14:08, February 29 286 0 theguardian.com

2020-02-29 14:08:04
The transparency project  'This is a practical joke': the moment police called about alleged foreign bribery

It was the call Lyndsay Chapple had dreaded.

The call that left him racked with nerves. The call he’d been crossing his fingers would never come.

The federal agent on the other end of the line was investigating serious allegations of foreign bribery against multinational consulting giant Sinclair Knight Merz, one of the Australian government’s biggest foreign aid contractors.

His call wasn’t “entirely” unanticipated, Chapple told a preliminary hearing in the NSW local court this week.

Chapple, an experienced engineer, had spent 23 years with the company, which consulted on major overseas development projects across south-east Asia and the world.

Police were investigating allegations that SKM paid and covered up bribes in the Philippines and Vietnam for a decade, the court heard, using a complex system of secret payments and third parties to move money to foreign officials for work on aid projects funded by the World Bank.

Chapple told the court he was in a tightly held “circle of knowledge” within SKM. A select few who could read the company’s invoices and internal spreadsheets and understand what terms such as “marketing” fees might be hiding from prying eyes.

When Sgt Ray Holder called in 2013, it was too much for Chapple to process.

“I said: ‘I don’t believe you. I believe this is a practical joke. Give me your number and I’ll call you back,’ ” Chapple told the court.

Many within the company thought SKM would escape prosecution, the court heard.

“My second great point of embarrassment was that I had heard from many people that since SKM self-reported and instituted many processes and policies to prevent it from happening ever again, I was under impression it was not going to be investigated,” Chapple told the court.

Chapple said as much to the sergeant.

Holder was laughing on the other end of the phone, Chapple said. There was “great mirth” from the officer, the court heard.

“He said: ‘If I knew you robbed a bank, just because you came in and told me you robbed a bank, that wouldn’t stop [an investigation],’ ” Chapple told the court.

The SKM case was in the NSW local court this week for a preliminary hearing to test the way Chapple, a prosecution witness, and another SKM employee interacted with police and came to make their statements. It is the first time any of the witnesses to the alleged foreign bribery case against SKM have given evidence before court.

Court documents allege the company offered bribes to Vietnamese officials between 2006 and November 2011 to secure work on four infrastructure projects, including in Thanh Hoa, Da Nang and the northern mountains. The company is alleged to have offered benefits of US$880,000.

SKM is also alleged to have conspired to bribe officials on five projects in the Philippines between 2000 and mid-2005, including sewerage, river rehabilitation and air quality projects in Manila, and an urban services project on Mindanao.

The firm is accused of offering benefits worth more than $6.5m Philippine pesos (about $200,000 at current rates) to “unknown public officials” from the Philippines working on the tender approval process for infrastructure projects.

SKM and the Australian government

Outside of court, the case has posed difficult questions for the Australian government.

Before it was bought out by the Californian consulting giant Jacobs in 2013, SKM received a vast amount of taxpayers’ money to work on Australian aid projects overseas.

A Guardian analysis of public data suggests it won 83 contracts worth $489m through Australia’s aid program between 2000 and 2014, largely for work on infrastructure-related aid projects, and advisory, consulting and service-oriented contracts, including for sanitation, energy and health care on Nauru.

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There is no suggestion taxpayer money was used in the alleged bribery.

The criminal case against SKM

Sydney’s Downing Centre has struggled to accomodate the crowd of solicitors and barristers representing six co-accused.

Those accused of involvement in a conspiracy to bribe officials include the company’s former chief executive Paul Dougas and board member Paul Casamento, both of whom strongly deny the allegations.

Much of the evidence has concerned the AFP’s interactions with Chapple and another SKM employee, Adam Ward Carey.

Neither Chapple nor Carey have been charged.

The pair have been questioned about what police offered them to give evidence against their former employer and how their statements were prepared.

Chapple remembers clearly he received no offer of indemnity in his first call with Holder, the police sergeant.

“There was no offer or inference, sir. At the end of that call I was a nervous wreck,” Chapple told the court.

Not long afterwards, though, there was a second call.

He was informed that police were after only the top brass at SKM. Chapple was too low on the food chain.

“I just remember the key line which meant I started breathing again after four hours,” Chapple told the court. “He said: ‘We’re not interested in junior burgers, you junior people … We’re only interested in people at the sort of board and CEO level, the more senior level.’

“I made a very complimentary response. I said: ‘I can now get off the toilet.’ I remember that very clearly.”

A hotly contested part of Chapple’s evidence concerned the alleged involvement of Dougas in a conspiracy to bribe Philippine officials.

Chapple told the court this week he remembered having conversations with Dougas in 2000, in which he understood the chief executive to be giving him the green light for bribery.

Chapple alleges Dougas said words to the effect of: “I understand that is the way we operate in Asia. You can do this as long as you do three things: first, keep it tight and keep the circle of knowledge to an absolute minimum.”

Dougas allegedly told Chapple the other two rules were to make the payments after the contract was finalised and to ensure it could not be audited later.

Dougas through his barrister, Neil Brennan SC, strongly disputes those conversations took place.

Chapple is unable to place the conversations in a country or give them specific dates, and they were all one-on-one discussions, the court heard.

The hearing concluded on Friday but the case remains before the NSW local court.

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