A Fairfax Media and Huffington Post investigation has uncovered an extraordinary story of bribery and corruption in the oil industry, centred on Monaco-based company Unaoil. This is the story of Unaoil’s penetration of the former Soviet states. The FBI, US Department of Justice and anti-corruption police in Britain and Australia have launched a joint investigation into revelations of a massive global bribery racket in the oil industry. The news comes as Fairfax Media and The Huffington Post can reveal that US giant Halliburton and its former subsidiary Kellogg, Brown & Root are embroiled in the Unaoil bribes-for-contracts scandal through their operations in former Soviet states.
The biggest leak of confidential files in the history of the oil industry also unveils rampant corruption inside Italian oil giant Eni in many of the countries in which the firm has been contracted by national governments to manage their oilfields.
Texas firm National Oilwell Varco, Singapore conglomerate Keppel, Norway’s Aker Kvaerner and giant Turkish joint venture GATE are also implicated. Information from hundreds of thousands of emails to Unaoil’s chief executive, Cyrus Ahsani, show individual executives and managers from Halliburton and Kellogg Brown & Root (KBR), which split in 2007, knew or suspected that Unaoil was acting corruptly to win contracts in Kazakhstan.
Managers from Eni, Spanish Firm Tecnicas Reunidas, French firm Technip, drilling giant MI-SWACO and Rolls-Royce not only actively supported bribery but were offered, or pocketed, their own kickbacks. And US defence giant Honeywell and Australian firm Leighton Offshore agreed to hide bribes inside fraudulent contracts in Iraq.
Companies approached by Fairfax Media and The Huffington Post about their contracts with Unaoil have emphasised their strong anti-corruption policies and have committed to investigating their dealings with Unaoil. Unaoil also denied any corruption.
THE CASPIAN STATES
To win contracts for its clients in Kazakhstan, Unaoil paid multiple bribes to Eni and Kazakh officials overseeing tenders in the giant Kashagan oilfield and elsewhere.
It appears from the leaked files that senior managers from KBR were pushing Unaoil hard to win favour. One email written from a KBR manager told Unaoil to concentrate its efforts on “a good spaghetti house” and “a little shashlick”. The code refers respectively to the officials from Italian company Eni and the Kazakh government who were overseeing the contracts KBR wanted to win.
The leaked files show Unaoil sought to corrupt a number of influential figures, including senior Eni manager Diego Braghi and Kazakh senior official Serik Burkitbayev, to give its clients an advantage over rival companies. The formula was repeated in neighbouring Azerbaijan, where KBR also paid Unaoil millions of dollars to help it win contracts. A leaked KBR file said Unaoil’s key middleman in Azerbaijan was “very close to the President and his family … [and] has an access to every office in the country”.
This middleman, Reza Raein, received millions of dollars from Unaoil in multiple bank accounts. In return, he leaked highly confidential information from senior Azeri government officials to Unaoil, which was fed back to its multinational clients. Unaoil also sought to build its shady empire in Turkmenistan and Uzbekistan, including by liaising with a middleman who promised access to “the company of the [Uzbek] President’s daughter, Gulnara Karimova”.
POLICE BEGIN PROBES, FACE QUESTIONS ABOUT PAST FAILINGS
The US Department of Justice, FBI, UK National Crime Agency and Australian Federal Police are now jointly investigating Unaoil and some its multinational clients. The probe is likely to be one of the world’s biggest, given the number of companies and countries involved.
The leaked Unaoil files show that in the Middle East Unaoil bribed two Iraq oil ministers, Iranian oil chiefs and the right hand man of Colonel Gaddafi’s son, among others.
Questions are emerging about how Unaoil operated for so many years with impunity, using bank accounts in New York and London to launder funds and pay bribes between 2000 and 2012, possibly more recently.
Unaoil has its headquarters in Monaco and is controlled by the wealthy Ahsani family, led by patriarch Ata Ahsani and sons Cyrus and Saman. The trio all have British passports. Many of Unaoil’s crooked deals were organised in London, or used UK and US linked middlemen, bank accounts and shelf companies. British authorities appear to have been in the dark about Unaoil and the Ahsanis, who also operate a London property investment company. The British foreign office has even assisted Unaoil overseas, giving Unaoil and its executives briefings and support.
The Ahsani family meanwhile has mixed freely with Britain and Europe’s elite political and business crowd. Saman Ahsani sits on the board of an Iranian NGO in London alongside former chancellor of the Exchequer Norman Lamont. The Ahsanis host charity events with Prince Albert and Princess Caroline of Monaco, and have paid Prince Albert’s good friend, Mike Powers, to sit on Unaoil’s advisory board. There is no suggestion that Powers, Lamont or the Monaco royals are aware of Unaoil’s corruption.
But the leaked emails reveal several British businessmen and middlemen, including oil executives Peter Warner, Stuart K Steele, Basil Al Jarah and Leo Bortolazzo, have facilitated Unaoil’s corruption.
Asian companies such as Hyundai, Samsung, Sinopec and Petronas are household names. But they have dark secrets. In the latest in Fairfax Media and The Huffington Post’s global bribery expose, these firms and more are implicated for paying kickbacks, money laundering and corruption.
As Asian companies expand their global power and influence, the Monaco-based bribe factory Unaoil has been quick to sign them up to its corrupt business model.
A trove of leaked emails from inside Unaoil show it working closely with Malaysia’s national oil company Petronas, as well as South Korean titans Hyundai and Samsung, and even the Chinese government giant Sinopec. The oil industry’s biggest ever scandal has also exposed Asian conglomerates Yokogawa of Japan, South Korea’s ISU, Singapore’s Keppel and Malaysian firm Ranhill.
The emails show some Asian executives are enthusiastic participants in graft, underscoring the pervasive culture of corruption across the region. It’s an alarming proposition as Asian companies develop into some of the most powerful and influential players in global business. The massive leak of files from Unaoil this week has already sparked investigations by the US Department of Justice, the FBI, Britain’s National Crime Agency and other authorities. Today, we reveal how Unaoil’s corrupt dealings with its multinational clients has also infected the fast-growing African oil industry.
SOUTH KOREAN GIANTS IN LIBYA AND ALGERIA
Thousands of leaked files reveal that managers inside South Korean conglomerates paid millions of dollars in commissions to Unaoil, which funded corruption to win major contracts in Libya and Algeria.
In one email, Korean ISU vice president Joon Lee, writing from a private address, urged Unaoil to bring cash to a meeting to pay a senior Libyan government official who could help ISU win a construction contract. “You are requested to come to see him as you told me at a hotel… I suggest to you with around 20,000 Eruo [euro] at this visit,” the email to Unaoil said. At the time, Joon Lee was not only ordering pay-offs, but pocketing his own bribes. He set up his own offshore company, the Monaco based Sun Holder, into which he agreed to receive kickbacks from Unaoil. In return he passed on confidential information he had received and also ensured the company he worked for, ISU, kept paying Unaoil as its agent. Joon Lee could not be contacted.
The leaked files also reveal that a senior Samsung manager, in cahoots with executives from Hyundai and Hanwha, agreed to pay bribes worth millions of dollars to rig oil-refinery contracts in Algeria. Unaoil engineered the corrupt deals. The two South Korean companies conspired to share the $1.8 billion contracts between them, even though they were apparently competing.
Stuart K. Steele, an executive from a third company, Spanish multinational Tecnicas Reunidas, was paid hundreds of thousands of dollars via offshore accounts. The cash ensured the Spanish company ran dead in the three-way bidding contest: a manoeuvre described in the emails as a “tripartite agreement”. “I understand your friend [from Tecnicas Reunidas] is not comfortable, if his name is specified in the agreement,” an email to Unaoil from a senior Samsung executive said. “Your obligation shall be to maintain three commercial bids to be submitted and to have the contract awarded to any bidder from our place [South Korea]”. Unaoil also sought to bribe officials from Algeria’s state-owned oil company Sonatrach.
MALAYSIAN MILLIONS: PETRONAS AND RANHILL
Oil for many countries is by far the biggest game in town. Many struggling oil-producing nations hire international companies to manage their fields, hoping this will deliver the best value for their people.The Iraqi government was hoping for such a result when it appointed the Malaysian government-owned oil company Petronas to help manage huge oil fields in Iraq’s south in 2010.
Then Unaoil stepped in. Unaoil had a client that wanted to secure a large contract Petronas was overseeing. So Unaoil bribed Petronas executives to rig the contract. Unaoil’s client was British oil services firm Petrofac. Leaked emails reveal that Unaoil agreed to pay millions of dollars to a Malaysian middle man who claimed he could influence a top Petronas’ executive and other Malaysian officials in 2010. “I’ll make [an] arrangement for us to see Mr [Petronas executive] when I’m in Dubai,” middle man Affandi Yusuf wrote to Unaoil. “As you are aware the situation is very sensitive at the moment. I’ll have to meet Mr [Petronas executive] personally to make him comfortable to meet up with your team.” In a later email from Affandi, the middleman claims that, in return for the bribes, his corrupt Petronas contacts had “fed us” inside information from a tender committee. This ensured that Unaoil’s client Petrofac qualified for a large contract. “They have lived up to their obligation to get PF [Petrofac] qualified technically. According to them, PF would have been initially technically disqualified,” Affandi wrote in an email in which he demanded money.
Petrofac responded that it did not condone bribery in any of its operations.
And so it went. In Libya, Malaysian company Ranhill offered Unaoil $40 million to convince senior Libyan officials to award it a large housing construction contract. The leaked emails reveal Ranhill approached Unaoil after former Malaysian prime minister Mahathir Mohamad had failed to convince Colonel Gaddafi to help. Unaoil succeeded where Mahathir had failed. Unaoil paid a high ranking Libyan official, Mustafa Zarti, to assist Ranhill. The leaked files also suggest Unaoil promised a $200,000 personal kickback to a Ranhill executive if he helped Unaoil extract large commissions from the Malaysian company.
Unaoil also paid up to $2 million (along with further payments for a rug and a collection of fine wines) into offshore accounts to two mysterious Algerian middle men, Tewfic Guerbato and Omar Habour. It appears these payments were made to increase Unaoil’s influence inside Petronas and other Asian firms.
SINGAPORE’S KEPPEL AND JAPAN’S YOKOGAWA
Japan and Singapore are considered among the least corrupt – and least corruptible – countries in Asia. But Unaoil’s tentacles extend to multinational oil service firms in both countries. The leaked files reveal that Unaoil was paying bribes in Kazakhstan to help Singaporean conglomerate Keppel win contracts.
A confidential 2007 Unaoil memo details its plans to help Keppel win offshore oil rig and barge contracts on the massive Kashagan oil field. Unaoil regarded Keppel as an ideal client because Keppel had lax anti-corruption controls compared with Unaoil’s other multinational clients. Unaoil also believed Keppel had its own connections to allegedly corrupt Kazakh government officials.
“In my opinion we have a lot at stake here, apart from the $30m [in fees from Keppel] – we could set-up a long term association with these guys [Keppel]…. The problems of working with a US or European outfit do not apply here,” a Unaoil executive wrote in a 2007 memo.
The leaked emails provide specific details of just how helpful Unaoil was to Keppel. In 2006, when Keppel was competing with French multinational Technip to win a contract to build an offshore oil rig in Kazakhstan, Unaoil used a corrupt contact codenamed “small D” to leak inside information on bidding strategy. “Small D” appears to be an Italian oil executive working with the Kazakhstan government.
“Please ask small D what does [he] understand [about the bid]… currently offered by the French,” said one email. “Any news from little D on the outcome of the T [Technip] mtg [meeting]?? — I need to go back to [Keppel senior manager],” Unaoil’s Kazakhstan manager Peter Willimont wrote in yet another message.
In Japan, meanwhile, the Tokyo based electrical engineering and software giant Yokogawa had also hopped into bed with Unaoil.
Leaked emails from 2006 reveal Unaoil paying middlemen to reveal confidential information on the tender strategies of Yokogawa’s competitors in the middle east – information that Unaoil then fed to Yokogawa. “I just had the Japs on the phone [looking for information]”, a Unaoil manager wrote to a middleman who was leaking them information in 2006. “Y[okogawa] France wants to visit us here next week if we have the info to review,” the manager wrote in another email. Yokogawa responded to questions saying they had never working with Unaoil.
石油圈
