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Entries in William Jefferson (41)

Thursday
Dec252008

Help Wanted For Siemens Report

One of ProPublica's outstanding investigative reporters, T. Christian Miller, wrote the story below (which ProPublica co-published with MSN Money). We reprint it under ProPublica's generous license ("You can republish our articles for free, if you credit us, link to us, and don't edit our material or sell it separately.")

If you have trouble accessing the DOJ and SEC charging documents linked in the story (we did), you can also find them at the bottom of our earlier post here.

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Help Us Name Names in Siemens Corruption Scandal

by T. Christian Miller, ProPublica - December 22, 2008 1:05 pm EST

Get ready for the Siemens World Corruption Tour, 2001-2008. Siemens pleaded guilty last week to corruption across the globe, receiving a record-setting fine -- $1.6 billion (which sounds like a lot, but really, it's just 0.3 percent of their revenue during those years.)

In announcing the fine, the Justice Department and the Securities and Exchange Commission released formal complaints detailing how Siemens bribed government officials all around the world. (We published a story in Sunday's New York Times profiling the Siemens accountant at the center of the scandal.)

However -- and this is a big "however" if you're into accountability -- they released none of the names of the corrupt bureaucrats that took the cash or the Siemens officials who paid it.

This was done, Justice folks said, to protect the integrity of ongoing investigations and to comply with privacy laws in various countries.

At the hearing prosecutors seemed a bit wistful that they couldn't reveal the names, which were provided to Judge Richard Leon in a sealed file. Lori Weinstein, the dogged prosecutor who pursued the case, said the department could not provide exact names. But, she said, the documents were sprinkled with clues to provide "sufficient clarity" for the court to figure out who was who.

Some identifications are vague -- there are plenty of "government officials." But others are more specific. (Hello, "Wife of the former Nigerian Vice President, a dual U.S.-Nigerian citizen.") ProPublica figures that with the help of readers, we might be able to ID at least some of these folks. Below, you'll find descriptions of the bribees. Send us a name and a link sourcing the information.

To get things started, take the case of the Argentine identity card contract. The SEC's complaint said that Siemens paid bribes to a certain "president of Argentina" who left office in 1999. Not too hard to figure out that one -- Carlos Menem ran the country from 1989 to 1999. Looks like the buck really did stop there.

This is by no means an exhaustive list. As of last count, 16 countries had investigations ongoing into Siemens. Our list below includes only those bribery schemes detailed in the formal complaints by the Justice Department and the Securities and Exchange Commission.

E-mail us if you find clues to figure out the other grafters.

Argentina
Source: SEC Complaint, p. 21
National Identity Card contract (1998-2004)
Contract Amount: $1 billion
Bribe Amount: $40 million
Recipients:

  • President of Argentina until 1999 (Carlos Menem)
  • Minister of the Interior
  • Head of Immigration Control
  • Cabinet ministers

Bangladesh
Source: SEC Complaint, p. 19
Mobile Phone contract (2004-2006)
Contract Amount: $40.9 million
Bribe Amount: $5.3 million
Recipients:

  • Son of then-Prime Minister
  • Minister of Posts & Telecommunications
  • Director of Procurement for the Bangladesh Telegraph & Telephone Board
  • In addition, Siemens Ltd. Bangladesh hired relatives of two BTTB and Ministry of Posts and Telecom officials.

Venezuela
Source: SEC Complaint, p. 14
Metro contracts (2001-2007)
Valencia and Maracaibo metro systems
Contract Amounts: $642 million
Bribe Amount: $16.7 million
Recipients:

  • A high-ranking member of the central Venezuela government
  • Two prominent Venezuelan attorneys acting on behalf of government officials
  • A former Venezuelan defense minister and diplomat

Israel
Source: SEC Complaint, p. 17
Power plants (2002-2005)
Contract Amount: $786 million
Bribe Amount: $20 million
Recipients:

  • Former director of the Israel Electric Company
  • Payments routed through brother-in-law of former CEO of Siemens Israel Ltd.

Nigeria
Source: SEC Complaint, p. 20
Telecommunications projects (2000-2001)
Contract Amount: $130 million
Bribe Amount: At least $4.5 million
Recipients:

  • Wife of the former Nigerian Vice President, a dual U.S.-Nigerian citizen who lived in the U.S.
  • "likely" the former President of Nigeria
  • "likely" the former Vice President of Nigeria

Vietnam
Source: SEC Complaint, p. 22
Hospital equipment sales (2005-2006)
Contract Amount: $6 million
Bribe Amount: $383,000
Recipients:

  • Government officials

Source: SEC Complaint, p. 27
Mobile network (2002)
Contract Amount: $35 million
Bribe Amount: $140,000
Note: Siemens did not win the project but agreed to pay 8 percent to 14 percent of project value to Vietnamese government officials
Recipients:

  • "likely" Vietnamese Ministry of Defense officials
  • Vietel, state-owned mobile phone network

China
Source: SEC Complaint, p.16
Metro trains and signaling devices contracts (2002-2007)
Contract Amount: $1 billion
Bribe Amount: $22 million
Recipients:

  • Government officials

Source: SEC Complaint, p. 18
High voltage lines (2002-2003)
Contract Amount: $838 million
Bribe Amount: $25 million
Recipients:

  • Government officials

Source: SEC Complaint, p. 23
Medical equipment sales (2003-2007)
Contract Amount: $295 million
Bribe Amount: $14.4 million
Recipients:

  • Deputy Director, Songyuan City Central Hospital, convicted in China and sentenced to 14 years in prison

Source: SEC Complaint, p.24
Hospital equipment sales (1998-2004)
Contract Amount: Unknown
Bribe Amount: $650,000
Recipients:

  • Chinese hospital officials

Russia
Source: SEC Complaint, p. 25
Traffic control system (2004-2006)
Contract Amount: $27 million
Bribe Amount: $741,419
Recipients:

  • Government officials

Source: SEC Complaint, p. 27
Hospital equipment (2000-2007)
Contract Amount: Unknown
Bribe Amount: $55 million
Recipients:

  • Russian state-owned hospital officials

Mexico
Source: SEC Complaint, p. 26
Refinery modernization (2004)
Contract Amount: Unknown
Bribe Amount: $2.6 million
Recipients:

  • Senior official of Pemex, state-owned oil company

Iraq
Source: SEC Complaint, p. 28
Oil for Food program (2000-2003)
Contract Amount: $124 million
Bribe Amount: $1.7 million
Recipients:

  • Iraqi Ministry of Electricity officials
  • Iraqi Ministry of Oil official
So who are these folks? Send us a name and a link sourcing the information.
_________

Will readers of the FCPA Blog contribute to this story? Let's see.

* * *
A Siemens / Jefferson Link? Meanwhile, a story in the Dec. 24 edition of Harper's Magazine by Ken Silverstein refers to the earlier joint ProPublica/New York Times story about Siemens, and then says: "Now ProPublica has asked for help identifying some of the alleged recipients of the bribes who are described but not named in the SEC complaint. One of those people appears to be Jennifer Atiku-Abubakar, who is tied to the scandal involving the former Louisiana congressman William Jefferson and is also a donor to the Republican Party. But I want to emphasize that I have no way of knowing whether the charges made in the complaint about her are accurate. . . . According to this Washington Post story, she is the wife of Atiku Abubakar, the very controversial former vice president of Nigeria from 1999 to 2007."
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Thursday
Dec112008

The Friday Blotter

U.S. Rep. William Jefferson (D-La.) lost an election for his Congressional seat on Saturday to Republican Anh "Joseph" Cao, who will become the first Vietnamese-American in Congress. Rep. Jefferson, 61, was indicted in June last year by a federal grand jury for violating the antibribery provisions of the Foreign Corrupt Practices Act. He's also charged with soliciting and accepting bribes, wire fraud, money laundering and obstruction of justice. He faces a maximum of 235 years in prison if convicted on all 16 counts. His trial in Alexandria, Virginia is scheduled to start early next year.

* * *
Another politician in serious trouble for alleged corruption is Illinois Governor Rod R. Blagojevich. He was arrested Tuesday on federal charges for trying to sell President-elect Barack Obama's senate seat.

* * *
So which state is more corrupt -- Louisiana or Illinois? According to the Corporate Crime Reporter's 2007 survey, it's Louisiana. Illinois ranked 6th worst but may move higher if Gov. Blagojevich is convicted. The ten most corrupt states, by the way, are Louisiana (1), Mississippi (2), Kentucky (3), Alabama (4) Ohio (5) Illinois (6), Pennsylvania (7), Florida (8), New Jersey (9) and New York (10). The survey covered the 35 most populous states, so the fifteen states with under two million people weren't included. The least corrupt states in the survey were Utah (31), Kansas (32), Minnesota (33), Iowa (34) and Oregon (35).

* * *
Strange arbitrage? According to Border's in-store book locator, Bribery Abroad is out of print. Not true. It's available from Amazon here for under $20 and can be downloaded here for about half that. Strangely, the Border's computer system offered a used copy at $69.26. The blurb said its condition is "Fine -- Carefully handled. Has no marks or blemishes on text, binding, or dust jacket. Almost new, but lacking new book crispness." Our advice: Buy new and save a bundle.

* * *
Dependable sources told us earlier this week to expect some blockbuster FCPA enforcement news. And stories out today say Siemens is close to settling with the SEC. The Associated Press quotes a Siemens supervisory board member as saying, "We're hoping on an agreement with the SEC before Christmas. If necessary, we'll meet December 23rd."

But Siemens also had some bad news this week. European Union antitrust regulators charged it with forming a price-fixing cartel among makers of power transformers. A separate AP report said Siemens, France's Areva and Swiss engineering group ABB confirmed they had received the EU charges. Public and private corruption sometimes accompany cartel activity, as illustrated by recent cases involving the makers of marine hose and orthopedic devices.

* * *
We'll be wheels up for a few days. Enjoy the weekend.

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Thursday
Nov132008

Congressman's FCPA Trial Draws Near

Rep. William J. Jefferson (D-La.) moved closer this week to becoming the first member of the United States House of Representatives to be tried for violating the Foreign Corrupt Practices Act. A unanimous three-judge panel of the Fourth Circuit Court of Appeals on Wednesday tossed out Rep. Jefferson's claims that evidence heard by a federal grand jury violated the constitution's speech or debate clause. The appeals panel agreed with U.S. District Judge T.S. (Tim) Ellis III, who said Jefferson's arguments would expand legislative immunity so much that prosecuting a congressman for a crime would become virtually impossible.

The constitution's speech or debate clause (Article I, Section 6, Clause 1) creates a limited privilege for information relating to work by legislators. It prohibits their arrest during attendance at the Congress, "and in going to and from the same, and for any Speech or Debate in either House, they shall not be questioned in any other Place." Rep. Jefferson had argued that testimony by his former staff members to the grand jury was based on his work in Congress and therefore protected. The Fourth Circuit panel, however, said references to legislative action in the testimony were incidental and not central to the indictment against him. A copy of the Fourth Circuit's opinion is available here (thanks to Greg Morin for sending it to us).

Rep. Jefferson can now ask the Fourth Circuit to hear an appeal en banc, and he can seek review by the Supreme Court. His trial was scheduled to begin in December but has been delayed. He was indicted in June last year by a federal grand jury for violating the antibribery provisions of the Foreign Corrupt Practices Act. He's also charged with soliciting and accepting bribes, wire fraud, money laundering and obstruction of justice. He faces a maximum of 235 years in prison if convicted on all 16 counts.

Rep. Jefferson, 61, has held his seat since 1991 in Louisiana's 2nd District, which includes much of New Orleans. Despite being indicted last year, he won this year's primary runoff and is favored to win re-election on Dec. 6.

Prosecutors allege that in August 2005, Rep. Jefferson hid $90,000 in the freezer at his Washington home. It was part of $100,000 provided by the government's cooperating witness and intended to be used to bribe a Nigerian official. "The cash was separated into $10,000 increments, wrapped in aluminum foil, and concealed inside various frozen food containers," according to prosecutors. The purpose of the alleged bribe was to induce the Nigerian official to steer business from Nigeria's dominant government-controlled telecommunications company to firms in which Rep. Jefferson's family members had interests.

His alleged co-conspirators were Vernon L. Jackson, a Louisville, Ky., businessman, and Brett M. Pfeffer, a former Jefferson congressional staff member. Jackson was sentenced to 87 months in prison after pleading guilty to conspiracy to commit bribery and paying bribes to a public official. Pfeffer was sentenced to 96 months in prison after pleading guilty to conspiracy to commit bribery and aiding and abetting the solicitation of bribes by a member of Congress.

Before being indicted, Rep. Jefferson had compiled an outstanding record. He was the first African-American elected to Congress from Louisiana since Reconstruction. He graduated from Southern University A&M College and Harvard Law School, and he also holds an LLM in tax from Georgetown. As a state senator, he was twice named Legislator of the Year by the Alliance for Good Government.

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Monday
Nov102008

The FCPA Goes To Court

For such a high-profile federal law, the Foreign Corrupt Practices Act doesn't make it to court much. In fact, most years go by without a single trial involving the FCPA. That's because typical defendants would rather cut a deal with prosecutors instead of risking a guilty verdict that might carry a five-year jail term. By some strange coincidence, however, there could soon be as many as three FCPA trials all happening at once. Not long ago, we'd have put the odds of seeing that at zero (which is why we don't gamble). The trials might not happen, but as of today there's a chance, at least, that some or all of them will go forward. Here's the situation:

U.S. v. Kozeny, Southern District of New York (Manhattan). The defendant is Frederic Bourke, 62, owner of the luxury handbag brand Dooney & Bourke. He was indicted in May 2005 with Victor Kozeny and David Pinkerton over an alleged plot to bribe officials from Azerbaijan. Kozeny is in the Bahamas fighting extradition and Pinkerton has been dismissed from the case, leaving Bourke to fight the FCPA charges on his own. He and the federal prosecutors are gearing up for trial. Last month Judge Shira A. Scheindlin issued an opinion and order refusing Bourke's request for a jury instruction on the FCPA's local law affirmative defense.

U.S. v. Green, Central District of California (Los Angeles). The defendants are Hollywood movie producers Gerald Green, 75, and his wife Patricia Green, 52. They were arrested in December 2007. They're accused of paying more than $1.8 million in bribes to a former governor of the Tourism Authority of Thailand in return for contracts worth more than $14 million. A superseding indictment last month added allegations that Mrs. Green filed two false tax returns in 2005 and 2006 that included deductions for "commissions" which she knew were "bribes to a foreign official for obtaining and retaining business." Their trial was first scheduled to begin in early 2008 and has been postponed a couple of times.

U.S. v. Jefferson, Eastern District of Virginia (Alexandria). The defendant is Rep. William Jefferson, 61, (D-La.), a Congressman since 1991 from a district that includes New Orleans. He was indicted in June 2007 by a federal grand jury for violating the anti-bribery provisions of the Foreign Corrupt Practices Act. He was also charged with soliciting and accepting bribes, wire fraud, money laundering and obstruction of justice. Prosecutors allege that in August 2005, Rep. Jefferson hid $90,000 in the freezer at his Washington home. It was part of $100,000 provided by the government's cooperating witness and intended to be used to bribe a Nigerian official. Rep. Jefferson had been scheduled to go on trial next month, but that's not likely to happen. He has asked the U.S. 4th Circuit Court of Appeals in Richmond, Va. to dismiss all charges except for one count of violating the FCPA and another of obstruction of justice. Last Tuesday, Rep. Jefferson won a primary runoff election in his district and is favored to win re-election on Dec. 6, according to CG Politics.

We'd like to report news from the trials if and when they begin. To do that, though, we'll need help. If anyone is willing and able to send us dispatches from time to time from the courtrooms (including news about the prelims now taking place), please drop us a note here. We can post reports with or without attribution, and we'll also take responsibility for editing. So news can be sent in raw form, of any length and frequency.

We could close now with something from a recruiting poster, like: Don't just read about FCPA history, be a part of it. Drop us a line today. And you know, that actually sounds pretty good. So consider it said.

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Monday
Jun302008

Cash In The Freezer

The strange case of the Honorable William J. Jefferson, Member of the United States House of Representatives, keeps getting stranger.

Rep. Jefferson (D-La.) -- a Congressman since 1991 from a district that includes New Orleans -- was indicted in June last year by a federal grand jury for violating the anti-bribery provisions of the Foreign Corrupt Practices Act. He was also charged with soliciting and accepting bribes, wire fraud, money laundering and obstruction of justice. He faces a maximum of 235 years in prison if convicted on all 16 counts.

Now he says that in spite of the indictment, he's running for re-election. "The fact that I am the target of an overly zealous prosecution has not prevented my delivering for our district and our state," he said last month. Jefferson, 61, becomes not only the first elected federal official to be indicted under the FCPA, but also the first person to run for Congress while facing criminal FCPA charges.

Prosecutors allege that in August 2005, Jefferson hid $90,000 in the freezer at his Washington home. It was part of $100,000 provided by the government's cooperating witness and intended to be used to bribe a Nigerian official. "The cash was separated into $10,000 increments, wrapped in aluminum foil, and concealed inside various frozen food containers," according to prosecutors. The purpose of the alleged bribe was to induce the Nigerian official to steer business from Nigeria's dominant government-controlled telecommunications company to firms in which Rep. Jefferson's family members had interests.

“The schemes charged are complex," the Department of Justice said in its news release, "but the essence of this case is simple: Mr. Jefferson corruptly traded on his good office, and on the Congress where he served as a Member of the United States House of Representatives, to enrich himself and his family through a pervasive pattern of fraud, bribery and corruption that spanned many years and two continents.”

Rep. Jefferson's alleged co-conspirators were Vernon L. Jackson, a Louisville, Ky., businessman, and Brett M. Pfeffer, a former Jefferson congressional staff member. Jackson was sentenced to 87 months in prison after pleading guilty to conspiracy to commit bribery and paying bribes to a public official. Pfeffer was sentenced to 96 months in prison after pleading guilty to conspiracy to commit bribery and aiding and abetting the solicitation of bribes by a member of Congress.

As the Department of Justice says: Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

A conviction would bring a tragic end to Rep. Jefferson's amazing career. His official bio says he's the first African-American elected to Congress from his native Louisiana since Reconstruction. He graduated from Southern University A&M College and Harvard Law School, and in February of 1996 he received his Master of Laws in Taxation from Georgetown University, "making him only the second Member of Congress to do so while serving in the U.S. House of Representatives." As a State Senator, his bio says, he was "twice named 'Legislator of the Year' by the prestigious Alliance for Good Government."

View the DOJ's June 4, 2007 news release here.

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