Tesler Also Faces Prison In France

Responding to our post about Jeffrey Tesler's court appearance in Houston earlier this year to plead guilty to conspiracy to violate the Foreign Corrupt Practices Act and a substantive FCPA count, a reader sent a startling note.

The correspondent, who refers to himself as a 'French FCPA Blog addict for years' -- [thanks from us] -- said:

Dear FCPA Blog,

I would just like to add that Mr Tesler is expected to be sentenced in Paris (France) criminal court on 11 June 2012.

His lawyer said Tesler will plead not guilty. He faces ten years of jail for corruption of foreign public officials.

Reminder:

Before the DOJ launched its investigation about the Bonny Island NGL plant (with KBR Halliburton, Technip, ENI Snamprogetti and JGC corp); it was first a French judge, Renaud Van Ruymbeke, who launched an investigation about money laundering with Tri-Star Investments in Gibraltar and links with offshore accounts in Switzerland and Monaco.

Because of France's lack of political will to pursue foreign public bribery (and most of all French companies when they are bribing abroad), the U.S. Treasury won $1.6 billion thanks to this French judge requesting mutual legal assistance from the U.S.

Another example of the difficulty of multi jurisdictional investigations...

Here is the link to the news story (sorry it's in French).

Yours sincerely ....

______________________

Editor's note: Here's what sourcewatch said about the French judge:

Renaud Van Ruymbeke is the French investigating magistrate probing accusations of large-scale bribery and corruption against Halliburton KBR and Technip SA.

Van Ruymbeke has become one of the world's top corruption fighters. With fellow magistrate Eva Joly, he investigated the then-publicly-owned French oil company Elf Aquitaine, which was being used as a private slush fund by French politicians and company executives, winning prison sentences for the former Foreign Minister Roland Dumas and the company's president.

While investigating Elf, Van Ruymbeke discovered a $180 million slush fund, believed by many to have been the conduit for the extravagant bribery of Nigerian officials by the TSKJ consortium.

Van Ruymbeke is also investigating the Bin Laden family financial empire and the possibility that it funneled money to Osama Bin Laden much later than previously claimed. If he discovers such links, the family fortune may be exposed to claims from victims of Osama's terrorist attacks.

Bloomberg: Suit Alleges Koch Industries Routinely Paid Bribes Overseas

An article in today's Bloomberg Markets Magazine said there were detailed allegations of systematic overseas bribery in a French lawsuit against one of the world's biggest privately owned companies, Koch Industries.

The lawsuit was filed by a former compliance officer, Ludmila Egorova-Farines. She was hired in May 2008 to investigate the management of a subsidiary in Arles, France.

Bloomberg said she discovered widespread bribery to win contracts in Africa, India, and the Middle East. She also found evidence that Koch subsidiaries had often done business with Iran, despite various government sanctions prohibiting the trade.

She was fired about a year later. She sued Koch in France for wrongful termination.

Bloomberg's article by reporters Asjylyn Loder and David Evans runs 7,000 words. It's the first report anywhere about the allegations contained in documents on file in the French lawsuit, Bloomberg said.

Kansas-based Koch Industries is owned by Charles Koch, 75, and his brother David, 71, 'each worth about $20 billion,' according to Bloomberg. They are controversial for their political activism, sometimes characterized as anti-government.

Their company manufactures petrochemicals, water processing and pollution control equipment, and paper products, among others. It doesn't release financial reports. Bloomberg estimates its revenue last year at around $100 billion.

The DOJ had no comment about the report, Bloomberg said. The SEC is not involved because privately owned Koch Industries isn't an 'issuer' under the FCPA.

OECD Enforcement Scores

Transparency International's latest report about antibribery enforcement in the OECD breaks down this way:

Active Enforcement: Seven countries: Denmark, Germany, Italy, Norway, Switzerland, United Kingdom, and United States

Moderate Enforcement: Nine countries: Argentina, Belgium, Finland, France, Japan, Korea (South), Netherlands, Spain, and Sweden

Little or No Enforcement: 21 countries: Australia, Austria, Brazil, Bulgaria, Canada, Chile, Czech Republic, Estonia, Greece, Hungary, Ireland, Israel, Luxembourg, Mexico, New Zealand, Poland, Portugal, Slovak Republic, Slovenia, South Africa, and Turkey

For specifics, the report said the United States has 227 cases (prosecutions and investigations) in the 2011 report, up from 169 in 2010; Germany has 135 cases, up from 117; and Brazil reports eight ongoing investigations, up from four in TI’s last report.

The U.K. made it into the "active enforcement" category. But TI said enforcement there is up in air. The Serious Fraud Office is facing budget cuts and a plan to break the agency up and send its functions to other government departments. (The break-up didn't happen; see our post here.)

In France, there's also uncertainty. Although the country is listed in the "moderate enforcement" category, with eight French prosecutions reported last year, "only one resulted in a conviction, while the others have apparently been closed." And only one new investigation of a major French company was opened.

Canada is cited for a lack of progress, and placed in the "little or no enforcement" category, the only G7 country put there.

Russia passed an overseas antibribery law and last week was invited to join the OECD’s Working Group on Bribery.

Earlier this year, the Chinese Parliament also passed an overseas antibribery law, and one was introduced in the Indian Parliament. Chinese and Indian representatives are attending Working Group meetings as observers but the countries aren't yet on a schedule to join the OECD Convention.

Click on the map above for TI's interactive version.

Alstom's Swiss Banker Acquitted

A Swiss federal criminal court last week acquitted a private banker in Zurich of bribery and money laundering charges growing out of his relationship with French firm Alstom SA.

According to a report Thursday by Gabriella Broggi in BusinessWeek, Oskar Holenweger was charged with taking bribes of CHF1 million ($1.1 million) to open 163 anonymous bank accounts that Alstom used to bribe foreign officials.

After acquitting Holenweger, the Swiss court awarded him damages of more than CHF400,000 Swiss francs ($451,000).

The president of the Swiss court, Peter Popp, said none of the charges in the seven-year prosecution were supported by adequate evidence. "The question whether he knew that the money would be used for bribery remains unanswered," Popp told BusinessWeek.

Prosecutors said Alstom used the Swiss accounts to pay CFH80 million ($90 million) in bribes to officials in South America and Asia to win work.

Paris-based Alstom provides equipment and services for power generation and high-speed rail transport. It operates in more than 70 countries with 93,000 employees. Revenue last year was about €23 billion. Its ADRs trade in the pink sheets under the symbol ALSMY.PK.

In March last year, the U.K.'s Serious Fraud Office reported the dramatic arrest of three top Alstom executives from its British unit. They were suspected of paying bribes overseas to win contracts.

After those arrests, the company said:

Several Alstom offices in the United Kingdom have been raided on Wednesday 24 March [2010] by police officers and some of its local managers are being questioned. The police apparently executed search warrants upon the request of the Swiss Federal justice. Alstom has been investigated by the Swiss justice for more than 3 years on the motive of alleged bribery issues. Within this frame, Alstom’s offices in Switzerland and France have already been searched in the past years. Alstom is cooperating with the British authorities.

In August 2008, we reported that Swiss police had arrested a former Alstom manager and searched for evidence as part of a corruption and money-laundering investigation. Offices near Zurich and in Baden were raided, as were homes in several cantons.

Reports in May 2008 said Swiss authorities found evidence Alstom paid around €20 million via shell companies to agents and others in Singapore, Indonesia, Venezuela and Brazil. Reports also mentioned payments of $6.8 million in connection with a $45 million contract for the Sao Paolo subway and a Brazilian energy plant.

The DOJ and SEC haven't commented on the Alstom case.

Nailing His Assets

Former Tunisian President Zine El Abidine Ben AliLast month, Tunisia's citizens decided they'd finally had enough of their kleptomaniacal president Ben Ali, who managed to escape to Saudi Arabia.

By the time of his hasty departure, he'd ruled the country for 23 years and reportedly had expropriated for the private enjoyment of himself and his family about a third of the country's economy.

The new Tunisian government -- welcomed by the international community like a fresh-faced debutante -- arrested 33 of his family members and issued an international warrant for the former president. It also started hunting for everything Ben Ali and his clan had stripped from the country's shelves. 

How much loot is there?

Probably around $5 billion, according to a lawsuit filed in Paris by Sherpa, Transparency International France, and the Arab Commission for Human Rights. They're alleging corruption, misusing public funds, and money-laundering. 

TI says the family of Ben Ali's wife, Leila Trabelsi, could have up to 30 properties in Paris, the Alps, and the Cote d'Azur, and millions of dollars in French bank accounts.

Last week, pressed by Tunisia and the NGOs, the EU put a freeze on anything owned by Ben Ali and 46 of his family members and friends. By then, French authorities had already seized an executive jet at Le Bourget airport near Paris owned by the family of Ben Ali’s son-in-law. And Swiss officials had frozen bank accounts holding tens of millions of francs, and had grounded another executive jet in Geneva allegedly owned by the ex-president's family.

Nicolas Beau, who co-wrote a book about Leila Trabelsi that was banned in Tunisia until last month, told the BBC it won't be hard to prove that "holdings had been illegally acquired, due to a paper trail and to the sheer number of people involved in the family's business dealings."

"Despite the nature of the regime in Tunisia, a very strong tradition of regulation survived," he said. "Everything was legislated for, everything was written down.

"Everyone had to deal with it, there are an innumerable number of witnesses."

And, he might have added, people whose homes and businesses were expropriated by Ben Ali's family aren't likely to have forgotten about it.