, but could only account for about 700,000 trees.
- It also found that SADA spent GH¢15 million on guinea fowls, but could only account for a few of the birds.
- Ford Saga
- President Mahama caused outrage across Ghana when it was revealed he accepted a gift of a Ford vehicle from a construction firm bidding for a lucrative government contract. The contractor in Burkina Faso, who had previously built a wall on Ghanaian Embassy land in Ouagadougou, gifted the Ford in 2012. However, this scandal came out in 2016.
- NPP said the gift was a bribe to get a road-building contract in Ghana’s Volta region that the same contractor later secured.
- Mahama himself called the accusations “baseless”. The vehicle was a gift and had been added to the government car pool.
- Mahama was cleared of the corruption allegations by the Commission on Human Rights and Administrative Justice (CHRAJ) which said in a 78-page report that a claim of conflict of interest against Mahama “has not been substantiated”. However it did find Mahama guilty of breaching government rules on the acceptance of gifts.
- Judges Scandal
- 2015 was defined by investigative journalist Anas Aremeyaw Anas’ allegations into widespread corruption in the judiciary. His undercover reporting in the film Ghana in the eyes of God; Epic of Injustice. His findings were global – shaking Ghana’s reputation.
- Anas collected evidence of a range of Ghana judges allegedly taking bribes and demanding sexual favours in return for throwing cases.
- Some 22 lower court judges and 12 High Court judges were captured on video in a two-year investigative piece Anas, allegedly taking bribes to influence justice.
- So far, 20 of the lower court judges have been removed from office and three high court judges.
- Alfred Agbesi Woyome
- A name dominating the headlines in Ghana the past few years is Alfred Agbesi Woyome, accused of swindling the taxpayers of Ghana of millions. As explained by Ghanaian journalist, Manasseh Azure Awuni, the Government of the National Democratic Congress (NDC) under President John Evans Atta-Mills, fraudulently paid a financier of the party GHc 51.2 million cedis between 2010 and 2011. A Supreme Court Judge, Justice Jones Dotse said it appeared those who facilitated the payment “entered into an alliance to create, loot and share the resources of this country as if a brigade had been set up for such an enterprise”.
- Martin Amidu, former Minister of Justice and Attorney-General has taken on the case determined to retrieve the money fraudulently paid to Woyome. In July 2014 the Supreme Court ordered Woyome to pay the money back to the state, but the businessman did not do that.The state pursued the criminal aspect of the case but lost. It appealed and lost again. Government officials argued that Woyome received the money legitimately.
- The Attorney-General has also filed to discontinue the case, meaning she was no longer interested in examining Woyome in court. This month, the Supreme Court adjourned the case indefinitely.
- Perhaps not surprisingly, the Global Corruption Barometer report on Ghana by the Transparency International (TI), 2015 showed that statistics indicate that more than 50% of the respondents perceived that corruption has increased and significant 35% think it is extreme.
- Among the different institutions, respondents perceived the following institutions as extremely corrupt; Police (92%), Judiciary (71%), political parties (76%) and public officials and civil service (59%).
- TI also found that 57% of the respondents also indicated that they or a member of their household have paid a bribe to one of these public institutions.
- This same man, is still busy deceiving Ghanaians and asking them to trust him, give him another chance to destroy the country more than he have already done.
- A-times i ask myself what is this man thinking after plundering his country economy for eight good years, he still believe his country citizens will still be foolish to entrust his country economy in his hands.
- 2.Atiku Abubakar-( Former vice president/ presidential candidate Nigeria)
- Former vice president Atiku Abubakar has for a long time been challenging Nigerians who accused him of being corrupt to come forward and prove it. So far nobody has come forward.
- Well, xpooze.com has received a report on how Atiku was the subject of a probe ten years ago, by a United States Senate Permanent Subcommittee on Investigations, chaired by Senator Carl Levin.The report detailed how Atiku Abubakar,while still the vice president of Nigeria between 2000 and 2008, used offshore companies to siphon millions of dollars to his fourth wife in the United States, Jennifer Douglas.Specifically, the report said Jennifer Douglas, an American citizen, helped her husband bring over $40 million in suspect funds into the United States through wire transfers sent by offshore corporations to U.S. bank accounts.
- In 2004, the then President Bush barred Atiku and other corrupt politically exposed persons from being issued visa to the United States.
- The US Senate probe was motivated by US government concern about corruption in the Third World and its corrosive effects on the development of honest government, democratic principles, and the rule of law.
- “It is also blamed for distorting markets, deterring investment, deepening poverty, undermining international aid efforts, and fostering crime. Some have drawn connections between corruption, failed states, and terrorism. Corruption also continues to be a massive problem. The World Bank has estimated that $1 trillion in bribes alone exchange hands worldwide each year,” the committee noted in its bulky report.
- Atiku was not the only foreign Politically Exposed Person(PEP) probed by the committee. He had company in Teodoro Nguema Obiang Mangue, now the 48-year-old son of Teodoro Nguema Obiang Mbasogo, the President of Equatorial Guinea (EG), late President of Gabon, Omar Bongo and three Angolan PEP accounts, involving an Angolan arms dealer, an Angolan government official, and a small Angolan private bank.
- The committee submitted its report on 4 February 2010, three years after Atiku left office.
- The report unveiled violations of US laws by Atiku and his fourth wife, Jennifer Douglas. It also included revelations about Siemens bribe paid into one of the accounts, and it possibly provided the basis for Atiku being barred from entering
- the United States, since then.
- This Report examines how politically powerful foreign officials, their relatives, and close associates – referred to in international agreements as Politically Exposed Persons (PEPs) – have used the services of U.S. professionals and financial institutions to bring large amounts of suspect funds into the United States to advance their interests. Using four case histories, this Report shows how some PEPs have used U.S. lawyers, real estate and escrow agents, lobbyists, bankers, and even university officials, to circumvent U.S. anti-money laundering and anti- corruption safeguards. This Report also offers recommendations to stop the abuses.Here is a summary of the report:
- Atiku Case History.
- From 2000 to 2008, Jennifer Douglas, a U.S. citizen and the fourth wife of Atiku Abubakar, former Vice President and former candidate for President of Nigeria, helped her husband bring over $40 million in suspect funds into the United States through wire transfers sent by offshore corporations to U.S. bank accounts.
- n a 2008 civil complaint, the U.S. Securities and Exchange Commission alleged that Ms. Douglas received over $2 million in bribe payments in 2001 and 2002, from Siemens AG, a major German corporation.
- While Ms. Douglas denies wrongdoing, Siemens has already pleaded guilty to U.S. criminal charges and settled civil charges related to bribery and told the Subcommittee that it sent the payments to one of her U.S. accounts.
- In 2007, Mr. Atiku was the subject of corruption allegations in Nigeria related to the Petroleum Technology Development Fund.
- Of the $40 million in suspect funds, $25 million was wire transferred by offshore corporations into more than 30 U.S. bank accounts opened by Ms. Douglas, primarily by Guernsey Trust Company Nigeria Ltd., LetsGo Ltd. Inc., and Sima Holding Ltd.
- The U.S. banks maintaining those accounts were, at times, unaware of her PEP status, and they allowed multiple, large offshore wire transfers into her accounts. As each bank began to question the offshore wire transfers, Ms. Douglas indicated that all of the funds came from her husband and professed little familiarity with the offshore corporations actually sending her money.
- When one bank closed her account due to the offshore wire transfers, her lawyer helped convince other banks to provide a new account. In addition, two of the offshore corporations wire transferred about $14 million over five years to American University in Washington, D.C., to pay for consulting services related to the development of a Nigerian university founded by Mr. Atiku Abubakar.
- American University accepted the wire transfers without asking about the identity of the offshore corporations or the source of their funds, because under current law, the University had no legal obligation to inquire.
- Executive Summary
- Combating corruption is a key U.S. value and goal, due to its corrosive effects on the rule of law, economic development, and democratic principles. In 2001, the Patriot Act made the acceptance of foreign corruption proceeds a U.S. money laundering offense for the first time, and required banks to apply enhanced scrutiny to private banking accounts opened for senior foreign political figures, their relatives, and close associates. In 2003, the United States supported the United Nations Convention Against Corruption, now ratified by over 140 countries. Also in 2003, U.S. Immigration and Customs Enforcement (ICE) formed an investigative group dedicated to combating foreign corruption by PEPs. In 2004, President Bush issued Presidential Proclamation 7750 denying U.S. visas to foreign officials involved with corruption, and Congress later enacted supporting legislation. A 2009 study sponsored by the World Bank analyzed PEP controls worldwide and recommended stronger measures to reduce corruption.
- The Permanent Subcommittee on Investigations (Subcommittee) initiated this investigation to learn how U.S. laws apply to PEPs utilizing the domestic financial system, and examine how foreign senior political figures, their relatives, and close associates may be circumventing or undermining anti-money laundering (AML) and PEP controls to bring funds that may be the product of foreign corruption into the United States. It is the latest in a series of Subcommittee hearings examining foreign corruption and its U.S. aiders and abettors.
- During the course of its investigation, the Subcommittee staff conducted over 100 interviews, including interviews of lawyers, real estate agents, escrow agents, lobbyists, bankers, university professionals, and government officials. The Subcommittee issued over 50 subpoenas and reviewed millions of pages of documents, including bank records, correspondence, contracts, emails, property records, flight records, news articles, and court pleadings. In addition, the Subcommittee consulted with foreign officials, international organizations, financial regulators, and experts in anti-money laundering and anti-corruption efforts.
- Nigerian senators have accused the country’s vice-president, Atiku Abubakar, of diverting more than $100m (£51m) in public funds to private interests.
- A Senate inquiry recommended that Mr Abubakar should be prosecuted for siphoning off money to companies he was connected to.
- The Senate launched the investigation last year after the president, Olusegun Obasanjo, forwarded charges made by Nigeria’s anti-corruptions body against Mr Abubakar – a one-time political ally.
- In a report presented to the full Senate yesterday, the investigating panel said it agreed with the findings that Mr Abubakar helped divert $145m from Nigeria government accounts to banks.
- Some of the money was then “fraudulently converted as loans” for three companies connected to the vice-president.
- The report called for Mr Abubakar’s prosecution, from which he is protected while in office. However, a Senate impeachment would strip him of his protection and disqualify him from April’s presidential elections. He could also then face criminal charges.
- Mr Abubakar’s campaign strongly rejected the findings, saying “the legislative body should not allow its name to be dragged into the mud by a few members who may be pursuing their own hidden agenda”.
- It said in a statement that his actions were proper, with the money originating in a fund specifically designed for investments in the private sector.
- The campaign said a senior government accountant had ruled that the banks were investment grade and that Mr Abubakar had delivered double-digit returns on the government’s money.
- “We therefore call on the entire Senate to look at the report of the committee objectively and reject it if found to be shoddy, as a way of redeeming the image of the upper legislative chamber,” it said.
- The Senate president, Ken Nnamani, said the report would be debated by politicians later today.
- Mr Abubakar fell out with Mr Obasanjo last year after helping stop an attempt by the president’s supporters to amend Nigeria’s constitution and allow him another term.
- In the past, Mr Abubakar has dismissed the allegations as part of a plot to keep him from running for Nigeria’s top post. His office could not immediately be reached for comment.
- The Senate upheld the anti-corruption group’s findings that $6m of the diverted funds allegedly went to iGate, a Kentucky-based communications firm that tried to do business in Nigeria in 2004.
- William Jefferson, a Louisiana Democrat, has been under investigation in the US since March 2005 for allegedly using his position to help iGate – which sought contracts with Nigeria and other African nations – and taking bribes in return. The FBI said it found $90,000 stashed in a freezer in his home.
- Oil-rich Nigeria is regularly ranked among the most corrupt countries in the world by the Berlin-based corruption watchdog Transparency International.
- April elections, which would allow for Nigeria’s first-ever transfer of power from one elected leader to another, are meant to cement civilian rule in the country, which has been vulnerable to coups.
- This same man was looking for how to mislead the nation into believing, he is the messiah Nigerians have been looking for, after turning most of his country properties into his personal properties.
- 3.Jacob Zuma ( former Vice President/President South Africa)
- The former South African president Jacob Zuma will stand trial on corruption charges relating to a $2.5bn (£1.98bn) arms deal after a high court denied him a permanent stay of prosecution.
- Zuma, who held office from 2009 to 2018, had applied for 16 charges of fraud, racketeering and money laundering to be effectively struck out.
- The charges relate to a deal to buy 30bn rand of European military hardware for South Africa’s armed forces in the late 1990s.
- The 77-year-old politician was ousted last year after almost a decade in power, following a bitter internal battle within the ruling African National Congress party.
- His successor, Cyril Ramaphosa, has pledged repeatedly to crack down on corruption in South Africa, which faces massive economic and social challenges.
- The charges against Zuma were originally filed a decade ago but then set aside by the National Prosecuting Authority shortly before he successfully ran for president in 2009.
- After his election, his opponents fought a lengthy legal battle to have the charges reinstated, finally succeeding in 2016. Zuma countered with his own legal challenge.
- In July, Zuma faced questioning by Raymond Zondo, a senior judge, mandated to investigate separate allegations of “state capture” in South Africa during his presidency.
- ‘State capture’: the corruption investigation that has shaken South Africa
- In a public hearing, Zuma denied he had presided over an immense system of corruption and patronage that drained billions from the country’s exchequer, and told the inquiry he was the victim of a plot by foreign intelligence agencies to seek his downfall.
- The former president later ended his testimony, claiming he was being questioned unfairly.
- The judicial inquiry was set up after an ombudsman’s report uncovered apparent evidence of improper contact between three wealthy businessmen brothers – Atul, Ajay and Rajesh Gupta – and senior officials in Zuma’s administration.
- The report, which stopped short of asserting criminal behaviour, called for an investigation into whether Zuma, some of his cabinet members and some state companies had acted improperly.
- The US Treasury announced on Thursday it was placing the Guptas under wide-ranging sanctions for their role in “a significant corruption network in South Africa that leveraged overpayments on government contracts, bribery and other corrupt acts to fund political contributions and influence government actions”.
- In a statement, the treasury alleged that the brothers were able to expand their businesses after immigrating to South Africa in the early 1990s “due in large part to their generous donations to a political party and their reportedly close relationship with former South African president Jacob Zuma”.
- “The family has been implicated in several corrupt schemes in South Africa, allegedly stealing hundreds of millions of dollars through illegal deals with the South African government, obfuscated by a shadowy network of shell companies and associates linked to the family,” the statement said.
- Zuma has said the three Gupta brothers are his friends but he denies any influence-peddling in their relationship.
- The Gupta family denied the accusations and left South Africa around the time that Zuma was ousted. They are now believed to be based in Dubai.
- A judge in South Africa issued an arrest warrant on Tuesday for Jacob Zuma, the former president, for failing to appear in court on a corruption case that he has sought to avoid for months, most recently by asserting that he is ill.
- The warrant, requested by the National Prosecuting Authority, does not come into effect until the case resumes on May 6, the South African Broadcasting Corporation reported.
- Mr. Zuma is said to be in Cuba seeking medical treatment, according to the state broadcaster, but the prosecutor requested his health records be shown as evidence of his claim that he is sick.
- One of the prosecutors, Billy Downer, told the Pietermaritzburg High Court that Mr. Zuma’s legal team had said that the former president would be out of the country for treatment until mid-March, local news media reported. According to Mr. Zuma’s team, he had two operations in early January before going abroad. But the judge questioned a letter from a military hospital in the administrative capital, Pretoria, explaining Mr. Zuma’s absence, noting that it had no date.
- A lawyer for Mr. Zuma, Daniel Mantsha, told the state broadcaster that his side was not happy with the arrest warrant.
- “That is sending a wrong message that our courts have no sympathy, no compassion, and that is not something that should be celebrated,” he said.
- Mr. Zuma’s medical team will determine his fitness to appear before the court in May, Mr. Mantsha added.
- It was not clear when the former president would return from Cuba. According to the Justice Department of South Africa, the two countries have negotiated but not signed an extradition agreement.
- Mr. Zuma, 77, whose past court appearances have been marked by defiant speeches and singing and dancing by crowds of supporters, has faded into the background as his legal challenges to the corruption charges have faltered.
- Late last year, a court dismissed Mr. Zuma’s attempt to appeal a ruling that cleared the way for him to be prosecuted. He is accused of receiving bribes from the French arms manufacturer Thales through his former financial adviser Schabir Shaik, who was convicted of fraud and corruption in 2005.
- Mr. Zuma denies charges of corruption, money laundering and racketeering related to a 1999 arms deal when he was deputy president. He has said that his case has been prejudiced by lengthy delays in bringing the matter to trial. He has also made claims of political interference.
- The charges against Mr. Zuma were initially thrown out by prosecutors nearly a decade ago in a contentious decision that opened the way for him to become president. Prosecutors returned to the case after his rocky presidency ended.
- Mr. Zuma, who took office in 2009, resigned in 2018 under pressure from his African National Congress party after widespread public outcry over separate allegations of mismanagement and corruption that impacted state-owned companies.
- The corruption is estimated to have cost South Africa billions of dollars.
- South Africa and its economy, the most developed in sub-Saharan Africa, have struggled to recover under Mr. Zuma’s successor, President Cyril Ramaphosa, who has apologized for the past mismanagement and vowed overhauls that some critics have said are long in coming.
- The scandals fueled outrage and have also badly hurt the reputation of the A.N.C., which has ruled South Africa since the harsh system of white minority rule known as apartheid ended in 1994.
This same man was the sponsor of xenophobic attack against other African countries citizens who were residents in his country.
4. Goodluck Ebele Jonathan-(Former Vice President/president of Nigeria )
Accusations and counter-accusations about alleged grand corruption in the Goodluck Jonathan administration continued on Sunday with Vice President Yemi Osinbajo reeling out details of the allegations he called “a tip of the iceberg.”
The details were published Sunday night by the vice president’s office in a reaction to the accusations by supporters of former President Goodluck Jonathan, who reportedly claimed Mr Osinbajo made unsubstantiated allegations about grand corruption during the Jonathan era.
The statement sent to PREMIUM TIMES by the vice president’s spokesperson, Laolu Akande, said the vice president did not at anytime accuse former President Jonathan in person.
Mr Akande said the vice president has always said the blatant corruption cases were committed during Mr Jonathan’s presidency.
“We have read reports attributed to “a media office of former President Goodluck Jonathan”. It is clear from the foul language of the authors that the statement could not have come from the former President, but from the motley group of loud and rude characters whose brief seems to be to deny all and anything said against the former PDP government and to do so in the crassest possible language.
“The alleged spokespersons of the former President say that facts long in the public domain, some even being used to prosecute several corruption cases, are lies and that those of us in government restating these well known facts are liars.
“They accuse Vice President Yemi Osinbajo, SAN, of lying against the former president or his government, citing their involvement in the stealing of three billion dollars, while speaking recently at The Platform event on the 1st of May.
“Just for clarity, I quote the Vice President “Grand corruption remains the most enduring threat to our economy. Three Billion US dollars was stolen in what was called the strategic alliance contacts in 2013, three Nigerians were responsible, today three billion dollars is one trillion Naira and our budget is 7trillion! ….”
While Mr Akande said no mention was made by his boss of the former president in his statement, he said the story by Mr Jonathan’s media office was false as the allegation about the loss of over $3 billion through the strategic alliance contacts has been subject of criminal investigation and trials in Nigeria and the UK since 2013.
In clarifying that allegations of corruption against the Peoples Democratic Party (PDP) government, Mr Akande said the $3 billion was stolen under the Nigeria National Petroleum Corporation (NNPC) Strategic Alliance Contracts.
He named three persons reportedly involved in the controversial contract to include Jide Omokore, Kola Aluko and the former Petroleum Resources Minister, Diezani Alison- Maduekwe.
The statement said companies belonging to both Messrs Omokore and Aluko lifted Nigerian crude oil, but failed to remit the proceeds into the coffers of the government.
“The total sums converted is in excess of three billion dollars, including royalties, taxes and fees unpaid for the asset from which the crude was taken. The case is the subject of a trial in Nigeria, and criminal investigation in the US and UK, and the assets of all three individuals have been forfeited in Nigeria, the US and the UK,” the statement said.
“The criminal diversion and theft of sums in excess of $2.5 billion meant for purchase of arms to prosecute the war against Boko Haram: The first phase of the investigations revealed several sordid details, many of the assets of culprits have been seized from them and they are facing trial.
“The release of the sum of $289m in cash on February 25, 2015: Documents including cash vouchers indicate that the sum of $289,202,382 was taken from the Joint Venture (JV) Cash Call Account No. 000-0000-11658-366 of the NNPC/NAPIMS with JP Morgan Chase Bank, New York, USA.
“N70 billion was released in parts from the national treasury between January 8 and February 25, 2015.
“In another illegal disbursement, 25th August 2014, N60B in cash in tranches of N40billion and N20billion: The sum was not tied to any project or procurement and was then shared between two security agencies under the supervision of the then NSA.
“Most of these sums ended up in the hands of senior PDP members some of whom have returned parts of the loot. Some are standing trial for these offenses. These facts are in the public domain.
“There was yet another set of illegal fund withdrawals under one week between January 8and 16, 2015, where the sum of N1.5 billion was released in three tranches of N300m, N400m and N800m respectively. This money was released from the MEA Research Library Account
“Another document showed that N10 billion was released to the Office of the National Security Adviser by the Central Bank of Nigeria (CBN) on September 15, 2014.
“The money was released in tranches of foreign exchange of $47 million, $5 million, 4 million Euros and 1.6 million Euros.
“A letter from the Office of the NSA in November 2014 further showed that the monies were released as ‘funds for special services’. This particular release of N10B was sourced in November 2014 from a N40 Billion CBN released funds meant for Corporate Social Responsibility, CSR. Investigators showed that this money was released for the PDP Presidential Primaries.”
The statement recalled that Lamido Sanusi, then CBN Governor was sacked by then President Jonathan for speaking up about the over $20billion oil money that missing.
“These cases of grand corruption and open looting of public resources pauperized Nigeria and left us with little or no savings in the years when oil was selling at 100 to 114 dollars a barrel and we were producing 2.1 million barrels a day.
“When in 2015 oil prices went even as low as between 28 and 35 dollars a barrel and oil production fell to less than one million barrels a day, we had no buffer, no savings, to tide us through,” the statement continued.
The statement said $289 million (about N88.1 billion) released from CBN in cash on a single day by the former administration was enough to fund some of the projects being handled by the present administration, including 244,000 N-Power graduates for a year, or pay for 1.2 billion school meals or complete half of Lagos -Ibadan or half of Abuja -Kaduna-Kano roads.
The vice president also made the point that in 2014 with oil prices as high as $120 per barrel, the total capital released for Power, Works, Housing, Defence, Transport, Agriculture and Defence were just N152Billion for the whole year.
By contrast, the statement said with oil prices as low as $28 per barrel the Buhari administration committed N578billion to the same Ministries in 2016 as part of the strategy to end the recession.
Regardless, legal counsel to Mr Omokore and Atlantic Energy Drilling Concept Limited, Rafiu Lawal-Rabana denied any involvement of his clients in the contract scam.
Mr Lawal-Rabana said Mr Omokore was not in concert with anybody to steal $3 billion as contained in the statement.
“The relationship between Jide Omokore’s company – Atlantic Energy with NNPC/NPDC is well documented as a commercial transaction of which there has been part performance. There is nothing illegal or fraudulent about the transaction,” he said.
He said the matter was already before the court in a criminal proceeding yet to be concluded for which no pronouncement of guilt or corruption has been made against his client.
In his reaction, a former aide to Mr Jonathan, Reno Omokri, questioned why Mr Osinbajo did not leave the anti-graft agencies to do their work.
“Is Vice President Osinbajo so jobless that he has reduced himself and his office to being the spokesperson of the Economic and Financial Crimes Commission and the Independent Corrupt Practices and Other Related Offenses Commission?” he said.
Mr Omokri said he wondered how an administration with several illegalities can accuse another administration of graft.
“It is funny that an administration that illegally withdrew $496 million from the Excess Crude Account without due process, allegedly to pay for 12 Super Tocano jets is accusing the Jonathan administration of illegal withdrawals,” he said.
Patience Jonathan, the colorful wife of Nigeria’s ex-president, Goodluck Jonathan, has become the latest high profile Nigerian embroiled in a corruption-related scandal. Nigeria’s anti-graft agency, the Economic and Financial Crimes Commission (EFCC), has frozen accounts containing $31.4 million controlled by the former first lady who claims some of the money was for payment of medical bills.
In a bid to regain control of the accounts, Mrs Jonathan is suing the EFCC, describing the blockage of access to the accounts as efforts to “indirectly harass or harangue” her. Patience Jonathan’s corruption scandal is the latest in a string of cases the EFCC has been involved in since president Buhari took office last year.
Buhari has made good on his campaign promise to launch probes into government agencies and institutions. Six months after taking office, Buhari’s administration arrested Sambo Dasuki, the former national security adviser for financial misappropriation of about $2 billion earmarked for military equipment amid the Boko Haram insurgency. Military chiefs have also been questioned and, in some cases, detained over similar charges.
But while the EFCC has been busy under the Buhari administration, it has little to show for its efforts so far. Despite instituting multiple cases of theft of state funds against several high profile Nigerians, the agency has not secured any convictions. Ibrahim Magu, head of EFCC, has blamed the lack of progress on lawyers who help money launderers ”to escape justice.”
The agency’s inability to secure convictions has undercut the potency of Buhari’s anti-corruption campaign which has been dismissed by Nigeria’s main opposition party as being “investigated on the pages of the newspapers.” Given the prevalence of partisan politics in Nigeria, the presidency has also been forced to deny claims that its anti-corruption fight simply targets opposition party members.
While Buhari’s reputation as a leader with integrity probably remains intact for now, Nigerians’ early hopes that he would be able to rapidly stamp out corruption and round up former perpetuators is beginning to fade.
This same man, have several properties in his country and in other country, with a big estate to his name where he uses as his country home and a state of the heart hotel to his wife name.
5. William Ruto-(Vice President/aspiring presidential candidate Kenya)
William Ruto always tells his story about how he came from rags to riches. He describes himself as a self-made businessperson. He gained popularity by playing the card of his humble and religious background.
His indictment at the International Criminal Court for crimes against humanity made him even more popular.
Ruto became Uhuru Kenyatta’s running mate prior to the 2013 general elections. He went on to become the deputy president after the controversial Supreme Court ruling in the 2013 presidential elections. He also has presidential aspirations in 2022.
William Ruto is not new to politics. He is one of the founding members of the defunct Youth for KANU (YK’92) and perhaps the most prominent of all. He won his first parliamentary seat for Eldoret North in 1997 and rose through the ranks to the position of deputy president.
William Ruto Has Many Scandals
Yet, in his desire to be president, he has a trail of ghosts and skeletons in his closet. These ghosts and skeletons make him unfit to serve as the president. His name appears in many scandals over the years. People also widely claim that he is corrupt and that he earned his wealth through dubious means.
Perhaps the most prominent skeleton in his closet is the ICC case. The ICC refused to acquit him of any wrongdoing and termed the cases a ‘mistrial’. This was due to extensive witness interference and lack of state compliance with the court.
THE MAIZE SCANDAL IN THE GRAND COALITION GOVERNMENT
The scandal broke out in 2009. At the time, William Ruto was the Minister for Agriculture in the Grand Coalition government.
PricewaterhouseCoopers carried out an audit which showed that Ruto used his personal assistant to write a letter asking that National Cereals and Produce Board allocates an individual 1,000 bags,
Ruto survived an impeachment motion after the Speaker rejected documents presented before parliament linking him to the maize scandal. Ruto blamed his political opponents for linking him to the scandal.
The scandal has made Ruto its constant face in political satire, such as in the XYZee show.
In an interesting twist, WikiLeaks claims that former Prime Minister Raila Odinga was the mastermind of the scandal. It says he attempted to suspend William Ruto as Agriculture Minister to divert attention from his family’s involvement in the KES 2 billion maize fraud.
HUSTLER’ JET SCANDAL
This scandal took place in May 2013, a month after the Jubilee Government took power.
Deputy President William Ruto allegedly hired a private jet for KES 100 million for his ‘shuttled diplomacy’ in West Africa. The trip was to lobby West African countries to support their cause at the International Criminal Court.
The trip cost taxpayers Sh21 million for transport and accommodation. This amount excludes allowances paid to the 14 people who accompanied William Ruto.
The Parliamentary Accounts Committee (PAC) investigated the scandal. It said Jubilee Government officials breached procurement regulations and procedures in the process of hiring the aircraft.
In its report, PAC also criticized the President for giving verbal rather than written directives to his deputy.
The President instructed the Deputy President to undertake the tour verbally, contrary to Article 135 of the Constitution, which requires the President to convey his decision on the performance of his functions in writing. (PAC report)
However, PAC absolved Ruto of any wrongdoing. It recommended several officials in his office to face prosecution. However, parliament later threw out this report and no one took responsibility.
LANG’ATA PRIMARY SCHOOL LAND GRAB
William Ruto’s name featured prominently in the scandal. Some ‘faceless’ developers tried to grab the Lang’ata Primary School playground in 2015. He initially denied owning the Weston Hotel, which attempted to convert the playground to a parking lot.
In response to the attempt, irate pupils led by a group of activists demonstrated against the land grab. They attempted to bring down a perimeter wall built around the playground.
The children carried placards proclaiming ‘Land grabbing is terror against children’
The police responded ruthlessly and tear-gassed innocent schoolchildren. The aftermath was public outcry locally and around the world on how the police handled the protest.
Kibra MP Ken Okoth said people took at least 10 children to the hospital with injuries. The injuries included tear gas exposure to their eyes.
THE KENYA PIPELINE LAND SCAM
William Ruto and four other persons faced fraud charges in court. The charges involved the alleged sale of a piece of land in Ngong forest to Kenya Pipeline Company Ltd for Sh272 million. The accusers argued that Ruto and his cohorts acquired and sold the land illegally.
Back then, I was a member of the backbench in Parliament when we raised issues of integrity against Ruto, as he was facing a fraud case regarding Ngong Forest land. He had taken cash from Kenya Pipeline in exchange for that land (sic).
As a minister, Ruto allegedly received KES 96 million at various intervals during the alleged transaction. The charges led to Kibaki and Raila to suspend him from the cabinet in 2011. However, the court later acquitted him and his cohorts after a key witness failed to testify.
MOI TEACHING AND REFERRAL HOSPITAL (MTRH) SCANDAL
A Nairobi businessperson linked Ruto to a controversial KES 28 billion deal. The businessperson, Hebert Ojwang’, said the deal was to put up a new referral hospital in Eldoret. The businessperson claimed that he came up with an idea to upgrade the Moi Teaching and Referral Hospital. However, he alleged that Ruto gave instructions to build a new hospital at a new site instead.
Hebert Ojwang’ appeared before the Public Investments Committee (PIC) to provide information on the scandal. He said Ruto was behind the push to abandon the refurbishment of the facility for a completely new hospital. The new hospital would cost an additional KES 11 billion from the initial cost of refurbishing MTRH at KES 17 billion. Ojwang said the deal would fleece the taxpayer.
How the management came up with KES 28 billion to relocate the facility remains a mystery. It is clear the additional KES 11 billion is purposely done to end up in the pockets of a few individuals (sic).
Ojwang produced an audio tape of a meeting held allegedly at Ruto’s Karen home. The audio file alleged that Ruto gave instructions that the project speeds up for completion by the end of that financial year.
PIC directed the Auditor General to conduct a forensic audit on all the transactions surrounding the scandal. William Ruto, in his defence, said that he stopped the deal because those involved did not follow the laid down procedures.
The DP was charged for defrauding the KenyaPipeline Company through the sale of Ngong Forest land then valued at Sh272 million.
But he was acquitted in the case he faced alongside former aide to former President Daniel arap Moi, Joshua Kulei, and former Lands boss Sammy Mwaita. The two were also acquited.
This week, detectives at the Directorate of Criminal Investigations (DCI) re-opened the investigations, by summoning directors of four firms that were linked to the transaction, with the aim of establishing ownership and the entire transaction trail.
Lawyer Katwa Kigen has confirmed that he appeared before the detectives at DCI Headquarters on behalf of the firms. “They asked for documents on the sale transaction and were also interested to know the names of the directors,” he said.
When Ruto, at the time serving as Education Minister, and the two others were charged, the prosecution was hard-pressed to prove that they indeed received money from the land transaction, in what led to their acquittal because no evidence was tabled.
They were subsequently acquited by Gilbert Mutembei, a Magistrate who heard and determined their case at the time.
The re-opening of the case comes at a time Ruto is facing turbulent political times, sitting on the opposite side of the brigade pushing or supporting the BBI led by his boss President Uhuru Kenyatta and ODM leader Raila Odinga, who made peace with the president in March 2018 when they shook hands at Harambee House, the seat of power at the heart of the capital Nairobi.
From his public statements, Ruto believes that BBI is all about crafting power positions for “a few individuals” understood to mean Odinga who is seen as his main competitor in the 2022 Presidential election.
He has emerged as a harsh critic of the initiative, even criticising the countrywide mobilisation campaigns, which, he said are a “waste of public funds because no one is opposed to the BBI.”
But after feeling left out, his allies led by Senate Majority Leader Kipchumba Murkomen have said they will attend the next BBI rally in Mombasa, after missing out in Kisii and Kakamega. Ruto is yet to confirm if he will too attend, having taken part in its launch at the Bomas of Kenya in November where the report was unveiled.
Ruto and his allies have lately emerged as being more in the ‘opposition’, often critising government policy, including investigations or prosecutions of state officials linked to corruption–like Henry Rotich, who was charged with corruption over Kimwarer and Arror dams, in Elgeyo Marakwet, which the Deputy President insists no money was lost.
The investigation was authorised by the Head of State, who has gone public on many forums, directing the Ethics and Anti Corruption Commission and the DCI to fight corruption, and not spare anyone regardless of their status in office.
But Ruto and leaders loyal to him, like Senate Majority Leader Kipchumba Murkomen, have often gone the opposite way, accusing DCI Director George Kinoti of prosecuting his cases in the media, without evidence.
The allegations about the 366 million euro (KSh40 billion) scam that have deepened the rift between Ruto and President Uhuru Kenyatta, who is due to after two terms in office.William Ruto was set to become the ruling Jubilee party’s standard bearer when the country holds the next general elections in 2022.
Kenya’s respected Daily Nation reports that CCTV footage taken from the Deputy President’s office on Friday positively identified two of his aides as having been present on 13 February when former Sports cabinet secretary Rashid Echesa met with officials from Echo Advanced Technologies, an American Company allegedly linked to the scam.
Echesa is said to have used Ruto’s office to swindle (100 million Euros (Sh11 million) from directors of the firm, allegedly as brokerage fees to help them win the lucrative tender.
The newspaper also quotes prosecutors in charge of the investigation as saying that William Ruto seemed to agree that a statement posted on his twitter handle that a meeting took place in his office.
This is despite the fact that procurements are not part of his portfolio.
The presence in Ruto’s office of the controversial Echesa is no surprise to Kenyans, the Standard notes in a lead article.
After the sack, Echesa did not stop making headlines with his push for Deputy President William Ruto’s 2022 presidential bid, recalls the publication.
The newspaper also quotes prosecutors in charge of the investigation as saying that William Ruto seemed to agree that a statement posted on his twitter handle that a meeting took place in his office.
In the very latest development, Rashid Echesa appeared before a magistrate’s court in Nairobi, this Monday.
The former Sports Cabinet Secretary and three others have reportedly been charged with conspiring to commit a felony, making a document without authority, obtaining money by false pretense, attempt to commit a felony and uttering a false document, according Kenyan media outlets.
The Deputy President has denounced the alleged procurements scam as a smear campaign by his political rivals.
He actually acknowledged that while a meeting was held in his office, he wasn’t there”, says Patrick Gathara, a respected Kenyan blogger and political commentator based in Nairobi.
On the question about whether Ruto was aware of the meeting, Gathara says he probably was, adding that he must “bear responsibility for whatever goes on in his office”.
“Carry your cross”
Meanwhile, the clamour for Ruto’s removal from office has been gaining ground within the ruling Jubilee coalition.
Outspoken Kitui governor Charity Ngilu has called on the Deputy President to step aside so as” to pave the way for proper investigations”, reports the Daily Nation.
This is while the opposition ODM director of political affairs Opiyo Wandayi invited Ruto to “carry your own cross”.
However the majority leader at Kenya’s National Assembly Aden Duale and his Senate counterpart Kipchumba Murkomen are reportedly digging in to defend Deputy President Ruto.
“[Many] fictitious deals by fraudsters used to be conducted in many offices, including that of the former Prime Minister, in the same building,” Duale is quoted as saying.
Boon for BBI
Kenyan political commentator Patrick Gathara points to the race to succeed Uhuru Kenyatta when he retires in 2022, after two terms in 2022, as one possible issue which currently poisoning Kenyan politics.
Foremost is President Uhuru Kenyatta’s Building Bridges Initiative offer to the Raila Odinga-led opposition, aimed at stemming deep ethnic divisions and electoral violence in the country.
That has not gone down well with William Ruto’s allies in the ruling Jubilee coalition.
“I think the people who are behind the “handshake” who are currently seen to be on Raila’s side are the ones mostly pushing to associate the deputy President to this deal, explains Gathara.
“You can’t exclude the possibility of a push from one side Kenya’s current political divide to hang this (graft scandal) around Ruto’s neck”, the political commentator argues.