Global Bribery and Corruption ring !!! FBI and Justice Department probe 'world's biggest bribery scandal' as oil firms are accused of paying billions to corrupt officials

Leaked confidential documents show that oil contracts worth billions were awarded on the basis of bribes, many organised by a 'fixer' company known as Unaoil, run by Ata Ahsani (pictured

Trail of the huge globe spanning grand oil 'payola' scandal ....    News report claims 'fixer' firm Unaoil paid billions in bribes to help multinational companies secure contracts, including in the Middle East

 

    U.S. firms Halliburton, former subsidy Kellogg, Brown & Root and Texas firm National Oilwell Varco are all implicated
    Leaked documents allegedly prove corruption between 2000 and 2012
    Unaoil has denied corruption, while companies involved have stated their anti-corruption policies and committed to working with investigators   

 

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The FBI and Justice Department have launched an investigation into alleged oil industry corruption worth billions of dollars after American companies were implicated in leaked documents. American authorities will be investigating alongside their British and Australian counterparts after an investigation by  Huffington Post uncovered an alleged bribery racket stretching around the globe. Leaked documents obtained by HuffPo show government contracts worth billions were awarded on the basis of bribes, many organised by a 'fixer' company known as Unaoil, it is reported.
The news report, produced alongside Fairfax, said bribes were paid on behalf of many major international companies across Asia, Europe, the United States and Australia.
U.S. giant Halliburton and its former subsidiary Kellogg, Brown & Root are implicated, along with Texas firm National Oilwell Varco, Singapore conglomerate Keppel, Norway’s Aker Kvaerner and giant Turkish joint venture GATE.

Individual executives and managers from Halliburton and Kellogg Brown & Root, which split in 2007, knew or suspected that Unaoil was acting corruptly to win contracts in Kazakhstan, it is reported.

Meanwhile managers from Italian firm Eni, Spanish Firm Tecnicas Reunidas, French firm Technip, drilling giant MI-SWACO and British company Rolls-Royce actively supported bribery and were offered or pocketed their own bribes, it is alleged. 

U.S. defense giant Honeywell and Australian firm Leighton Offshore agreed to hide bribes inside fraudulent contracts in Iraq, the news report claims.

Unaoil, which is incorporated in Monaco but based in the British Virgin Islands, posited itself as providing 'industrial solutions to the energy sector in the Middle East, Central Asia and Africa.'

Essentially the company's job was to help international firms win contracts in parts of the world where they didn't operate and had no local expertise.

The company, run by Ata's sons Cyrus (left) and Saman (right), is based in Monaco and helps firms secure contracts in parts of the world where they don't operate. But leaked documents allegedly show many of these contracts were secured using bribes

While it is common for large, global companies to use such a fixer service, documents acquired by HuffPo and Fairfax show Unaoil was winning these contracts by bribing corrupt local officials. 

In one case, it is claimed, money was paid to middlemen in a bid to influence senior Iraqi officials - including the deputy prime minister - in order to win more than $1.3billion in oil contracts.

Similar deals were arranged in Yemen, UAE, Kuwait, Syria, Libya and Iran, the report says, fueling corruption and resentment which was one of the leading causes of the Arab Spring.

The leaked files allegedly indicate representatives of the companies sometimes believed they were hiring genuine lobbyists when the outside persons involved were involved in paying bribes.

At the centre of many of the deals is Unaoil, which allegedly uses its connections and relationships to influence others and help companies win lucrative government contracts.
The extent of the corruption in the oil industry was reported to be vast, with The Age branding it 'the world's biggest bribery scandal'. 

Ten years ago, it is believed those running Unaoil, the family business said to be responsible for providing the bribery services, had €190m between them in cash, shares and property.

It is run by the Ahsani family, father Ata and sons Cyrus and Saman, and based in Monaco.

A Monaco-based company called Unaoil cultivated an astonishing web of influence.

The Bagman

There was little about the man walking through Heathrow Airport to show he held secrets that could bring down some of the most powerful men in Iraq.
Moustached, olive skinned, hair receding, eyes sharp. His name was Basil Al Jarah. His British passport showed he lived in Hull, an unremarkable town in the north of England, but it bore the stamps of a frequent traveller: London, Baghdad, Basra, Amman, Paris, Istanbul, Kuwait.
Basil Al Jarah was an oil industry fixer. But had authorities known his true business, they might have taken a far keener interest in the man waiting for a plane to Amman in 2011. Because by that stage, Al Jarah and his employer, a Monaco-based company called Unaoil, had cultivated an astonishing web of influence in the upper echelons of Iraqi power – all based on the simple expedient of bribing the right man at the right time.

As tens of thousands of secret emails reveal, Al Jarah and Unaoil were at the heart of a global bribery operation funded, sometimes wittingly, by dozens of US, British, European and Australian multinationals. These firms paid huge sums to Unaoil. In return, Unaoil used its friends in high places to win billions of dollars worth of government contracts.
In Iraq, the man charged with making those friends was Al Jarah. From 2003 onwards, he used his influence to help deliver huge contracts to Unaoil’s clients. It did not matter if these clients were more expensive or less capable than their competitors. Unaoil and Al Jarah were, in effect, fleecing the people of Iraq, and in the process making a mockery of the US government’s promise, after toppling Saddam Hussein, to ensure Iraq’s oil wealth would benefit all Iraqis.
Al Jarah was careful to cover his tracks. He struck deals in hotel rooms late at night and used code words to communicate. To understand the scale of Unaoil’s Iraq operation, someone would have to break these codes. And to do that they would need access to thousands of emails. It is almost certain Al Jarah never believed this possible.
But last year, Fairfax Media and The Huffington Post began investigating the underbelly of the global oil and gas industry. After many months of digging and a trip across Europe, our reporters uncovered a treasure trove of emails and memos. The 66-year-old former ship’s captain from Hull, Basil Al Jarah, was the author of many of the most colourful.

They reveal him routinely bribing government officials who were deemed “useful to us” and to Unaoil’s clients – multinationals such as British firms Rolls-Royce, Petrofac and Clyde Pumps, US listed giants Weatherford, Cameron/Natco and FMC Technologies and European firms such Saipem, SBM Offshore and MAN Turbo.
The emails suggest that for years the very highest levels of Iraq’s oil industry – up to and including the deputy prime minister – has been corrupted with impunity under the noses of Iraqi, British, European and US authorities. This despite strict laws in the west designed to prevent foreign bribery. They also tell us what Al Jarah’s main goal was as he flew across Europe and the middle east that day early in 2011 — to influence two of the most powerful men in Iraq on behalf of a company that had agreed to pay bribes of up to $40 million.
In 2003, when US-led forces rolled into Baghdad, the oil ministry was among the sites designated for immediate protection. As looters stumbled out of museums clasping irreplaceable antiquities, coalition troops and tanks encircled the ministry building.
The message was clear. Iraq’s future lay beneath its blood-soaked earth, in some of the world’s biggest oil reserves. The question was, who would benefit?
In 2006, three years after the invasion, as conflict raged on, US President George W Bush insisted that the oil belonged to the Iraqi people: “It’s their asset,” he said. The US would help the new government of Nouri al-Maliki use the nation’s resources to build a new Iraq.
That meant increasing oil production. It meant repairing wells. It meant new pipelines, infrastructure and technology. The government couldn’t do it alone. It would need the expertise and resources of the giant American, British and European energy companies.
To ensure a fair and transparent process, the Iraqi government sought to run competitive tenders. The Saddam era, when the foreigner who paid the biggest kickback won would win the job, had supposedly been consigned to history.
Unaoil, though, was old school. By the time of Bush’s declaration, it had been operating in Iraq for three years, with Al Jarah as country manager. Unaoil favoured the old kickback system, albeit with a new crop of officials to be bribed.
A 2005 email illustrates their modus operandi. Al Jarah wrote to Unaoil colleagues about a meeting at Paris’ Charles De Gaulle airport with a senior manager from US firm FMC Technologies. FMC’s “past contacts who held sway in the old [Saddam Hussein] regime are worthless now,” he wrote.
“FMC must look to the future with new contacts and new faces. [FMC manager] requested time to disentangle himself from his current agent to sign up with Unaoil.”
According to his email, Al Jarah had struck a deal for Unaoil to get a 5 to 10 per cent cut of any contract it could win for FMC in Iraq or Kuwait. In Kuwait, for example, FMC had promised to pay Unaoil $2.5 million to win a $25 million contract. Unaoil could use a “portion” of that fee to pay-off “the big cheese in Kuwait”.

Rolls-Royce Treatment

Al Jarah then approached a senior Iraq oil official, Kifah Numan, to help the US firm. FMC wanted to win contracts that had already been promised to its rivals. “I have to lean really heavy on Kifah to swing this if at all possible. I will start softening Kifah from tonight.”
Numan, in fact, features repeatedly in Al Jarah’s emails. Once in Dubai, Al Jarah had to “baby sit [Numan] for 4-5 days” to ensure none of Unaoil’s competitors made contact.
“He is too valuable to leave him lose [sic] in Dubai for other suppliers,” Al Jarah warned. Sometimes the attention was surprisingly personal, and trivial. Al Jarah spent “US$2,684.00 for Gifts for Mr Kifah during London visit”, including “Perfume, Various CD’s, Mobile Top-Up and Leather Jacket”.
At the time, Al Jarah was duchessing Numan on behalf of Unaoil client Rolls-Royce, which was chasing generator supply contracts worth tens of millions of dollars.
“Getting hold of Kifah to just spend any time with him is a bonus other contractor/suppliers would give their right arm for. Hence spending $2,684 on a key decision maker and remain in his good books to process things … is worth 100 times that value, without which we would have no contract [for Rolls-Royce] in our hands now.”
In a later email, Al Jarah wrote that Numan had advised him that Unaoil and Rolls-Royce could charge the Iraqi government inflated prices, to ensure fatter profits.
“He advised that cost will be no object… I expect we should make a minimum of $2m per [Rolls-Royce generator] unit net. After all costs have been taken into account.”
Rolls-Royce has told Fairfax Media and the Huffington Post that concerns about bribery involving intermediaries are being investigated by the British Serious Fraud Office “and other authorities”. Rolls-Royce is co-operating, said a spokesman, but “do not comment on ongoing investigations”.
In 2008, Numan became director general of the Iraq Government’s powerful South Oil Company, which was in charge of the country’s most valuable oil fields and infrastructure.
“Kifah called me yesterday,” wrote Al Jarah, “he still didn’t know if the news is confirmed. He said he… is planning to come to Dubai next week while I am here … Don’t know about you, I am having few beers today to celebrate.”
The response from Unaoil CEO Cyrus Ahsani was equally upbeat: “Excellent and let’s see how we can quickly do certain things to make sure we are the only ones with access.”

Photo: Alamy

U.S. giant Halliburton and its former subsidiary Kellogg, Brown & Root are implicated, along with Texas firm National Oilwell Varco (file image) 

According to HuffPo, techniques used by the company's employees may include bribing officials, organising rigged tender committees, avoiding the tender process altogether, or leaking information.

Unaoil earned its money by securing a percentage stake in all profits generated by a deal its 'fixers' helped to establish, the report claims.

Having secured its own cut in advance, the company then used a portion of that money to pay bribes to relevant officials, before keeping the rest for itself, it is claimed. 

Unaoil owner Ata Ahsani was quoted as denying any wrongdoing, saying the company 'absolutely' does not bribe officials.

All of the companies implicated in the report have stated their strong anti-corruption policies and have stated their commitment to working with investigating officials. 

U.S. Oil Industry Giant Paid Millions To A Company At The Center Of Huge Corruption Scandal

While KBR was being investigated for bribery in Nigeria, it was partnering with a company that bribed officials in Kazakhstan.

Photo: Daniel Berehulak/Getty Images

The Houston-based KBR is again in the middle of a foreign bribery scandal just seven years after pleading guilty to bribing Nigerian government officials.

The American engineering and construction firm KBR hired Unaoil — an obscure Monaco-based company now involved in a massive international bribery scandal — to help it win oil and gas contracts in Kazakhstan. KBR, which until 2007 was part of the oilfield services giant Halliburton, paid Unaoil millions of dollars from 2004 until at least 2009, according to thousands of internal documents obtained by The Huffington Post and Fairfax Media.
Halliburton and KBR have been in trouble for bribery in the past. After a years-long federal investigation, KBR pleaded guilty in 2009 to multiple criminal counts of violating U.S. foreign corruption laws by bribing Nigerian officials. KBR agreed to pay $402 million as part of a settlement. Halliburton and KBR also paid $177 million to settle SEC civil charges related to the same conduct. Three years later, Albert “Jack” Stanley, KBR’s former CEO, was sentenced to 30 months in federal prison for his role in the scandal. As part of the deal with the Justice Department, KBR agreed to waive many of its legal rights if it was caught violating bribery laws again.
In the midst of the DOJ investigation, a KBR employee emailed Unaoil to warn the American company was “tightening” anti-corruption controls in response to the federal probe. Despite this, KBR continued to pay Unaoil for work in Kazakhstan for years afterward.

Throughout the emails, Unaoil and Halliburton/KBR employees use code words to refer to partners in Kazakhstan. In February 2005, Richard Stuckey emailed Unaoil executive Peter Willimont from a Halliburton email address, urging him to start “hobknobbing” [sic] with insiders immediately. “My feeling is that a good spaghetti house is where it is at of course a little shashlik for lunch is good to digest also,” Stuckey wrote.
The code names — which referred to an Italian oil company (spaghetti) and Kazakhstan’s state oil apparatus (shaslik, a form of kebab popular in Kazakhstan) — won’t protect Halliburton or KBR.
“If those emails were written after KBR was under investigation by the DOJ for prior violations, then the penalty will be far higher than it would be if this was a first-time violation,” says Andy Spalding, a law professor at the University of Richmond who runs a blog on foreign bribery. “It doesn’t matter what they’re going to argue, because a third-party law firm is going to come in and read all these emails and interview all these employees and they’re going to detect really quickly that they’re not talking about food.”
In 2004, Unaoil began trying to win a joint contract for KBR and Petrofac, a British firm, to work on the massive Kashagan oil field. The Kazakh Institute of Oil and Gas (KING), a wing of Kazakhstan’s state-owned oil company, had been paying a man named Leonida Bortolazzo as a consultant, according to a memo a Halliburton/KBR employee sent bragging about Bortolazzo’s influence in the country. But Unaoil was also paying Bortolazzo as much as $80,000 a month, according to a contract between the Monaco firm and Bortolazzo’s consulting company. In one instance, Unaoil bought tens of thousands of dollars worth of high-end furniture for Bortolazzo, according to emails. Unaoil’s contract with Bortolazzo also included a $165,000 signing bonus.
Halliburton had tried unsuccessfully since 1998 to secure contracts in Kazakhstan but hit repeated roadblocks. The development of the Kashagan field, one of the biggest reserves discovered in decades, is managed by the clunky bureaucracy of Kazakh dictator Nursultan Nazarbayev with the help of a clique of international energy giants.
KBR’s partnership with Unaoil was designed to give it an advantage in the Kashagan contracting process just as the international oil companies that were managing the field began moving ahead on their final plans to develop it.
Unaoil’s focus on Italians, including Bortolazzo, shows that it knew whom to target. Bortolazzo was a former manager at ENI, an Italian oil firm that’s been repeatedly accused of corruption. ENI — the “spaghetti house” in the emails  — is one of the smallest oil companies involved in managing the Kashagan field, but it has taken the lead on the reserve’s development under a 2001 agreement between the foreign conglomerates and Kazakhstan’s state-owned oil company. Leaked Unaoil emails indicate that Unaoil executives were trying to convince Halliburton/KBR managers they could procure confidential information from paid sources within ENI and the Kazakh government.
“We need to convince Richard [Stuckey, of Halliburton/KBR] … that we own the spaghetti house & have a lease on the shashlik takeaway,” Unaoil’s Willimont wrote, forwarding Stuckey’s February 2005 email to Cyrus Ahsani, the CEO of Unaoil and the son of the company’s founder. “This done we can get our deal signed.”  
Convincing Halliburton/KBR of its influence in Kazakhstan required Unaoil to accommodate some unusual requests. In August 2008, after KBR had split from Halliburton, Unaoil spent tens of thousands of euros on hotel rooms for Kazakh officials visiting Monaco, where Unaoil is headquartered, according to emails. That particular expense shows just how much suction Unaoil won in Kazakhstan for its American client: Among the officials it hosted was Kairat Boranbayev, at the time the chairman of the board of the Kazakh state oil company’s joint venture with Gazprom, Russia’s state-owned gas monopoly. Unaoil officials were at pains to find him space at a “Prestigious Hotel” given that he was visiting right as Monaco was hosting high-profile soccer matches. Boranbayev ended up in a suite at the Fairmont worth €1,700 a night. His aides stayed in more basic rooms that only cost €900 nightly. Boranbayev is today known for his ties to the Kazakh dictator (his daughter married Nazarbayev’s grandson at a 2013 wedding featuring Kanye West), lavish moves like paying Pussycat Dolls star Nicole Scherzinger more than $100,000 to perform at his posh London home and his control of Kazakhstan’s McDonald’s franchise.
The expenses were worth it for Unaoil because of KBR’s high profile. “This is the best agency we have have ever had,” Willimont wrote in a June 2008 email to Cyrus Ahsani. “Our ability to live from the reputation of working with KBR is immense.” Unaoil would tout its work with KBR in marketing materials for years to come.
Did Unaoil bribe public officials? “The answer is absolutely no,” Ata Ahsani, the company’s founder, told The Huffington Post and Fairfax Media.
The “alleged behavior” of “some” of “Eni’s employees is in detriment of the company, as well as in direct and obvious conflict with Eni’s code of ethics that any employee is required to fully comply [with],” an Eni spokeswoman said in an email. “We do not comment … on the results of possible internal investigations.“ The spokeswoman was not referring to Bortolazzo specifically.
Bortolazzo did not respond to a request for comment.
Kazakhstan’s embassy in Washington did not immediately respond to a request for comment on the role of the state-owned oil company and associated officials. A spokesperson for Boranbayev said he was on vacation and not available for comment.
Halliburton and KBR deny wrongdoing. “Halliburton maintains an active, comprehensive Ethics & Compliance Program which includes business practices and policies to ensure that Halliburton and its employees are compliant with all regulatory laws and requirements globally,” Halliburton said in an email to The Huffington Post. “We have no current or recent relationship with [Unaoil]. Halliburton has not owned KBR since 2007 so we have no knowledge of its business relationships.”
KBR “is committed to conducting its business honestly, with integrity, and in compliance with all applicable laws,” the company said in a statement. “We do not tolerate illegal or unethical practices by our employees or others working on behalf of the Company.”
But emails between Unaoil and Halliburton/KBR employees during the Justice Department’s investigation into previous bribery allegations show a company rushing to discontinue practices that could raise red flags with investigators, but not severing the underlying partnership. In July 2005, Tony Fossey, KBR’s finance manager for the Kashagan Project, emailed Willimont to discuss KBR’s “Nigerian agent problem,” referring to the Justice Department’s investigation into the group bribing Nigerian officials to win contracts. Fossey, who left the company that year, refused to comment on the record.
At the time, Unaoil listed a London address on its contract with KBR, but requested payment from KBR through a wire transfer to Monaco. “A part of the fall-out from [the DOJ investigation], is a considerable, ‘tightening’ or our US management’s approach to controlling the whole arena of agent payments,” Fossey wrote to Willimont, explaining that sending payment to Monaco, a country not listed on the contract, could violate FCPA rules. It’s not clear from the emails whether the payment ever went through.
In 2006, Halliburton objected to making a payment to a bank account in the Channel Islands, a notorious offshore tax haven, on the grounds that the Unaoil subsidiary named in their contract was in fact based in Monaco, according to emails. Unaoil agreed to accept payment at its Monaco bank account.
In 2008, Unaoil employees determined the company needed a new bank account in Kazakhstan to receive payments from KBR. “We need to open a new Bank Account… in Kazakhstan into which our future KBR revenues will flow,” Sandy Young, Unaoil’s finance manager, wrote to another employee in February of that year. “More and more our principals are asking to have the right to audit our companies as part of their governance rules and it is much easier for us to comply with this request if we use a separate bank account (this way we can limit the access we give them to information about our company activity).”
As late as January 2009, KBR was making payments to Unaoil. That month, it paid $936,713.37 to Unaoil’s new account in Kazakhstan, according to a bank transfer record included in one of the emails.
A few weeks later, on Feb. 11, KBR entered into a deferred prosecution agreement with the Justice Department regarding its activities in Nigeria, and agreed to pay a $402 million criminal fine. Its work with Unaoil didn’t come up.
Patrick Stokes, one of the three lawyers who prosecuted the Nigeria case against KBR, is still a top official at the Justice Department division charged with cracking down on foreign bribery.

Attempts by Unaoil muzzle the press:
Threatened To Seek Injunction Before Publication Of Bribery Expose

An Australian media company partnered with The Huffington Post on a six-month investigation that began with a source’s unusual request.

Fairfax Media

The Age splashed the investigation into Unaoil across Thursday’s front page. 

NEW YORK — Unaoil, the Monaco-based company at the center of an international bribery scandal, threatened this week to prevent publication of an investigation into its business practices.
Australia’s Fairfax Media and The Huffington Post on Wednesday published the results of a six-month investigation into Unaoil paying bribes on behalf of major corporations doing business in the Middle East. The reporting was supported by hundreds of thousands of leaked emails and documents.
Before the articles were published, attorneys representing Unaoil and its owners, the Ahnsani family, requested that Fairfax Media — which owns major Australian outlets like The Age newspaper — turn over all copies of confidential information or data possessed by its journalists, Nick McKenzie and Richard Baker. 
“We also request that Fairfax desist from publishing any material concerning our clients until such time that our clients have been able to verify that their confidential data is not being used to make scandalous and defamatory allegations,” Rebekah Giles, an attorney in the Sydney office of law firm Kennedys, wrote in a March 29 letter. 
Giles wrote that the firm’s clients reserved the right to seek “urgent interlocutory relief” — in other words, an injunction to possibly prevent publication. That threat now seems moot, since Fairfax Media published the results of its investigation online Wednesday and in in its print edition on Thursday.
Giles did not respond to a request for comment.

How the investigation started....

In a separate article, McKenzie described the bribery investigation’s unusual genesis. It began after he received a letter from a source, who asked that he place an advertisement in a French newspaper using the code name “Monte Christo.”
McKenzie and the source communicated back and forth for several months and finally met in Europe. The award-winning journalist described being introduced later to additional sources and eventually receiving large chunks of information, including tens of thousands of Unaoil emails.
“The sources of this story never asked for money,” McKenzie wrote. “What they wanted was for some of the wealthiest and most powerful figures in governments and companies across the globe to be exposed for acting corruptly, and with impunity, for years.”

Courtesy: Huffpost
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