2002 SFO report on 'CP fraud' crucified!

On December 2, 2002, the Serious Fraud Office (SFO) of the Republic of Ghana issued a damning report by its "Investigation Team into alleged fraudulent transfers made by Government of Ghana (GoG) officials to M/S Construction Pioneers (CP)". The report under reference which made some very serious indictable observations and findings against a former Minister of Roads and Highways, Dr. Ato Quarshie, M/S Construction Pioneers Ltd., Mr. Bernhard Ploetner, former Managing Director, M/S Construction Pioneers Ltd. and Mr. Carl Robert Ploetner, former General Manager, M/S Construction Pioneers Ltd., was signed by all the five(5) members of the Investigation Team namely; Mr. Adinkra K. Donkoh (Chairman), Theophilus Cudjoe (Member), Supt. Ken Yeboah (Member), DSP John F. Wilson (Member) and D/Insp Francis N. Baah (Member).

The 19 page Report also recommended the criminal prosecution of Dr. Ato Quarshie, the two Ploetners and their company (M/S Construction Pioneers) on the following charges; "Conspiracy to defraud the Government of Ghana(GoG) in the sum of DM 48,112,276.72-contrary to Section 23 of Act 29/60; Defrauding by false pretences- Section 131 of Act 29/60 and Wilfully Causing Financial Loss to the State in the amount DM 48,112,276.72- contrary to Section 179 0f Act 458".

Seven years down the line however, the same Serious Fraud Office (SFO) in May 2009 under the Mills Administration, formally communicated to CP that the allegations of fraud against it (CP) had been dropped and will never be re-opened. This 2009 SFO communication to CP clearly "crucified" the findings of fraud and criminality made against CP in 2002 by the 5-Member SFO Investigation Team, and apparently, subsequently became part of the terms of the March 18, 2012 Settlement Agreement between Government of Ghana(GoG) and CP.

Meanwhile, this paper's on-going checks have failed to provide evidence of any new official investigation by either the defunct SFO or its successor body, the Economic and Organised Crime Office (EOCO) since 2009 which could have superseded, contradicted or reversed the findings made in 2002 by the SFO.

The SFO's Investigation Team in the course of its investigation in 2002, interviewed 19 witnesses including Dr. Ato Quarshie, Mr. Carl Ploetner, Mr. Kwame Peprah, former Minister of Finance, Mr. Kofi Opoku-Manu, former Chief Director, Ministry of Finance, Mr. Bashiru Lomo-Tetteh Sakibu, former Chief Executive, Ghana Highways Authority, Mr. John Prempeh, former Controller and Accountant-General, Mr. Samuel Swanzy-Baffoe, former Director of Contracts, Ghana Highways Authority and Mrs. Yvonne Quansah, Ministry of Finance.

The New Crusading GUIDE is in possession of the testimonies or statements given by all the 19 witnesses the SFO interviewed or interrogated in 2002 before the issuance of its Final Report in December 2002.

After a critical scrutiny of the trajectory of the contractual disputes and claims and attempted international arbitrations and local mediations/conciliations and negotiations which culminated in the execution of a Memorandum of Understanding (MoU) (December 9, 1994);Legal Advice/Opinion submitted to the GoG and CP on November 7, 1996 by the two Conciliators (Prof. GKA Ofosu-Amaah and Mr. NK Kudjawu) jointly appointed by the two parties in February 1996; Interim Terms of Settlement of Clause 9 of December 9, 1994 MoU (November 22, 1996) and the December 5, 1996 Full and Final Settlement Terms of Clause 9 of December 9, 1994 MoU, the SFO Investigation Team found out that contracts for three road projects; namely the Akim Oda- Nkawkaw; Yamoransa-Assin Praso; Biriwa- Takoradi; were respectively signed on the same day of December 5, 1996 by Dr. Ato Quarshie and Mr. Bernhard Ploetner and that an important development concerning the contracts was that during the negotiations held between Ghana Highways Authority(GHA) and CP, the latter made a strenuous request for the "negotiations of rates to be linked with the settlement of their Standstill Cost relating to a previous contract". (Refer Para 3.5 of minutes of Negotiation Meeting held between GHA and M/S CP for the construction of the Akim Oda-Nkawkaw and New Abirem- Akwatia Roads).

The GHA, according to the investigators, firmly declined the CP request on the grounds that "it had no mandate to consider it". The CP request was in regard of Standstill Cost and had no connection to any other monetary award.

The investigators noted that after the negotiation of the rates, CP offered to assist in the final preparation of the copies of the contracts when it was realised that GHA's facilities like photocopiers had broken down. They revealed that when CP completed the preparation, it did not return the contracts to GHA for final vetting. Instead, CP sent the said contracts directly to the office of the Minister of Roads and Highways, where on December 5, 1996 they (contracts) were executed by Dr. Ato Quarshie and Mr. Bernhard Ploetner. This was contrary to the prevailing custom of inviting the Chief Director, Legal Officer of the Ministry, the Deputy Chief Executive(Dev) of GHA and Director of Contracts, amongst others, to be present to observe the signing of the contracts. After signing, the contracts were then sent to the Director of Contracts, GHA, Mr. Samuel Swanzy-Baffoe for registration and distribution.

"ON PERUSAL OF THE CONTRACTS, MR. SWANZY-BAFFOE DISCOVERED TO HIS TOTAL SURPRISE THAT THE CONTRACTS' BILL OF QUANTITIES HAD BEEN RADICALLY CHANGED. IT WAS NOTICED THAT THE NEGOTIATED RATES HAD BEEN UNILATERALLY RAISED BY CP IN CONSIDERABLE AMOUNTS AND NEW ITEMS INTRODUCED. WHEN THIS DEVELOPMENT WAS BROUGHT TO THE ATTENTION OF OTHER OFFICIALS AT GHA, THEY WERE EQUALLY HORRIFIED SO THEY MOVED WITH ADMIRABLE DISPATCH AND ON THE SAME DAY OF 5 DECEMBER 1996, SENT A PROTEST LETTER TO CP, COPIED TO THE MINISTER, DR. ATO QUARSHIE, AND CHIEF EXECUTIVE (DEV), GHA", underscored the investigators on page 7 of their Report. (The said letter will be published soon for the perusal of our readers and the public!).

Both Dr. Ato Quarshie, the Minister of Roads and Highways and Mr. Bernhard Ploetner, the Managing Director of CP, according to the SFO Report, "contemptuously ignored the above GHA's protest letter".

"From henceforth, the act of illegally inflating rates that Dr. Ato Quarshie, Messrs Bernhard Ploetner and Richard Ploetner perpetuated, became known as "loading" and attained an unenviable inclusion in the Ministry of Roads and Highways' lexicon. CP's first attempt to benefit from the fraud occurred when it presented Invoices Nos: 2 - 7 from the Biriwa - Takoradi Road Project to GHA from September 1998 for conversion into Certificates for payment. Officials at GHA renewed their resistance to this blatant fraud with unabated ferocity until CP finally succumbed and agreed that the "loaded" amounts should be "off-loaded" from the said contracts. At the time of the "loading" the total amount was DM 60, 154,939.67", noted the SFO Report on page 10.

According to an explanation proffered by Mr. Robert Ploetner to the Investigation Team, the DM 60 million included an amount of DM 44 million for "other legal claims"; an explanation the investigators rejected outright, adding that "there was no legal basis for that amount and it was simply a fraudulent act".

The investigators also found that the "'loading' of DM 38.3 million unto the 3 contracts was a fraudulent act”, and "the suspicious manner in which Dr. Ato Quarshie, Mr. Bernhard Ploetner and Mr. Robert Ploetner orchestrated the signing of the 3 contracts between themselves on 5 December 1996 in the absence of key officials like the Chief Director of the Ministry, the Acting Chief Executive (Dev) of GHA, Director of Contracts (GHA) is evidence of an attempt to cover up their fraudulent act. Mr. BLT Sakibu, Chief Executive of GHA, was invited to witness Dr. Ato Quarshie's signature only and not to vet the three contracts".

"We also find the conduct of Dr. Ato Quarshie, Mr. Bernhard Ploetner and Mr. Robert Ploetner, by deliberately ignoring or failing to respond to a letter written to them on the same date of 5 December 1996 by GHA, registering its objection to the "loading", as further evidence of criminal intent", observed the investigators on page 16 of their Report.

Mr. Robert Ploetner, in his written statement to the Investigation Team, claimed that "the amount of DM 38.3 million was arrived at as part of amicable settlement discussions held between CP and GoG in order to reach an overall Full and Final Settlement Agreement. Members to such discussions held were Minister of Roads and Transport, Dr. Ato Quarshie, Mrs. Grace Orleans representing the AG's Office, as well as Mr. Larry Adjetey who was appointed as facilitator to the resolution of the case. The issue was discussed for a period of at least 2 - 3 months".

Mrs. Orleans, according to the investigators, however categorically denied participating in any such "discussions".

"Surprisingly, Dr. Ato Quarshie does not seem to appreciate the gravity of the matter under investigation. For example, he told the Investigation Team, that the DM 38.3 million was in "part settlement" of the 480 km (the other part being the award of three road projects). When pressed to provide the legal basis for the said monetary award, he sarcastically suggested that the legal basis "could be found in the minutes of meetings held between GoG and CP". It is needless to say, that "minutes of meetings" cannot constitute the legal basis for GoG to pay CP such a colossal amount ", emphasised the SFO Report on page 17.

The Investigation Team also found that "the evidence, documentary and circumstantial, show a conspiracy between Dr. Ato Quarshie, Mr. Bernhard Ploetner and Mr. Robert Ploetner, to defraud GoG in the amount of DM 48,112,276.72 which consist of DM 44,080,868.36 plus interest of DM 4,031,304.36. We find that fraud was committed when they caused the Minister of Finance, Mr. Kwame Peprah , to implement a Payment Schedule that transferred a total amount of DM 48,112,276.76 into an account held by CP LGT Bank in Liechtenstein".

While acknowledging that Mr. Peprah had assumed office as Minister of Finance in August 1996, the Report underscored that there was no evidence that on assumption of office he actively participated in the negotiations that culminated in the execution of the Interim Terms of Settlement or the Full and Final Settlement Terms. More importantly, they pointed out that there was no evidence to suggest that Mr. Peprah was involved in the conspiracy to "load" the three contracts with the fraudulent amount of DM 44,080,972.36.

"It became Mr. Kwame Peprah's lot to supervise the preparation of a Payment Schedule, which he did by executing it on 10 March 1999. There is evidence to show that it was CP which drafted the Payment Schedule and then submitted it to the Minister of Finance. However, Mr. Peprah is vindicated, in that, on the receipt of the said draft, he submitted it to Mrs. Grace Orleans, the former Solicitor-General for her opinion. It was only after receiving Mrs. Grace Orleans' opinion and corrections that he gave his approval to the drafted Payment Schedule", articulated the SFO investigators on the penultimate page of the December 2, 2002 Report.

Interestingly, almost all public officials and Ministers of State who have appeared before the Public Accounts Committee (PAC) in the course of the latter's current public hearings or sittings have denied knowledge of the existence of this SFO Report or of even the fact that the SFO did conduct and complete investigation into the CP fraud matter in 2002. Even more surprisingly, the same SFO, on May 13, 2009, under the signature of its Acting Director, wrote a letter to inform CP that the allegations of fraud made against it(CP) "have been proven to be false; the investigation has been dropped, and will never be re-opened" (See The Insight Newspaper, March 27, 2012 edition, page 10).

An authentication of The Insight's disclosure had earlier been provided by Mr. Ato Dadzie, a former Chief of Staff in the Rawlings-led NDC Administration, who while writing in defence of his client, former Attorney-General and Minister for Justice, Mrs Betty Mould -Iddrisu, in a press statement dated March 12, 2012, revealed that "various allegations of fraud on the part of CP Construction could not be established both at the International Arbitration and in Ghana. Indeed the Serious Fraud Office in Ghana had closed the docket as unproven".

Apparently, it was this rather strange officially sanctioned U-Turn in contrast to the 2002 SFO findings of fraud and criminality against CP in May 2009, which found expression in the Catalogue of Terms of the controversial March 18, 2012 Settlement Agreement brokered by Mrs. Mould-Iddrisu on behalf of the Government of Ghana(GoG) which culminated in GoG's commitment to the pay of 94 million Euros to CP as full and final settlement of Ghana's liability to CP after about 20 years of litigation and arbitration both in Ghana and abroad.

Paragraph(d) of the March 18, 2012 Settlement Agreement titled: "Criminal Actions In Ghana" required a "Written confirmation that the Serious Fraud Office has completed its investigation into the road construction contracts between Ghana and CP, and has concluded that CP including all its predecessors-in-interest, any other officers and directors of CP and its predecessors-in-interest, and Robert Ploetner and Bernhard Ploetner have not committed any crime through the date of this Agreement in connection with the negotiation, entry into or performance of any of the road construction contracts specified in this Settlement Agreement".

Government of Ghana(GoG) was also required to "prepare and provide to CP within 30 days of the signing of this Agreement a document releasing Charles Onumah from his surety obligation on Robert Ploetner's bail, and return of the land title deed submitted to the Serious Fraud Office in connection with his surety obligation. Ghana also pledged to "dismiss with prejudice and without costs all legal actions, civil or criminal, that it has against CP, specifically including all pending matters listed in Sub-paragraphs 1 (a), (b), (c) and (d) above, within 10 days of the signing of this Agreement. Each party shall bear its own costs of such proceedings, including attorneys' fees. Ghana will provide the written confirmations required by Paragraphs 1(d) above at the same time as the signing of this Agreement ".

It was thus within the context of the letter and spirit of the March 18, 2012 Settlement Agreement that the Government of Ghana agreed to ‘crucify’, bury and never resurrect or re-open the allegation of “loading” or fraud against CP.

May the “2002 SFO Report on ‘CP Fraud” rest in peace – RIP!