Louis Berger International Inc, a New-Jersey-based construction management company that won contracts here, will pay a US$17.1 million criminal fine to resolve charges that it bribed officials to win government contracts abroad, the US Justice Department said on Friday, according to Reuters.
Two former executives also pleaded guilty to charges brought under the Foreign and Corrupt Practices Act, the department said.
According to prosecutors, the company and its employees bribed officials in India, Indonesia, Viet-nam and Kuwait between 1998 and 2010 to obtain government construction management contracts.
Reuters said that about US$3.9 million in bribes were paid to foreign officials, according to prosecutors, including by the two former executives Richard Hirsch, 61, and James McClung, 59.
Hirsch was Louis Berger’s senior vice president for Indonesia, Thailand, the Philippines and Vietnam. McClung was a senior vice president in India and Vietnam.
The illegal payments were disguised as “commitment fees,” “counterpart per diems,” and third-party vendor payments, the Justice Department said, according to Reuters.
Louis Berger said in a statement that the three-year deferred prosecution agreement resulted from its own self-reporting to the Justice Department since 2010, the year the company agreed to pay more than US$69 million to the US government to settle charges for overbilling between 2001 and 2007.
“Today’s settlement is the critical final milestone in our reform, as it was important for us to take responsibility for the historic actions of former managers and close the chapter on the company’s pre-2010 era,” Louis Berger Chairman Nicholas J Masucci said in a statement.
The company added, Reuters said, that since 2010, it improved its internal controls, policies and procedures and that a government-appointed compliance monitor would test and report on them over the next three years.
Louis Berger operates in more than 50 countries and has about 6,000 employees, according to its website.
In January 2007, Louis Berger came under fire in Parliament from People’s National Congress Reform One Guyana (PNCR-1G) back-bencher James McAllister who had submitted a motion to Parlia-ment calling on the Government to review its decision to build a floating bridge in Berbice between D’Edward Village and Crab Island and hold off on construction for three months.
McAllister, then Deputy Chairman of the Economic Services Committee, said that Patricio Millan Development Consultants Inc conducted a review of the feasibility study that the Louis Berger Group did and provided the details to the Inter-American Deve-lopment Bank and the Government of Guyana. He said that it was then posited that Louis Berger “grossly underestimated” the cost of construction and maintenance of the steel floating bridge and that a fixed concrete pre-stressed bridge between the locations of Providence and Augsburg is the only economically viable alternative.
The Louis Berger Group study guided the Govern-ment in the current location of the bridge. The motion reminded that the Government had previously signed a Memorandum of Understanding with Ballast Nedam Inter-national for the construction of a fixed pre-stressed concrete bridge designed to carry live loads in excess of AASHTO HS25. The Notice Paper said that the MOU between Ballast Nedam and the Govern-ment of Guyana was abandoned and a new one signed between the latter and BBCI.
The BBCI subsequently presented a cheque for US$5.4 million to the successful bidder – the consortium of Bosch Rexroth BV of the Netherlands and Mabey & Johnson of the United Kingdom. This sum represented the first tranche of payment for the design and construction of the bridge. This event followed the full financial closure of the US$40M committed to the project.
Louis Berger’s website said that its presence in Latin America and the Caribbean began in the 1960s with projects in Brazil, the Dominican Republic, Nicaragua, Honduras, Guyana and Argentina. Since then the firm has executed more than 1,000 projects and has worked in all of the independent nations in the region, with the exception of Suriname.
Ironically, another firm which participated in the construction of the Berbice Bridge also ended up being charged with corruption.
UK firm Mabey & Johnson was in 2009 accused of breaching United Nations sanctions and became the first company to be prosecuted by Britain for overseas corruption, the Serious Fraud Office (SFO) said.
Mabey & Johnson was charged over a voluntary disclosure to the SFO that the company had tried to influence decision-makers for contracts in Jamaica and Ghana between 1993 and 2001. Mabey & Johnson served as the co-contractor for the Berbice River Bridge.
Reuters said the company was charged over applications for contracts under the Iraq oil-for-food programme in 2001/02 in breach of UN sanctions.
Five of the company’s eight directors stepped down in early 2008 after the company approached the SFO to say it might have engaged in corrupt practices and a new management team was install-ed, Reuters had reported.
“We deeply regret the past conduct of our company, and we have committed to making a fresh start, wiping the slate clean of these offences,” the firm’s new Managing Director Peter Lloyd had said in a statement.
Anti-corruption advocates here had argued that under the former PPP/C there was little transparency in contract awards. They had argued that these were the conditions under which bribes are usually paid.
