Prosecuting bribery in Lesotho

L.F. Maema, KC, Attorney General, Lesotho
11th International Anti-Corruption Conference, Seoul, Republic of Korea
September 5, 2003

“Lesotho is committed to completing these prosecutions, primarily in order to eradicate corruption in Lesotho. But also to set an example for other countries.” – L. F. Maema, KC, the Attorney General of Lesotho.

11th International Anti-Corruption Conference, Seoul, Republic of Korea, 25-28 May, 2003

1.    The Lesotho Highlands Water Project is the product of a treaty between South Africa and Lesotho concluded in 1986. It is one of the biggest water projects in the world. Water is dammed in the Lesotho mountains for the purpose on the one hand of supplying water to the South African Industrial heartland and on the other providing hydro-power for Lesotho.

2.    An audit by the accountants Ernst and Young in the early 1990’s uncovered irregularities in the Lesotho Highlands Development Authority (the “LHDA”), the parastatal charged with administering the project, and more particularly its Chief Executive, Mr. M.E. Sole. This in turn led to disciplinary hearings against Mr. Sole and, after his dismissal, civil proceedings against him. During these latter proceedings bank records were discovered in Lesotho and South Africa which in turn pointed to Mr. Sole having bank records in Switzerland. The help of the prosecuting authorities in Lesotho were called in who in turn sought the assistance of the Swiss Office for Police Matters. This then led to the discovery of Swiss bank records by Mr. Sole, which in turn led to other bank accounts from which Mr. Sole was paid.

3.    The picture that then emerged was of corruption quite unprecedented in the history not only of Lesotho but also of Southern Africa. Over a number of years and in fact since shortly after the inception of this project overseas contractors and consultants had been paying enormous amounts of money to Mr. Sole through intermediaries in Switzerland. These payments coincided with these contractors/consultants seeking contracts on the water project. The contractors/consultants include those engaged on all the major phases of the water project, including the building of the Katse Dam, the transfer tunnels taking the water to South Africa, the hydro-power station, and so on.

4.    Prosecution then followed of everyone involved. These commenced in December 1999 and the prosecuting authorities in Lesotho were faced with a barrage of lawyers not seen before (or since) in the High Court of Lesotho. Every legal stratagem was employed on behalf of the contractors/consultants, as well as Mr. Sole, to derail these prosecutions.

5.    In two respects the contractors/consultants were successful. They firstly got the court to hold that consortia as such, as opposed to their individual members, could not be held criminally responsible, despite procedural legislation in place which allowed it. Secondly, the defense lawyers persuaded the court to order a separation of trials. With the result the prosecuting authorities are now dealing with each role player in this whole saga separately. For the rest the prosecution has been successful in the various matters that were argues before the High Court as a prelude to the actual trials.

6.    The first prosecution was against the recipient of the bribes, Mr. M.E. Sole. This trial was concluded last year with Mr. Sole being convicted on a number of counts of bribery and sentenced to an effective 18 years imprisonment. He appealed against his convictions and sentence and the Lesotho Court of Appeal in April this year confirmed the convictions but reduced the sentence from 18 years to 15 years imprisonment.

7.    The second case involves the international engineering consultancy from Canada, Acres International. This case has also been completed with Acres being convicted of bribing Mr. Sole and sentenced to a fine of some 23 million Maloti (the local Lesotho currency), about US$3 million. This matter is now on appeal and the appeal is due to be heard in August this year.

8.    The third case which is currently pending is that against the German engineering consultancy, Lahmeyer International. The evidence in this case has been completed and judgment is expected next month.

9.    At present the trial involving one of the intermediaries, a Mr. Du Plooy from South Africa, is underway.

10.    The next trial will involved Spie Batignolles of France, the lead company of the consortium which built the transfer tunnels and the hydropower plant. Other prosecutions envisaged thereafter include the contractors involved in the construction of the Katse Dam, as well as others.

11.    The prosecuting authorities in Lesotho have learnt a lot from these cases. Here I will confine myself to the following.

12.    Bribery can be successfully prosecuted. International bribery is very difficult to detect. What precisely is agreed between briber and bribee is only known to the parties involved. It is in the interest of both parties not to have their conduct known. The injured parties, the state and the public at large, would not normally get to know of it. Having said all this, however, where bribery is actually discovered, prosecuting it is not that difficult, that is once the prosecution gets past the various legal hurdles placed in its way. On the one hand you have a contractor seeking a contract and on the other hand a state official who is in a position to exercise his influence in the award of this contract. There is no relationship between them other than this fact. If money then passes between them, particularly in suspicious circumstances such as through Swiss banks, then, in the absence of some or other convincing explanation, the only inference to be drawn is that this money constitutes a bribe. In law we would call this compelling circumstantial evidence. To everyone else, it would simply amount to common sense.

13.    Where does bribery start? Bribery involves two parties, the briber and the bribee. In a given situation it is normally difficult to establish who initiated the corrupt transaction. There seems to be a perception in the first world that in the context of construction contract in the third world the initiative comes from the bribe taker rather than the bribe giver. In the African context this has been described as “the Africa problem”. This has however not been the evidence in the present prosecutions in Lesotho. The evidence has shown that Mr. Sole’s first Swiss accounts were opened for him by the intermediary acting on behalf of French contractors. What then followed was contractors entering into so called “representative agreements” with intermediaries in terms of which these intermediaries would perform certain “services” for them in Lesotho. Once these agreements were in place funds were then transferred to the intermediaries who in turn transferred the funds to Mr. Sole. What the evidence has shown is that these agreements were nothing more than bribe agreements. It was only once these agreements were in place that the funds were paid to the intermediary who in turn transferred the funds to Mr. Sole. Quite clearly then the initiative came from the briber and not the bribee.

14.    Those involved in bribery tend to stick together. The purpose of these prosecutions has not only been to get convictions. The objective has also been to get to the bottom of this problem and to seek to prevent it from recurring. To this end overtures have been made to various of the persons or entities involved to rather co-operate with the prosecuting authorities, in return for possible exemption from prosecution. All this has fallen on deaf ears. Even Mr. Sole, no languishing in jail, has chosen to keep silent. At the time when all the accused were still together there also seemed to be a clear conflict on interests between them. Despite this they presented a unified front. What precisely it is that make persons involved in the shadowy world of bribery to stick together is not clear. Perhaps it is a form of honour among thieves. The more likely explanation would seem to be that once one gets involved in bribery particularly of the scale one is not at liberty to simply look after one’s own interests when things go wrong.

15.    International co-operation in combating bribery. Bribery of this nature transcends the borders of a particular country. Outside help is then invariably required, particularly for a small country such as Lesotho. Here Lesotho had the assistance of South African legal and accounting expertise. It also had enormous assistance from the Swiss authorities. Assistance was also forthcoming from international organizations such as the World Bank. All such assistance however stopped short of financial help.

16.    When you prosecute international bribery you are on your own. Various offers of financial assistance have been made to Lesotho. To date none has been forthcoming. Here mention is made of a meeting held on 17 November 1999 in Pretoria, South Africa. This meeting was called as a result of this bribery scandal breaking in Lesotho and the declaration by the Lesotho Government to prosecute those involved. This meeting was called by the World Bank and was attended by representatives of various role players concerned with the Highlands Water Project, including representatives from South Africa, Britain, the European Union, the European Investment Bank, individual banks in Europe and so on. At this meeting the actions of the Lesotho Government were praised. More importantly, from various quarters, promises were made of assistance in these prosecutions. This was after the representatives from Lesotho had pointed out to those present that these prosecutions would constitute a considerable drain on Lesotho’s financial resources. Unfortunately none of this help has been forthcoming.

17.    The way forward. Lesotho is committed to completing these prosecutions, primarily in order to eradicate corruption in Lesotho. But also to set an example for other countries. Here the hope is expressed that other countries will realize that corruption can be combated successfully, provided the necessary will is there and also that the countries involved give each other the necessary support.

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