Mabey & Johnson - Corrupt firm's work found to be defective
By guardian.co.uk
Politics | Sat, 10 Oct 2009

Rob Evans and David Leigh
A British company that corruptly acquired multimillion-pound commercial deals in Africa delivered faulty and negligent work in those contracts, it can be disclosed.

Mabey & Johnson, a bridge-building firm, is the first major British company to be prosecuted for paying backhanders abroad. The Reading-based company, owned by one of Britain's richest families, has admitted paying bribes to win contracts in Ghana, Jamaica and Iraq.

However, it has now emerged that the bridges it had been paid to build in Ghana were defective. According to a high court judgment, the firm had to spend more than 2m rebuilding and repairing the bridges. The weakened bridges contained a variety of design faults after Mabey staff had made simple engineering miscalculations.

Today, Mabey & Johnson pleaded guilty to corruption offences in the three countries at Southwark crown court in London. The company, which has donated to the Conservative party, will learn of its punishment on 25 September.

The prosecution by the Serious Fraud Office has been trumpeted by the British government, which has been under pressure to bring more corrupt exporters to book. Critics say Britain's performance has been lamentable since it promised in 1997 to stamp out the payment of bribes by British companies to foreign ministers and civil servants.

Mabey & Johnson has admitted conspiring to give corrupt payments to so far unnamed politicians and officials in Ghana in the 1990s when it was awarded contracts from the impoverished West African country worth 22m to construct nine bridges in rural areas.

But after Mabey started work there its managers found that one of its bridges with the same design became unstable and partially collapsed in Ethiopia in 1996. The managers feared that its bridges in Ghana might also fall down. Three bridges were rebuilt and five others repaired. A dispute with their insurers over who should foot the bill for the repair work was heard in the high court in London in 2003. The judge ruled that the engineering miscalculations were 'fairly basic' and 'negligent'.

A Mabey spokesman said : 'As a sign of good faith, and as soon as it became aware of the issue, the company took action at its own expense to remedy the problem in situ with a total of eight bridges. As a result of these events we stopped supplying this type of bridge.'

Mabey received financial support for the contracts from the British government. The company says it builds 'quick, simple, reliable' bridges in 115 countries.

The SFO has also examined corruption allegations involving Mabey & Johnson in the Philippines, Papua New Guinea, Panama and the Dominican Republic in the last five years, later dropping its inquiries. Mabey & Johnson admitted making corrupt payments of 360,000 to Saddam Hussein's regime in 2001-2.

In Jamaica, a politician, Joseph Hibbert, resigned from the government last month saying he had been 'implicated' in the bribery and wanted to clear his name.

Source: guardian.co.uk

British firm Mabey and Johnson convicted of bribing foreign politicians

BAE the next target as bridge-building firm becomes first major UK company to be convicted of foreign bribery

* Buzz up!
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* David Leigh and Rob Evans
* guardian.co.uk, Friday 25 September 2009 17.50 BST
* Article history

A string of foreign politicians and officials were named as having received corrupt payments from a British firm today, as the company admitted it had systematically paid bribes around the world to win contracts.

The bridge-building firm, Mabey and Johnson, is the first major British company to be convicted of foreign bribery. Many of its contracts were financially supported by the British taxpayer.

The conviction by the Serious Fraud Office comes as the fraud agency turns its attention to a bigger target, BAE, Britain's biggest arms firm.

The SFO has given BAE until Wednesday to decide whether to bow to an ultimatum and agree to some version of a plea bargain over long-running corruption allegations.

Richard Alderman, the agency's director, has put his credibility on the line, and, according to Whitehall sources, is committed to asking law officers for consent to prosecute the arms giant if it fails to accept multimillion-pound penalties.

Today, at Southwark crown court, London, John Hardy QC for the SFO, revealed the names of 12 individuals in six countries alleged to have received bribes from the Reading-based Mabey and Johnson.

He said the company paid 'a wide-ranging series of bribes' totalling 470,000 to politicians and officials in Ghana.

He identified five who travelled to Britain to collect sums of money from 10,000 to 55,000 from bank accounts in London and Watford.

Ministers and officials in Angola, Madagascar, Mozambique, Bangladesh, and Jamaica were also bribed, Hardy told the court.

Hardy said that over eight years, the firm gave 100,000 'to buy the favours' of Joseph Hibbert, a key Jamaican official in awarding contracts, one of them worth 14m.

The court was told how the firm, owned by one of Britain's richest families, paid bribes totalling 1m to foreign politicians and officials to get export orders valued at 60m to 70m through covert middlemen.

The Mabey family built up a fortune of more than 200m by selling steel bridges internationally.

The company also broke UN sanctions by illegally paying 363,000 to Saddam Hussein's government from 2001 2002.

This first conviction has been hailed as a landmark by the British government, which has been heavily criticised for failing to prosecute any UK firm for foreign bribery. Campaigners said the failure rendered the 1997 pledge to crack down on corrupt exporters worthless.

The firm will pay out more than 6.5m, including fines and reparations to foreign governments.

It pleaded guilty to corruption in a pioneering deal with the SFO. It is the first time the agency has concluded a US-style plea bargain with a firm accused of corruption overseas.

The company said it had reformed itself, stopped making corrupt payments, and got rid of five executives. Timothy Langdale, the firm's QC, said: 'This is a new company. It is not the one which made these payments.'

The SFO investigation continues to look into whether individuals should be prosecuted.
Overseas politicians and officials named as recipients of bribes from Mabey and Johnson

Ghana

Ato Qarshie (former roads minister) 55,000

Saddique Bonniface (minister of works) 25,500

Amadu Seidu (former deputy roads minister) 10,000

Edward Lord-Attivor (chairman inter-city transport corp) 10,000

Dr George Sepah-Yankey (health minister) 15,000

Madagascar

Zina Andrianarivelo-Razafy (permanent representative at the UN) $5,000

Lt-Col Jean Tsaranasy (former public works minister) 33,000

Jamaica

Joseph Uriah Hibbert (former works minister) 100,0000

Angola

Antonio Gois (former general manager state bridges agency) $1.2 m

Joao Fucungo (former director state bridges agency) $13,000

Mozambique

Carlos Fragoso (former head of DNEP, directorate of roads and bridges) 286,000

Bangladesh

Khandaker Rahman (chief engineer, roads & highways dept)

British bridge-building firm Mabey & Johnson is suing five insurance companies in a wrangle over who should foot the bill for repairs to 49 bridges built in developing countries during the early 1990s.

After the collapse of a bridge over the river Omo in south-west Ethiopia seven years ago, in September 1996, Mabey & Johnson had been concerned about problems that might occur with bridges it had built in Peru, the Dominican Republic and Ghana between 1992 and 1995.

The writ states: 'Mabey & Johnson also realised that other bridges it had supplied might collapse, leading to other claims from customers.'

Richard Glover, the commercial director of Mabey & Johnson, said the bridge collapse in Ethiopia was caused by a design fault for which the company accepted responsibility.

Read more: http://www.building.co.uk/story.asp?storycode=1030883

Mabey & Johnson agrees corruption plea bargain with Serious Fraud Office

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* David Leigh
* guardian.co.uk, Wednesday 8 July 2009 23.12 BST
* Article history

Bridge-builders Mabey & Johnson, the firm owned by one of Britain's wealthiest families, which has been under prolonged investigation by the Serious Fraud Office, is to plead guilty to bribery offences and breaching UN sanctions.

The firm is expected to appear at Westminster magistrates court on Friday in a ground-breaking SFO prosecution, according to sources close to the firm's lawyers.

A substantial fine is expected, following lengthy confidential negotiations with the auhtorities and a pioneering deal. This is the first time the SFO has successfully negotiated the equivalent of a US plea-bargain with a firm accused of overseas corruption.

The corruption charges relate to contracts obtained by the company in Jamaica and Ghana. The sanctions charges relate to accusations in the UN Volcker report that Mabey paid a $200,000 kickback to the Saddam regime in Iraq between 2001 and 2003 in return for a $3.6m bridge contract.

Questions about Mabey's behaviour were first raised by the Guardian in 2005, when the paper revealed large commission payments made for bridge contracts in the Philippines. Loans were backed by the British taxpayer's official export agency, the ECGD.

The firm were also accused by campaigners of making payments to the ruling party in Papua New Guinea.

Neither of those allegations led to criminal charges. But, following a dispute with a former Mabey executive, detailed evidence subsequently emerged in a civil case of improper commission payments being made in Jamaica.

During the trial that ensued in UK, the firm in question had allegedly admitted conspiring to obtain contracts by bribing and influencing Ghanian politicians.

Mabey and Johnson had bribed a top politician in this country into obtaining the contract for building the seven flyovers with three already completed in Peliyagoda, Nugegoda and Dehiwela - and another one to come up in Battaramulla shortly.