By Probe International

SNC-Lavalin corruption trial: Bangladesh wants the diary

(September 7, 2013) Bangladesh plans to have a anti-corruption official attend the Canadian pre-trial for two former SNC-Lavalin employees charged with corruption in relation to a $1.2-billion Bangladeshi bridge project. Canadian evidence is needed to complete the Bangladesh case.

By Brady Yauch for Probe International

Officials from Bangladesh are hoping to have a representative attend an Ontario hearing against two former SNC-Lavalin employees who stand accused of bribing officials in the developing country.

The Bangladesh Anti-Corruption Commission (ACC) says it has applied for a visa to send its legal adviser Anisul Haque as an observer to the pre-trial hearing for the ex-employees who face charges of corruption in connection to the country’s $1.2-billion Padma Bridge project.

“The hearing of the Padma Bridge conspiracy case in Canada is scheduled for September 9. The commission has decided to send one of its officials and he has already applied for a visa. As soon as he gets the visa, he will fly to Canada to attend and observe the hearing,” the commission’s chairman recently told a Bangladeshi media outlet.

The ACC has already completed its investigation into the project, according to local reports, and is waiting for Canadian evidence to bring the investigation into the corruption case surrounding the Padma Bridge contract to a close. Officials recently told reporters that they needed evidence from Canada to place formal charges against those involved in the project.

At the heart of the investigation, which has enveloped high ranking officials at both SNC-Lavalin and the Government of Bangladesh, is a diary belonging to Ramesh Shah, one of the two employees on trial, that supposedly lists the names of those individuals in Bangladesh who were set to receive bribe money.

The head of the ACC says it “cannot prove the allegations against the accused without the diary of Ramesh Shah.”

Bribery allegations on contracts related to the Padma Bridge project first surfaced in 2011 when officials at the World Bank, a financer of the project, expressed concern that government officials were using personal companies to act as a “silent agent” to help bidding companies land the lucrative contract.

On September 1, 2011, on a “referral” from the multilateral bank, the RCMP raided SNC-Lavalin’s office in Oakville, Ontario and launched an investigation into the corruption allegations surrounding the Padma Bridge project.

The ACC, on the other hand, stated in February 2012 that it found no evidence of corruption on the project.

Yet, in April 2012, two former executives with SNC-Lavalin, Ramesh Shah and Mohammad Ismail, were formally charged by the RCMP with corrupting foreign officials. Both men were charged under the Corruption of Foreign Public Officials Act, which targets a person who “directly or indirectly gives, offers or agrees to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official.”

In June 2012, the World Bank pulled funding for the project, saying the Bangladesh government had failed to meet four conditions it had tabled in order for the proposed project to move ahead. Among those conditions was an agreement to share information with the World Bank and to ensure those under investigation could not hold public office.

“The World Bank cannot, should not, and will not turn a blind eye to evidence of corruption.  We have both an ethical obligation and a fiduciary responsibility to our shareholders and IDA donor countries.  It is our responsibility to make sure IDA resources are used for their intended purposes and that we only finance a project when we have adequate assurances that we can do so in a clean and transparent way,” the World Bank said at the time.

But by September of that year the World Bank reversed course and said the Bangladesh government was now beginning to “address the evidence of corruption the Bank identified,” adding that government employees and officials who were facing corruption allegations had been placed on leave and that “a full and fair investigation is now underway.”

As a condition of reinstating its funding of the bridge project, the World Bank insisted, and the government agreed on a series of measures: new procurement arrangements to enhance oversight, to ensure transparency and “clean construction of the bridge”; investigations proceeding in a “full, fair, and expeditious manner”; and an independent External Panel to review the Government of Bangladesh’s investigation and to report their findings to the Government and the World Bank.

In October, the Bank announced the members of an External Panel that would review the findings of the ACC.

By December 2012, the ACC launched a formal investigation into corruption allegations against seven individuals who, according to the World Bank Panel of Experts, “attempted to obtain financial gains for themselves and others by favouring SNC-Lavalin and its partners in the tender process.”  Four of those individuals are associated with SNC-Lavalin, the report said.

But controversy plagued the announcement of the corruption investigation by the ACC because it excluded the former Minister of Communications, the most senior official associated with the scandal. The World Bank opposed this exclusion, saying there was sufficient evidence to suggest that he was involved. The Bank claimed that his name “and the indication of a payment of 4% were subsequently included in the list of people that were to receive compensation for their alleged involvement in the conspiracy.” The Bank concluded that in order for the investigation to be both “complete and fair” it should include the former Minister of Communications.

The ACC at the time maintained that it did not have sufficient evidence to go after the former Minister of Communications – and has still not laid any charges against him.

In January of this year, the Bangladesh government wrote to the World Bank and said it was withdrawing its request for funding for the bridge project, but “the investigation of alleged corruption will continue unabated and vigorously.”

Then, in April of 2013, the World Bank slapped an unprecedented 10-year ban on SNC-Lavalin and 100 of its affiliates because of its “misconduct” on the Padma Bridge and another project in Cambodia. The World Bank accused the engineering firm of a “conspiracy to pay bribes and misrepresentations when bidding for Bank-financed contracts.”

Since then investigators at the ACC have attempted to gain access to the supposed diary of Shah, to no avail. In May, two ACC investigators were in Canada to do just that, but failed in their quest.

The next episode of the unfolding drama of allegations against SNC-Lavalin is scheduled to take place on Monday, September 9, at the pre-trial hearing of Ramesh Shah and Mohammad Ismail in Ontario’s Criminal – Superior Court of Justice, 9:30 AM, 361 University Avenue, Toronto.

Brady Yauch is an economist and Executive Director at Consumer Policy Institute.

Further Reading

Final Report of the External Panel of Experts: Re: the Padma Multipurpose Bridge Project, February 20, 2013

ACC team goes to Canada today

Padma Bridge Scam ACC team off to Canada

SNC and a bridge for Bangladesh: CBC

ACC chief doubts completion of case sans Ramesh diary

Former SNC-Lavalin employee sues company, blames boss for alleged bribery

Here Comes Canada: Corruption Prosecutions Likely to Increase Under the Amended CFPOA (Corruption of Foreign Public Officials Act)

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