Protecting the cookie jar

Mon, Jan 5th 2015, 12:11 AM

Fresh off separate corruption reviews by the Organization of American States and the United Nations, The Bahamas is being featured prominently in a plea agreement whereby a French power company has agreed to pay $772 million to resolve allegations it bribed high-ranking government officials for lucrative projects.
Alstom SA, the company in question, details how it bribed an official connected with the Bahamas Electricity Corporation to win contracts.
The events detailed by court documents took place between 1999 and 2001.
The details of the plea agreement have already been widely reported: Alstom retained Consultant I, who as certain Alstom employees knew, was a close personal friend of Official 8, a board member of BEC.
Consultant I's primary purpose was not to provide legitimate consulting services to Alstom and its subsidiaries, but was instead to pay bribes to Official 8 who had the ability to influence the award of the power contracts.
Consultant I was a U.S. citizen, was based in the United States, and maintained a bank account in the United States.
Alstom and its subsidiaries were ultimately awarded power projects by BEC.
Alstom made payments to Consultant I for the purpose of paying Official 8 in exchange for his assistance in awarding the projects to Alstom and its subsidiaries.
These payments were falsely recorded in Alstom's books and records as consultancy fees and commissions despite the fact that a number of Alstom executives knew these payments were bribes.
The names of the consultant and Official 8 were not revealed in the plea agreement.
But it says Official 8 was "appointed to oversee the opening of the tender by the chairman of the board".
The plea agreement also states that in total, Alstom paid Consultant I approximately $650,000 in six installments, and Consultant I, in turn, issued six checks to Official 8 for roughly half of that amount in exchange for Official 8's assistance in securing power projects for Alstom and its subsidiaries.
The implications of what allegedly transpired in the award of power contracts are many.
National Review understands that BEC's audit this year is likely to reflect the recent bribery disclosures.
Sources have indicated that local auditors may have already notified their head office for guidance.
The plea agreement has reflected an indirect cost for the generation of power.
"They would have gotten the money back from some place," noted one source, referring to the company that paid the bribes.

Shadow
The stunning revelations contained in U.S. court documents have pushed the issue of corruption in government into the spotlight.
They have also cast a shadow over the reputation of The Bahamas.
Deputy Prime Minister Philip Brave Davis told National Review, "It's an interesting revelation that we have specifics of corruption in respect to the Ingraham administration.
"There is always this general view that the PLP is corrupt, but when you ask for specifics I think you'd be hard pressed to point specifically to any official or instance where the PLP is corrupt.
"That doesn't mean the FNM is corrupt. People are corrupt. People who are a part of an organization are corrupt, but then you start painting people with the same brush, which has always been the mantra of the FNM and the press."
The Bahamas government is awaiting word from U.S. authorities on whether they will turn over information they have on this case.
The attorney general has requested the information under various information sharing treaties.
It is unclear at this point whether any prosecution would follow.
Davis said, "I would be disappointed if nothing comes out of it, because to allow a multinational company like Alstom to come and to corrupt our officials, to allow them to get away would be egregious.
"We need to engage our multinational arrangements to get the evidence and make a decision about whether to prosecute."
But Davis noted all of the evidence would have to be available for a prosecution to take place.
Asked whether he was surprised to hear of the allegations, Davis said, "From my point of view the strange behavior of the [Ingraham] administration, the bravado and the constant expressions of honesty, if you are honest you don't have to say it; you just demonstrate it."
Former Prime Minister Hubert Ingraham has said the matter should be turned over to the police.
Indeed, for various reasons it is important for the government to be committed to getting to the bottom of the bribery issue.

Commitment
Prime Minister Perry Christie has repeatedly expressed a commitment to dealing with any form of corruption.
Speaking at an anti-corruption forum in the Cayman Islands last March, Christie noted that, "Although corruption is a menace for developed and developing countries alike, it is particularly relevant for small island developing states where corruption is not infrequently linked with national development. However that may be, there is no denying that systemic corruption -- whether it be high-level political corruption, lack of financial transparency, or petty bribery among public officials and law enforcement personnel -- undermines good governance and the rule of law; accelerates moral decay; fosters negative international perceptions of the country; stymies foreign investment; impedes the delivery of public services; exacerbates poverty; and, in the final analysis, retards social and economic development."
In terms of international perceptions on corruption, The Bahamas is performing well.
In Transparency International's 2013 Corruption Perception Index, The Bahamas is ranked 22nd on a list of the 177 countries that were evaluated, with a score of 71 (out of 100).
This puts The Bahamas just two points behind the United States of America, and second only to Barbados in the Caribbean region (which ranks number 15 with a score of 75).
Christie noted that in the years in which The Bahamas has been ranked by Transparency International, it has been consistently ranked in the 70 percentile -- ranking 7.3 in 2010 (when the measurements were still on the 10-point scale) and 71 for both 2012 and 2013.
Noting that The Bahamas underwent a great deal of national introspection and soul searching in the wake of powerful suggestions that came out of the 1984 Commission of Inquiry into drug trafficking, Christie said The Bahamas of that yesteryear is a far cry from what exists now.
He said, "You should not be afraid to learn from past mistakes, nor should you be afraid to radiate issues of public corruption through formal investigative mechanisms such as commissions of inquiry of the kind to which I referred earlier.
"The lessons learned from such painful but oft-times necessary experiences can be invaluable not only for governments, but for the society as a whole."
Indeed, The Bahamas has been successful in restoring its reputation. The government remains duty bound to fight against any reputational stains that might arise.
The Alstom matter poses such a threat.
Despite our nation's high-ranking on international anti-corruption scales, there is a widespread perception on the ground that corruption is pervasive in government.
Although no former PLP administration official was prosecuted under the Ingraham administration, Hubert Ingraham continuously built campaign themes around PLP corruption.
His famous hands in the cookie jar expression comes to mind as we discuss the Alstom affair.
Former Deputy Prime Minister Frank Watson, who was responsible for utilities during the award of contracts to Alstom, said he supports the government probing the issue.
Many concerned Bahamians want to know who corruptly benefited from those awards of BEC contracts under the Ingraham administration.

Transparency
But will anything come of this?
While there is the perception of widespread government corruption, there is also the perception that we might never learn crucial details.
In a statement yesterday, Democratic National Alliance (DNA) Leader Branville McCartney predicted as much.
"I can almost guarantee you that when this government determines who is the betrayer, they would let this incident slide under the carpet," he said.
"They will not do anything about it because they cover each other. I remember being in the House of Assembly when the former prime minister alluded to the fact that he was going to 'expose' the PLP for their cronyism and corrupt practices.
"The response on the other side was, 'if you do, I know where the bodies are buried'. Indeed, nothing happened."
This case presents an important opportunity for the current administration to demonstrate that it is serious about fostering an environment where corruption is abhorred and rejected.
A culture of corruption, if it indeed exists, must not be aided by a culture of acceptance.
As noted by J. Barrie Farrington, who was chairman of the BEC board when these events transpired, "Only through a full and thorough investigation into this matter will we reach a definite outcome."
Farrington told National Review, "The overarching message will be that corruption and wrongdoing will not be tolerated. It is vital that we raise the bar with respect to our dealings with government; in fact, across all sectors.
"Unfortunately, we have not seen examples of best conduct within government. Getting to a fully transparent result will be an important step in establishing the highest benchmarks possible with respect to the conduct within the country."

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