Mabey and Johnson convicted for overseas corruption

Bridge contractor Mabey and Johnson has pleaded guilty to overseas corruption, and to breaching United Nations sanctions in Iraq.

At Southwark Crown Court today (Friday), the Reading-based construction firm was fined £3.5m, ordered to pay a £1.1m confiscation order and £350,000 in prosecution costs. It will also have to make reparations payments of £1,413,611 to Ghana, Jamaica and Iraq.

Mabey and Johnson admitted bribing officials in Jamaica and Ghana when bidding for public contracts, and paying money to Saddam Hussein's Iraq regime, violating the terms of the UN oil-for-food programme.

The payments helped the firm secure contracts worth £60m.

Sentencing, Judge Geoffrey Rivlin QC said the case had come to light after five of the company's directors stepped down and the new board decided to turn itself in to the Serious Fraud Office.

It handed over "deeply incriminating" documents detailing its bribery and "sanctions-busting".

Following discussions with the SFO, the firm pleaded guilty to two charges of conspiracy to corrupt and one charge of breaching UN sanctions on Iraq. It is the first time the SFO has agreed a US-style plea bargain with a firm accused of corruption overseas.

Long history of corruption

The court heard how Mabey and Johnson had enjoyed "extensive commercial interests" in Iraq until it invaded Kuwait in 1990.

It first started paying backhanders in Jamaica in 1993, and its culture of bribery later spread to Ghana and other countries including Madagascar, Angola, Mozambique and Bangladesh.

In a memo about Bangladesh, one of Mabey and Johnson's directors said: "The use of the 'white man's handshake' is extensive in building trust and confidence before any contract is concluded."

Mabey and Johnson also "seriously misled a highly reputable firm of solicitors" to cover up its behaviour.

Attempts to reform

The judge said he recognised the company had taken extensive steps to distance itself from its criminal past and ensure there would be no repetition.

The firm therefore deserved "recognition and approval" for its efforts to put matters right.

He wanted to ensure any penalties imposed would not prevent the company "continuing in business and giving employment to very many people and bringing further significant revenue into this country".

SFO director Richard Alderman said: "The offences are serious ones but the company has played its part positively by recognising the unacceptability of those past business practices and by coming forward to report them and engage constructively with the SFO."

The SFO is still considering 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)