BEC bribe scandal firm wrote to Prime Minister Hubert Ingraham

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April 21, 2016

A JURY heard yesterday that a French company was determined enough to outbid its Korean rival in obtaining a multi-million dollar project from the Bahamas Electricity Corporation that it attempted to make contact with then Prime Minister Hubert Ingraham and then Deputy Prime Minister Frank Watson.

The company wanted officials to reconsider the bid it knew was going to be rejected.

American Mark Smith was continuing his testimony that began on Tuesday concerning his role in an Alstom SA/BEC bribery scheme to win the New Providence Expansion Phase Three contract with BEC.

Smith testified that Alstom SA wrote to BEC executives, querying about the integrity of the evaluation process and a reconsideration of their proposal.

A response had been given by Patrick Hanna, BEC’s assistant general manager in December 2000, that the company’s communications were not only inappropriate but were also in breach of the terms of the bidding process where they risked their bid being rejected outright.

Smith has received immunity from the prosecution notwithstanding his admission that he accepted a cut of hundreds of thousands of dollars to relay to Alstom SA information gathered by an insider to the tendering process that would bolster the French firm’s chances at winning the contract bid over it’s Korean rival, Hanjung.

Smith alleges that 79-year-old Freddie Solomon Ramsey struck a deal that allowed him to receive a third of some $600,000 as a paid informant for a French company.

Crown prosecutor Garvin Gaskin referred the witness – and the jury – to documents that concerned letters from Alstom to the then prime minister, deputy prime minister and BEC executives in December 2000.

The letter to Mr. Ingraham made mention of Alstom SA’s gratitude for its bid being in contention for the project. However, the company also expressed reservation about the evaluation process given that its bid met international standards that their consultants were satisfied with.

The letter further noted that the Inter-American Development Bank’s (IDB) opinion had been sought on the matter and urged that their proposal was more convincing than Hanjung’s, which was not likely to meet the 18-month deadline for completing the project.

Similar sentiments were expressed in the letter to Mr. Watson where Alstom SA asked for a reconsideration of its bid before a decision was made.

The French company then sent another letter, via facsimile, addressed directly to BEC’s assistant general manager, Mr. Hanna, noting that it had received information from “various sources” that Hanjung was “openly alleging being awarded the contract.”

“Please reconsider the advantages of our offer,” the company wrote.

Alstom SA reasoned that if the contract was awarded to Hanjung, there would be a construction delay for the project and maintenance risk from a company that required the International Monetary Fund to salvage it from ruin a few years earlier.

The French company feared that Hanjung may have been influencing the bidding process and in its letter, indicated that an IDB representative in The Bahamas was sent a copy of the same concerning Alstom SA’s reservations.

The jury also saw a letter Alstom SA received from Mr. Hanna who took issue with the French company’s attempt to discredit another bidder or the evaluation process and noted that the letters “are in direct contravention of the tender process.”

“BEC on the grounds alone would be justified to reject the tender,” Mr. Hanna wrote to Alstom SA. “We trust there will be no further communications of this nature.”

“Did you attend any board meetings at BEC?” Mr. Gaskin asked the witness. Smith said no.

The jury saw subsequent correspondence noting that Alstom SA had ultimately lost the bid to Hanjung but they were not overly concerned, given Hanjung’s unattainable summer 2002 deadline and the upcoming general election prior to that.

Alstom SA, in communication with Smith, considered bringing the opposition party, which was the Progressive Liberal Party, into their plan to inevitably get the project. However, Ramsey allegedly said not to pursue that route.

Ramsey, based on exchanges with Smith and Alstom, reportedly met with Mr. Watson following the BEC board’s unanimous decision awarding the contract to Hanjung, expressing concerns of impropriety on the Korean company’s part.

The awarding of the contract was suspended pending an investigation into the concern expressed by Ramsey.

In March 2001, Alstom SA was awarded the contract for the phase three project.

Ramsey is currently on trial before Justice Bernard Turner on four counts of conspiracy to commit bribery and 14 counts of bribery allegedly committed between 1999 and 2003. He pleaded not guilty to all charges read to him prior to the start of trial on Tuesday.

The allegations are related to a widespread scheme involving tens of millions of dollars in bribes to countries around the world. They were brought to light in 2014 in a US Department of Justice report which said that Alstom SA [formerly ABB] allegedly paid more than $300,000 to a BEC board member to influence contracts between 1999 and 2003.

Ramsey is on $40,000 bail and is defended by attorneys Wayne Munroe, QC, Tommel Roker and Bridgette Ward.

Garvin Gaskin, acting director of public prosecutions, is prosecuting the case with the assistance of Cordell Frazier.

Mr. Munroe, in cross-examination of Mr. Smith, asked the witness when he had met his client. Smith said he could not recall exactly.

“You say you opened your business in 1988? Was it a decade before that you met Mr. Ramsey?” the lawyer asked.

Smith said it was somewhere between 1993 and 1995 and said he’d introduced Ramsey to his father Ted Smith within six months of their meeting through a business acquaintance.

Mr. Munroe suggested to Smith that he met Ramsey through his father and not the other way around, as he wants the jury to believe. The witness said no.

“You’re meeting with Mr. Ramsey was a meet and greet, nothing long?” the lawyer asked. Smith said yes.

“So you introduced somebody you met for a short term to your father?”

Smith said yes.

Mr. Munroe asked the witness if the Smiths had an interest in Ramsey’s company, Caribbean Supplies Bahamas Ltd. (CBSL).

“My father expressed interest in CSBL at the time to be owners, yes,” the jury heard.

The witness was then asked if his Florida based company, M. Smith Inc. replaced his father’s Burnside International following the latter’s passing. The witness again said yes.

“When working for your father, how often would you meet Mr. Ramsey?” Mr. Munroe asked.

“Periodically two or three times a year,” Smith said.

“Did Mr. Ramsey introduce you to people?” Mr. Munroe asked. Smith said Ramsey shook hands with a lot of individuals whose names he could not recall.

“You knew he had the support of the Free National Movement and when someone of government came, he’d introduce you,” the lawyer suggested.

Smith said he couldn’t really tell the difference between the people he may have been introduced to.

“It’s been such a while, truthfully, I don’t remember him pointing out who was minister and who was not,” the witness said.

“When exactly did the $600,000 get paid and split?” the lawyer probed.

“Prior to my dad passing in May 1999, it was in 1999, just prior to that,” Smith said.

“Can you show it in the bank records?” Ramsey’s lawyer further probed. Smith said no.

“You’d have to talk to my attorneys, it wasn’t requested,” the jury then heard from the witness.

Smith then agreed to a subsequent suggestion that there were allegations of bribery made against him by the U.S. Department of Justice concerning the ABB Generacion/Alstom SA scandal.

However, Smith said he was never physically arrested nor were any documents physically taken from him.

“They relied on you and your lawyers to produce documents then?” Mr. Munroe asked. Smith said yes.

“So you had your records and they trusted you to bring the records?” the lawyer asked. Smith said this was “correct.”

“Did you produce back up invoices to support the reconciliation statements?” Mr. Munroe asked.

“They weren’t requested,” Smith said.

“Did you produce any proof of payments [from Alstom] to you?” Mr. Munroe asked. Smith said no.

“You would agree the reconciliation was relevant to the payment of the bribe to the DA-11 [project]?” Mr. Munroe further probed.

Smith said this was also correct.

“But you never produced records to support it? It should have been obvious to you,” Mr. Munroe said.

“It wasn’t obvious to me it’s just what we did. The subpoena was all I had in the physical records. I didn’t produce it because I didn’t have to produce it,” the witness said.

“Which is it?” Mr. Munroe asked.

“It’s a combination of both. I didn’t realise I needed it and I didn’t have it,” the witness said.

“So you would agree we’re stuck with believing you?” Mr. Munroe asked.

“That is correct,” Smith said.

The trial resumes today at 10am.

By Lamech Johnson

Tribune Staff Reporter

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News date : 04/21/2016    Category : Business, Court, Tribune Stories

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