Goa ‘bribery case: 3 days before indictment, two India officials of US firm quit jobs

Wayne Overman and Luke McKinnon, directors of Louis Berger Consulting Pvt Ltd, quit on July 14, saying they were leaving for “better future prospects”, according to filings by the company with the Registrar of Companies (RoC).

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LBI admitted to violations of the US Foreign Corrupt Practices Act (FCPA) and agreed to pay a $ 17.1 million penalty to resolve charges that it bribed foreign officials, the US Justice Department said in a release on July 17. The company was involved in malpractices in, besides India, Indonesia, Vietnam and Kuwait, the Justice Department said.

In India, the company was accused of bribing officials to win two major water projects in Goa and Guwahati. The beneficiaries of the $ 9,76,630 paid for the Goa project in August 2010 allegedly included a minister. “The bribe money was disguised as payments to vendors for services that had never actually rendered,” the US district court documents said.

Addressing BJP workers in Margao, Parrikar, who was chief minister of Goa before joining the union council of ministers, alleged that two ministers in the Congress-led Digambar Kamat government might be involved in the bribery case, PTI reported. A CBI probe would bring out the truth, he said.

In Panaji, Chief Minister Parsekar told reporters, “When the contracts were awarded, Digambar Kamat was chief minister and Churchill Alemao was public works department minister. Now, it should be revealed which minister took the bribe.”

He later told The Indian Express he would write to the Prime Minister asking for a CBI probe. “There is no question of holding back the project. The complaint made out by the US court is genuine and I am planning to write to the Prime Minister and the union Home Minister requesting them to order a CBI inquiry into the role of former ministers in the case,” Parsekar said.

Alemao told The Indian Express that he had had no role in the appointment of the Louis Berger Group company. “A PWD minister does not appoint consultants in any project. That is decided by technical committees,” he said.

Kamat was not available for a comment.

The Louis Berger Group company was part of a consultancy consortium with two Japanese firms and an Indian partner appointed to manage the $ 311 million Goa water supply and sewerage project awarded in 2009.

On August 26, 2010, “a consortium partner prepared a payment tracking schedule stating that the company had paid USD 976,630 in bribes in connection with the Goa project to date,” federal prosecutors told a court in New Jersey.

On August 17, 2010, a consortium partner sent an email to James McClung, its then India representative, saying, “As discussed I enclose the details as provided by [third-party intermediary]. I have also added the details of amounts paid to [the Company] as of date by [the consortium partner] in the same sheet.” The attachment included an entry, “Paid by [an agent of the company] to minister on behalf of agent,” federal prosecutors said.

The Louis Berger Group has now replaced McClung with Ivan Keogh. McClung, along with Richard Hirsch, the former executive responsible for operations in Indonesia, Thailand, the Philippines and Vietnam, pleaded guilty to one count of conspiracy to violate the FCPA, and one substantive count of violating the FCPA.

Louis Berger spokesperson Regine de la Cruz said that as part of an expansive corporate reform programme that began in 2010, the company had conducted an extensive internal investigation into its business activities outside the US, including India, in 2010 and earlier.

“The company self-investigated and self-reported inappropriate business activities to the US government as we uncovered them. We separated Richard Hirsch (one of the senior employees charged) and James McClung, the managers engaged in inappropriate conduct, from the company in the first half of 2012 after evidence of improprieties came to light. The FCPA issues involved activities by these former managers identified between 1998 and 2010,” de la Cruz said in response to an email query from The Indian Express.

The spokesperson said that in the last five years, Louis Berger had invested over $ 25 million into “new systems, policies and people” to transform the culture of the company, which includes instituting a new leadership team in India and Asia.

In India, LBI has a representative office and a consulting arm with offices in Delhi, Gurgaon, Mumbai, Chennai and Hyderabad. According to the RoC filings, the consulting arm, Loius Berger Consulting, has a paid-up capital of Rs 33.69 lakh, and the company made a profit of Rs 10 crore in the financial year 2012-13 [the latest available data].

According to the website of Louis Berger, in India, the company has been providing consultancy services on various projects such as Mumbai Metro Line 1, Maharashtra Energy Distribution, Protecting the Taj Mahal, and Guwahati Water Supply.