Former senior Bechtel exec took $5 million in kickbacks
Friday, December 5, 2014 at 9:52AM
Richard L. Cassin in Asem Elgawhary, Bechtel, Cyprus, Egypt, Germany, Italy, Leslie R. Caldwell, Saudi Arabia, Switzerland, mail fraud, money laundering, obsruction

A former top executive of Bechtel Corporation pleaded guilty Thursday for taking $5.2 million in kickbacks to rig bids for state-run power contracts in Egypt.

Asem Elgawhary, 73, of Potomac, Maryland, entered his plea in federal court in Maryland to mail fraud, conspiracy to commit money laundering, and obstruction and interference with the administration of the tax laws. 

His sentencing is scheduled for March 23, 2015.

Elgawhary, a dual U.S. and Egyptian citizen, was arrested in November 2013 when he flew into the United States. He was indicted in February this year.  

He was the principal vice president of San Francisco-based Bechtel Corporation. Privately-held Bechtel provides engineering, construction, and project management services.

From 1996 to 2011, Elgawhary was also the general manager of Power Generation Engineering and Services Company (PGESCo), a joint venture between Bechtel and Egypt’s state-owned and controlled electricity company (EEHC). 

PGESCo helped EEHC pick subcontractors by soliciting bids and awarding contracts for power projects.

Elgawhary took a total of $5.2 million from three power companies. In exchange, he gave them "a competitive and unfair advantage in the bidding process," the DOJ said. The DOJ didn't identify the three power companies.

Elgawhary tried to hide the kickbacks by routing the payments through accounts he controlled in off-shore and Swiss banks.

While he was taking kickbacks, he sent “Representation Letters” to Bechtel and the PGESCo board in Maryland. The letters "falsely [certified] that he had no knowledge of any fraud or suspected fraud at PGESCo, and that there were no violations or possible violations of law or regulations that should have been considered for disclosure in PGESCo’s financial statements," the DOJ said. 

Elgawhary also lied to Bechtel's lawyers when they interviewed him in April 2011.

He claimed to the IRS that he kept only one foreign bank account, and he failed to report any of the kickbacks as income for the tax years 2008 through 2011.

Leslie Caldwell, chief of the DOJ's criminal division, said: “Foreign corruption is an international scourge, and we will pursue those who take bribes, whether they are government officials or high-ranking corporate executives, like Elgawhary.”

"Our economy is so global in this day and age that if we allowed corrupt practices overseas such as taking bribes in exchange for special consideration when comparing bids, it would seriously impact our international trade," Caldwell said.

The DOJ said the FBI and IRS received "significant assistance . . . from law enforcement counterparts in Switzerland, Germany, Italy, Saudi Arabia, and Cyprus." 

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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