– The Case of Mabey and Johnson
By Sydney Casely-Hayford, sydney@ghananewsmonthly.com
In a previous article I attempted to unravel a cocktail of corruption and many readers asked for similarities in other cases to help weave threads of events, which can help curb the prevailing stench of corruption in Ghana. A few readers also blamed us the public as major contributors because we continue to ply institutional purse holders with incessant requests to deliver to our desperate needs. This could be a simple chicken and egg situation, but some variants of corruption are retained solely within the higher echelons of power.
As the UK Serious Fraud Office (UK SFO) has engaged Mabey and Johnson in a first test case of their version of the USA’s Foreign Corrupt Practices ACT, Directors and shareholders of the UK company have volunteered information under the new provisions of bribery offences in order to plea bargain their case.
This past Friday, August 7, 2009, the case against Mabey was postponed, to be heard on September 25th this year. The UK has to prove that it is taking these corruption charges seriously, coming in the wake of their refusal to investigate the BAE’s Saudi Arabian arms deal and other cases presently before the UK SFO. One major disclosure made by Richard Alderman, Director of UK SFO is that Mabey and Johnson has agreed to pay “reparations” to both Ghana and Jamaica for bribery offences between 1994 and 2000. This admission immediately attaches guilt of some wrongdoing. How much was given, and who was bribed on our (Ghana) side is detailed in the UK SFO submission to the court, but unfortunately presiding Judge Rivlin chose to gag the press. The information is available, we just cannot broadcast in the public yet. But it will come out. The pressure is on the NDC government to accept this reparation.
Here is the corruption cocktail for this project, case no. 1999 Folio 874 before Honourable Mr. Justice Morrison in the High Court of Justice, Queens Bench Division, UK, June 27, 2003. Mabey and Johnson Limited and Ecclesiastical Insurance Office PLC. On or about 24 September 1996, the steelwork structure supplied by Mabey to an Italian company and erected in Ethiopia became unstable and partially collapsed. This meant that Mabey had to review the designs and construction of a number of their bridges, including, relevantly, steel bridges which had been erected or were due to be erected in Ghana. In rectifying the actual and potential faults in the Ghana bridges, Mabey incurred costs, which exceeded £2 million. This case deliberated on Mabey’s claims against the Insurance company. Two contracts to build a total of 9 bridges in Ghana span this period and the Government should have been alerted after the collapse in Ethiopia that the bridge designs were faulty. Ghana Priority Bridge 1 was valued at $17,185,000 and the second Ghana Priority Bridge 2 was in excess of $8 million. Mabey undertook to do designs for bridges under two different contracts. It was Mabey?s contractual duty to design each set of bridges carefully and properly. They failed to do so in either case. The design work for each set of bridges was negligent and the negligence occurred in 1993/94 and 1995. Yet Ghana Government continued with the contract. At the time of the Ethiopian bridge collapse, 2 UCBs (Unit Construction Bridges) had been constructed under phase I of the Ghana priority bridge programme, and were up and running, namely those at Damanko and Sabari; the third UCB bridge at Tano, had been designed and fabricated but not erected. In relation to the Ghana II phase, three had been constructed and three had been designed and fabricated but had not been constructed. The eventual outcome was that remedial works were carried out to the two main Ghana I bridges; the Tano bridge was re-designed and a replacement bridge was supplied using some of the existing components. The three UCBs constructed under Ghana II were eventually replaced, and the three awaiting construction were re-designed and replacement bridges were supplied. The contracts were not cancelled despite the design faults and funding issues (more of this later). A clear lack of due diligence and poor reaction to potential disaster. Ghanaians were going to travel on theses bridges daily. A Mr. Potter negotiated the bridge deals on behalf of Mabey and Johnson and in Ghana, Mabey’s representative was the late Danny Ofori-Atta, whose business associate at the time was the late Djin Soussidis, son of JJ Rawlings’ cousin and good friend, Michael Soussoudis. Djin died mysteriously from food poisoning and Danny died ostensibly from heart failure. Danny Ofori-Atta was also a leading member of the NDC affiliate EGLE (Every Ghanaian Living Everywhere) party, which pundits never recognized as a serious political machine. In July 2004, Mr. Ofori-Atta announced a break away from the NDC party much to the chagrin of other executives and joined the PNC’s Dr. Mahama as his running mate. In a testimony to his success in life, Dr. Mahama is on record saying, “He left a legacy; the party and some beautiful bridges as monuments to his memory.” In about 1991, Ghana?s Ministry of Roads proposed the construction of a flyover in the heart of Accra, for which project £14.5 millions had been allocated through ECGD financing, under the Buyer Credit scheme. Mabey were to be awarded the contract. Under a Buyer Credit scheme, the Government would enter into a loan agreement with a UK bank to finance the contract between the relevant department and the UK exporter. The lending bank would pay the exporter under the supply contract as the payments became due. The ECGD would provide to the lending bank a guarantee of re-payment. For a variety of reasons this project did not go ahead and thus there was an unused financial facility. When the flyover programme was cancelled, Mr Potter saw the opportunity to put forward a road bridge programme, which he named the Priority Bridge Programme. To be able successfully to obtain business for Mabey he had to work closely with the Finance Ministry. Once the funding was in place, he was then in a position to put forward proposals to the relevant spending department. It was more a question of finding projects to fit the money rather than the other way about. As he put it, “Once an amount had been secured for the project, I could negotiate the specific details of the project with the Ministry of Roads & Highways (MRH) with reference to the sum secured.” Eventually, the Ministry decided that the £14.5 million secured for the flyover project should be re- allocated to a rural bridging programme. This involved the supply of bridging to the MRH at strategic sites within Ghana and the project was to be overseen by the Ghana Highway Authority (GHA). Mr Potter originally suggested the supply of a large number of panel bridges suitable for rural roads. But it became clear that the government’s preference was for a heavier duty bridge, such as a UCB, more suitable for national highways. A firm of consulting engineers had carried out an initial survey of potential bridge sites and these were contained in a book (or bible as it was known) a copy of which the GHA gave to Mr Potter. Armed with this information, Mr Potter identified two sites for major bridges and several sites for smaller ones. This way, instead of projects being identified and financing requested to fund the construction, the GRH virtually handed Mr. Potter a carte blanche to plug whatever projects he could come up with. GRH gave up its oversight responsibility and Potter submitted requests for drawdown. Dr. Kwesi Botchwey was finance minister until mid-1995 when he resigned and Mr. Kwame Peprah took over the ministry.
It is unclear whether the Ghana Government or Ministry of Roads and Highways is pursuing a case against Mabey and Johnson to recover costs, but the UK Government is certainly going to collect when the day is over. There is therefore no evidence that Ghana will follow the UK and request compensation and that is where the “Old Man” ingredient in the corruption cocktail mixes in. Someone does not want this to come out! A draft Anti-Bribery law was submitted to the UK Parliament in March for pre-legislative scrutiny and first reading in October this year. The bill is expected to enhance the UK’s ability to prosecute overseas corruption. The UK SFO lists the following sources as key to gathering facts on cases they prosecute. A close relationship with the police, public information, whistleblowers, information from NGOs, support from international institutions and counterparts and government departments. Looking to solutions to stem the corruption we must first start with FULL PUBLIC DISCLOSURE. The NPP government failed to pass the Freedom of Information Bill and it is now imperative that the NDC government do it. It is not a matter of political game staging it is a major mix in the corruption cocktail. We have a Whistle Blowers Act 720 and we have independent institutions, albeit under-funded, who have legal authority to investigate and recommend prosecution. We must strengthen and make these institutions independent and able. Parliament, especially at committee level must be more vigilant and our parliamentarians have to be more capable and more aware of public disclosure and dialogue with constituents. The “Big man, Old man” syndrome is the most complex and for that we need leaders of substance and integrity. It is a mighty challenge, but when the head is rotten, the body just wastes away. For that, we have four fingers and a right hand thumb.
Again, we are waiting for the horror stories from the Ghana@50 probe and it is unraveling. Also read Kofi Akosah Sarpong’s essay on Tajida “Big Man syndrome” from www.ghananewsmonthly.com.
