“Pay up!” London high court tells Airbus in Mahama-supervised loot and share of aircraft bribes Featured

By Kwasi Frimpong February 03, 2020 4986 1615 comments

A division of the London high court has found Airbus guilty of paying sweeteners to officials of the Government of Ghana at a time when then Vice-President Mahama was in charge of jet purchases for the country. The aircraft “chop-chop” deal, one of the subjects of a previous inquiry ordered by President Mills, was sanctioned by Mr Mahama. It figures prominently in the single largest fine imposed by a UK court on a corporate body found guilty of paying bribes.

Ghana’s purchases of aircraft from Airbus during the erstwhile Mills and Mahama administrations are at the centre of what is said to be the biggest bribery case in a UK court.

The “chop-chop” deal was led by John Dramani Mahama, who was the Vice-President under President Mills and became President of Ghana in 2014.

The European multinational aerospace company has admitted in a London high court to paying huge bribes to enable it to secure the contract to supply the aircraft.

It has agreed to pay a record £3 billion (US$3.96bn) in penalties after admitting it had paid bribes on an “endemic” basis to win contracts in 20 countries. The settlement is far in excess of the previous UK record corporate fine for bribery: £671 million, paid by Rolls-Royce in 2017.

Dame Victoria Sharp, president of the Queen’s Bench Division of the court, approved the settlement, struck with the UK’s Serious Fraud Office (SFO).

The SFO launched its investigation in 2016 after evidence emerged of “irregularities” involving secret Airbus agents.

Pervasive corruption

In her ruling, the president of the court said: “The seriousness of the criminality in this case hardly needs to be spelled out. As is acknowledged on all sides, it was grave.” Dame Sharp added that the scale of wrongdoing showed that bribery was “endemic in two core business areas within Airbus”.

Anti-corruption investigators are said to have described the court's decision as the largest ever corporate fine for bribery in the world after judges declared the corruption “grave, pervasive and pernicious”.

The 32-page ruling states in paragraph five: “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 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 Ghana deals

Between 2011 and 2015, Ghana acquired three Airbus C295 planes to augment and modernise the fleet of the Ghana Armed Forces.

The first of the military aircraft arrived on November 17 2011; followed by a second on March 19 2012. The last order arrived on December 4 2015.

In November 2014 the then President Mahama announced that Ghana was to acquire an additional C295, as well as other aircraft, including five Super Tucanos, Mi-17s and four Z-9s.

Roughly $150 million in total was spent in acquiring the three aircraft. It was one of these planes that recently overshot the runway at the Accra air force base.

The ways and means of bribery

The fifth count of charges against Airbus, set out in paragraphs 52 to 56 of the high court ruling, alleges that, contrary to Section 7 of the UK’s Bribery Act 2010, between July 1 2011 and June 1 2015, Airbus SE failed to prevent certain people associated with the company from bribing others concerned with the purchase of military transport aircraft by the Government of Ghana.

It adds that the said bribery was intended to obtain or retain business or advantage in the conduct of business for Airbus SE.

It further says that, between 2009 and 2015, Airbus engaged a close relative of a high-ranking elected Ghanaian government official as its business partner in respect of the proposed sale of three military transport aircrafts. There are suspicions that the said elected Ghanaian official is former President Mahama, and that close relative is Samuel Mahama, who is domiciled in the UK.

According to the ruling, a number of Airbus employees knew that the business partner was a close relative of the elected Ghana government official (named “Government Official 1” for the purpose of case hearings), who was a key decision-maker in respect of the proposed sales.

It adds that a number of Airbus employees made or promised success-based commission payments of approximately €5 million to the business partner (referred to as Intermediary 5 in the court papers).

Fake documents

False documentation was said to have been created by or with the agreement of Airbus employees to support and disguise these payments. The payments were said to be intended to induce or reward “improper favour” by Government Official 1 towards Airbus.

Airbus, acting through one of its Spanish subsidiaries, conducted two campaigns to sell its C295 military transport aircraft to the Government of Ghana. The first campaign ran from 2009 to 2011 and the second from 2013 to 2015.

It said the close relative of the high-ranking elected Ghanaian official, who had no previoius expertise in the aerospace industry, acted as the business partner for Airbus in both transactions.

In August 2011 the purchase agreement for the sale of the two C295 aircraft was signed by the Spanish subsidiary and the Government of Ghana. According to the court, it contained a declaration of compliance with the 1997 Organisation for Economic Co-operation and Development (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 business partners in connection with the contract.

False representations

A number of Airbus employees (two of them senior, and one involved in compliance) were said to have agreed to circumvent the proper compliance process deliberately, by falsely representing that the work in the first campaign had been done by another intermediary, which could, in turn, make the money available to Intermediary 5 and others.

“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 C295.

“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),” the judgment says.

Botched probes

Ghana’s Special Prosecutor, Martin Amidu, who was relieved of his position as Attorney General by President John Evans Atta Mills, alleged in 2014 that the late President set up a committee of inquiry to investigate the acquisition of aircraft for the Armed Forces negotiated by the then Vice-President, John Dramani Mahama.

Mr Mahama has still not responded to Mr Amidu’s allegation of involvement in suspicious transactions.

On February 19 2009, in his State of the Nation Address to Parliament, then President Mills said his government was reviewing a decision to purchase two executive presidential jets. “Ghana simply cannot afford the expenditure at this time and we certainly do not need two presidential jets,” President Mills said.

Unknown to many Ghanaians, then Vice-President was receiving delegations and negotiating the acquisition of five jets, including an ultra-expensive hangar. However, his President appeared to be unaware of the transactions.

Apparently shocked and suspicious of his Vice-President’s negotiations, President Mills is said to have set up a three-man committee, comprising William Aboah, George Amoah and Brigadier General Allotey (rtd), to investigate the processes leading to the acquisition of the aircraft.

It is however said that the committee was dead on arrival because President Mills was confronted and warned of the implications of investigating then Vice-President Mahama, as well as other government officials and top military officers.

Mr Amidu said, “Pressure groups never allowed the committee to take off. But the very fact that the late President Mills contemplated this committee meant that he was uncomfortable with and suspicious of the alleged inflated prices of the aircraft.”

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Last modified on Monday, 03 February 2020 06:16

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