US firm paid bribes to win water projects in Goa, Assam
Bribe for Goa project estimated at $976,630
Press Trust of India | Washington
July 18, 2015 Last Updated at 23:57 IST
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A New Jersey-based construction management firm has been charged with bribing Indian officials to win two major water developmental projects in Goa and Guwahati. The bribe, of $976,630 for a Goa project by Louis Berger, included that to a minister, the details of which have not been disclosed by the US Department of Justice.
On Friday, the company agreed to pay a $17.1-million criminal fine to resolve charges that it bribed officials in India, Indonesia, Vietnam and Kuwait to secure government construction management contracts. Two of its former executives, Richard Hirsch (61) of the Philippines and James McClung (59) of the UAE, pleaded guilty to the charges.
Previously, McClung had served as senior vice-president, responsible for the firm’s operations in India and Vietnam.
Sentencing hearings for Hirsch and McClung are scheduled for November 5 this year.
The Indian government, assisted by its Japanese counterpart, had initiated the five-year Goa water supply and sewerage project to expand, rehabilitate and build water and sewerage facilities. Louis Berger was part of a consortium responsible for the project in Goa. The consortium included two Japanese firms and an Indian partner.
The team developed a project management information system and plan, evaluated bids, reviewed design and construction plans, and ensured quality work was done on time and within the budget, the company said on its website.
In an 11-page charge sheet, US federal prosecutors alleged Louis Berger maintained a detailed diary and account of bribery to Indian officials. On August 26, 2010, “a consortium partner prepared a payment-tracking schedule, stating the company had paid $976,630 in bribes in connection with the Goa project to date”, federal prosecutors told a court in New Jersey.
“Along with several consortium partners, the company won two water development projects in Goa and Guwahati. The company paid bribes to win both these contracts,” the prosecutors alleged.
On August 17, 2010, a consortium partner sent an e-mail to James McClung, stating, “As discussed, I enclose the details, as provided by (the third-party intermediary). I have also added the details of amounts paid to (the company) as of date by (the consortium partner) in the same sheet.”
The attachment included an entry: “Paid by (an agent of the company) to the minister on behalf of the agent,” the prosecutors said.
According to court documents, the company, through its employees and agents, used terms such as “commitment fee”, “counterpart per diem”, “marketing fee” and “field operations expenses” as codes to conceal the true nature of the payments and utilised cash disbursement forms and invoices that didn’t truthfully describe the services provided or the purpose of the payment.
The documents showed the company, through its employees, agents and consortium partners, kept track of the bribe payments by circulating a spreadsheet among them, which showed the proportionate share of every bribe they had paid the officials overseeing their work on the Goa and Guwahati projects.
On Friday, the company agreed to pay a $17.1-million criminal fine to resolve charges that it bribed officials in India, Indonesia, Vietnam and Kuwait to secure government construction management contracts. Two of its former executives, Richard Hirsch (61) of the Philippines and James McClung (59) of the UAE, pleaded guilty to the charges.
Previously, McClung had served as senior vice-president, responsible for the firm’s operations in India and Vietnam.
Sentencing hearings for Hirsch and McClung are scheduled for November 5 this year.
The Indian government, assisted by its Japanese counterpart, had initiated the five-year Goa water supply and sewerage project to expand, rehabilitate and build water and sewerage facilities. Louis Berger was part of a consortium responsible for the project in Goa. The consortium included two Japanese firms and an Indian partner.
The team developed a project management information system and plan, evaluated bids, reviewed design and construction plans, and ensured quality work was done on time and within the budget, the company said on its website.
In an 11-page charge sheet, US federal prosecutors alleged Louis Berger maintained a detailed diary and account of bribery to Indian officials. On August 26, 2010, “a consortium partner prepared a payment-tracking schedule, stating the company had paid $976,630 in bribes in connection with the Goa project to date”, federal prosecutors told a court in New Jersey.
“Along with several consortium partners, the company won two water development projects in Goa and Guwahati. The company paid bribes to win both these contracts,” the prosecutors alleged.
On August 17, 2010, a consortium partner sent an e-mail to James McClung, stating, “As discussed, I enclose the details, as provided by (the third-party intermediary). I have also added the details of amounts paid to (the company) as of date by (the consortium partner) in the same sheet.”
The attachment included an entry: “Paid by (an agent of the company) to the minister on behalf of the agent,” the prosecutors said.
According to court documents, the company, through its employees and agents, used terms such as “commitment fee”, “counterpart per diem”, “marketing fee” and “field operations expenses” as codes to conceal the true nature of the payments and utilised cash disbursement forms and invoices that didn’t truthfully describe the services provided or the purpose of the payment.
The documents showed the company, through its employees, agents and consortium partners, kept track of the bribe payments by circulating a spreadsheet among them, which showed the proportionate share of every bribe they had paid the officials overseeing their work on the Goa and Guwahati projects.
SIMILAR INSTANCES IN THE PAST *
Koch Industries
Allegation: An internal investigation in 2008 revealed the company had paid bribes in India, among other countries, to secure contracts
Enron Corporation
Allegation: Enron allegedly spent $60 million for educational purposes, the bulk of which was used to pay bribes to secure various government approvals for its gas-based power plant in Maharashtra
WalMart Corp
Allegation: In 2012, the BJP alleged the retailer’s India arm spent money on lobbying and paid bribes. Walmart denied the charges
Oracle
Allegation: In 2012, the US Securities and Exchanges Commission filed charges against Oracle Corp, saying its India unit, Oracle India, had set aside $2.2 million between 2005 and 2007 for unauthorised payments in India. The money was in a separate account; SEC said this violated the Foreign Corruption Practices Act
Xerox
Allegation: In July 2002, Xerox Corporation admitted to the US regulator, the SEC, that it paid $700,000 to Indian govt officials as bribes to get contracts. A probe followed but nothing emerged
* Not a comprehensive list
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