Israel Rafalovich, UN Observer
October 10, 2006

Three European multinationals convicted of bribery in groundbreaking Lesotho corruption trials.

Three European companies were found guilty and fined 4.4-million Euro
for paying bribes in order to win contracts in Lesotho, announced the
European Anti-Fraud Office (OLAF) [PDF] .

The details of the case were published now, as evidence is mounting
that Western companies are paying bribes in developing countries.

The Lesotho investigation into the suspicions of fraud and bribery, in
regard to the Lesotho Highlands Water Project, began in November 1999.
The donors of the project, such as the European Commission, the
European
Investment Bank and the World Bank, were informed of the findings of
the criminal investigation.

The project was set up for the construction of dams, water transfer
tunnels and an underground hydroelectric power plant. It is one of the
biggest dam projects in the world and the largest bi-national
construction project ever in Africa.

The European Union has been involved in this project since the early 1980s.

The total European Development Fund (EDF) financing for the project was
61.2-million Euros and the share of the European Investment Bank (EIB)
in the funding of the project was 122.5-million Euro.

The Chief Executive Officer of the project was found guilty of bribery
by the High Court of Appeal of Lesotho and is serving a 15 year prison
sentence. (Ed. Note: His name is withheld for reasons of privacy.)

The French company, Schneider Electric of France pleaded guilty and was
convicted of 16 counts of bribery and fined 1.19-million Euro.

The Impregilo company of Italy, pleaded guilty in the High Court of
Lesotho to the alternative charge of Attempting to Defeat the Course of
Justice and was fined 1.62-million Euros.

Lahmeyer engineering contractor of Germany was found guilty of eight
counts of bribery and was fined 1.6-million Euros. An appeal before the
Court of Appeals of Lesotho was rejected.

OLAF revealed the fines only now, although the fines were given in
2004, because there was no longer scope for the companies to appeal.