Foreigner spilled the beans

A foreign national volunteered the information the Anti-Corruption Commission (ACC) needed to get at bribery involving BNP Chief Khaleda Zia's younger son Arafat Rahman Koko, said ACC sources.

In a five-page statement, he said he would aid the anti-graft body in its probe on condition that his identity would be kept secret and safety ensured.

Introducing himself as "a chartered secretary…married with two children", he also said he would not come to Bangladesh to testify against anyone for fear of reprisal.

On this understanding, the ACC sent an official to Singapore to explore the official procedures there to investigate graft. It also consulted a local legal expert on how to go about the task.

In the following days, investigators at home and abroad gathered that China Harbour Engineering, a container handling firm, transferred huge sums to Koko's account with the Singapore branch of French bank Credit Industrial et Commercial.

They also found out about ZASZ Trading and Consulting Pvt Ltd, the firm Koko owns in Singapore jointly with a Singapore national.

Close on the heels of this scandal came the news of his involvement in global corruption of German multinational Siemens AG.

As the international media ran stories how the corporate giant and its subsidiaries bribed government officials to win contracts in countries across the world, Koko's name came up in the Bangladesh part.

According to sources, the former prime minister's son received at least $1,80,000 (Tk 1.26 crore) as bribe in September 2005 for helping Siemens Bangladesh to win the contract to set up mobile network for state-run operator TeleTalk.

The kickbacks were deposited in the account where the money from China Harbour was stashed.

The Singapore authorities eventually froze the account with over Tk 11 crore.

Asked about Koko's involvement in Siemens bribery, ACC Chairman Hasan Mashhud Choudhury yesterday said they would look into the matter.

The lid on Siemens' global corruption came off as the German conglomerate admitted in the US District Court in Washington DC recently that it had resorted to bribery to win foreign contracts.

Siemens AG on December 15 agreed to pay nearly one billion euros ($1.4 billion) to US and German authorities to settle the scandal.

It acknowledged that up to 1.3 billion euros may have been used to win contracts.

From the mid-1990s until last year, units of the company bribed to win contracts for commuter rail in Venezuela, mobile phone network in Bangladesh, power plants in Israel and traffic-control systems in Russia. Besides, it bought off Iraqi officials to bag a contract in the UN oil-for-food programme, according to international media.

Citing court observations, the New York Times on December 21 reports, "Siemens paid $5million in bribes to win a mobile phone contract in Bangladesh, to the son of the prime minister at the time and other senior officials."

The US district court in its sentencing memorandum described the Siemens corruption in Bangladesh.

It said that between 2000 and 2002, the Bangladesh Telegraph and Telephone Board (BTTB), state-owned telecommunications authority, conducted three open tenders for a mobile telephone project that was ultimately awarded to Siemens.

In the first tender, Siemens was left off for technical non-compliance. The tender was however cancelled anyway.

The second tender held in 2001 too was cancelled. After a change of government that year, BTTB floated the third tender that initially saw Siemens disqualified from the bidding.

Teamed up with Siemens Bangladesh and Siemens Mobile Communications S.p.A. (then a Siemens subsidiary located in Milan, Italy), the company ultimately won part of the contract in June 2004.

Siemens' and its subsidiaries' portion of the contract value was $40,887,000. From May 2001 to August 2006, Siemens Bangladesh engaged or had to engage purported business consultants to bribe government officials for favour during the bidding process.

It had to pay them $5,319,839.83. At least one payment to each of these 'consultants' was made from a United States bank account and the rest through payment intermediaries, the US court said.

Siemens Bangladesh knew that their 'business consultants' were passing along some or all of the money to senior government officials.

In September 2004, Siemens Bangladesh learned that one of the 'consultants' had moved to the US. After that, it continued to pay his consultation fees to an account in Hong Kong.

In 2003, Siemens Bangladesh paid at least $16,000 directly to government officials or their relatives.

The payments were recorded as "consulting fees" and other seemingly legitimate payments on Siemens' books and records.

The US court in its Statement of Offence found that besides Koko seven Bangladeshi citizens were involved in the bribery.

Instead of real names, its document used symbolic alphabets.

Meanwhile, ACC sources said the amount Koko received for helping Siemens Bangladesh to win the Tele Talk deal was paid in his Singapore account in the name of his company ZASZ.

The foreign citizen who offered clues to Koko's bribery told the ACC that ZASZ was incorporated sometime in April 2004. He was introduced to Arafat Rahman Koko by an official from Singapore-based QC Shipping.

The official told him that Arafat wanted to set up a company in Singapore and whether he [the foreigner] would like to help him in incorporation of his company there.

The QC official also said that Arafat, unlike his brother, is not involved in politics, and that he means business.

After meeting Koko, the foreigner agreed to work for him. He helped him have his company incorporated on April 10, 2004.

He also described how Koko's joint account with a Singapore national was opened.

The Singaporean was included as the bank needed a local signatory.