Dhaka: Last Friday, a Canadian court acquitted three men, two of them former executives of the large engineering company SNC-Lavalin, who had been accused of bribing Bangladesh government officials to win a $50 million consultancy contract involving the World Bank-funded construction of the Padma bridge.
Their acquittal followed a ruling by the judge that some wiretap evidence, which the prosecution had wanted to use in the trial, was inadmissible.
In response, the prosecutor told the judge that the state would not proceed further with the trial as, without the wiretap evidence, it no longer had a reasonable prospect of conviction.
The prosecution in the Canadian court followed an investigation by Integrity Vice Presidency, an independent unit within the World Bank, which found that there was a “high-level corruption conspiracy among Bangladeshi government officials, SNC Lavalin executives, and private individuals in connection with the Padma Multipurpose Bridge Project.”
In June 2012, after the Bangladesh government failed to comply with conditions that the World Bank had set down to ensure a proper investigation against those involved in the alleged conspiracy, the international bank cancelled its $1.2 billion loan for the construction of the bridge.
The cancellation was, at the time, a significant political blow to the Bangladesh government, which vigorously denied there was any corruption and argued that the World Bank’s decision was unnecessary. Since then, the government has used its own money to build the bridge linking the south-west of the country to its northern and eastern regions, which is now in the process of construction.
Bangladesh ministers’ response
Last week’s court decision – which only involved Canadian citizens and not the Bangladesh civil servants and ministers that the World Bank had accused of corruption – has been interpreted by Bangladesh government ministers and supporters as meaning there was no corruption of any kind in the project and that the allegations were fabricated.
“The World Bank must apologise to Bangladesh, the prime minister and the people who were accused in the case,” law minister Anisul Huq told parliament. “[The case] was filed on the basis of fabricated stories and rumour. It definitely affected us. Now, we’ve retained our dignity.”
“Because the World Bank raised the allegation of corruption even though it knew there was no corruption involving the Padma bridge project, they [the World Bank] are corrupt,” the agriculture minister, Matia Chowdhury, stated.
Health minister Mohammed Nasim also said that those who raised the allegation of corruption should be summoned before parliament. “Serve them with a notice to appear before the parliamentary standing committee,” he said. “We want to hold them accountable…. We want to make sure that no one dares assassinate anyone’s character and undermine the country’s image in future by making such false allegations.”
Many of these allegations reflected a Facebook post written a few days earlier by Sajeeb Wazed Joy, the Bangladesh prime minister’s son, that the Canadian court “has found no evidence of corruption in the project” and that “the evidence was based on ‘gossip and rumour’. In other words, it was made up. The evidence was fabricated by the World Bank.”
Joy also accused the Nobel peace prize winner Mohammad Yunus – a bête-noir of the current Awami League government, which has over recent years been constantly accused of corruption and other misdeeds – of being behind the decision of the World Bank to cancel its loan.
“Because of [Yunus], the World Bank attempted to stop the largest infrastructure project in Bangladesh that would benefit tens of millions of people and transform our south western region. Yunus deliberately tried to hurt Bangladesh using a foreign power,” Joy wrote.
Ten points to consider
However, in order to judge the accuracy of this political response to the ending of the Canadian court case, it is important to consider the following background about the court case and the World Bank investigation.
- The court in Canada did not find there was ‘no evidence’ of corruption in the project
Three Canadian citizens, two of them former officials of SNC Lavalin, were subject to prosecution in the Canadian court. The decision by the prosecutor not to proceed against these three men does not mean that there was no corruption in the project, or indeed that there was no evidence against these men. It only means that it was the prosecutor’s view that, without the wire-tap evidence, they did not think they could prove beyond reasonable doubt in a court of law that these three particular men had committed the offences to which they were charged.
- The court did not rule that the allegation of Padma bridge project corruption was based on ‘fabricated stories’, ‘rumour’ and ‘gossip’
The court ruling involved whether evidence obtained by wiretaps of the communications of the three accused should be admitted as evidence in court. In making its ruling the judge considered the bona fides of an application made earlier in 2011 seeking the wire tap. The judge ruled that the basis of this particular application made six years earlier was based on ‘speculation, gossip and rumour’. He did not rule that the case against these particular men or the more general allegation of corruption in the project was based on ‘speculation, gossip and rumour’.
- Case of ‘attempting to bribe’ was always going to be hard to prove
The case against these men was always going to be hard to prove since the World Bank investigation had itself stopped the alleged conspiracy in its tracks. The case in Canada hung on whether there was an intention or an attempt to bribe Bangladesh officials to obtain the contract; not on whether they had actually bribed the officials.
- Bangladesh government denials that any conspiracy was taking place were likely detrimental to the case
All things being equal, the Canadian investigation and prosecution authorities would have hoped that its case would have been strengthened by receiving evidence (or cooperation) from the Bangladesh government authorities. However, from the beginning, the Bangladesh government’s view was that there was no such criminal conspiracy and the issue became a matter of national pride. And whilst the Anti-Corruption Commission (ACC) – which is only technically independent from the government – did initially initiate investigations, it subsequently dropped the case claiming there was insufficient evidence
- The World Bank’s claim of corruption was factually based and not ‘made up’
We know something about the evidential basis of the claim of a conspiracy of corruption from a letter written in January 2013 by a high-level External Panel of International Experts that was established by the World Bank to review and assess the investigation by the Bangladesh ACC into the allegations.
The letter, which was delivered to the ACC, sets out a detailed chronology of meetings and conversations between officials of SNC Lavelin, Bangladesh civil servants and ministers.
It specifically refers to a meeting in May 2011, when two SNC officials visited Bangladesh and met with government officials after which one of the SNC officials wrote on a notepad under the heading “PADMA PCC”. “4% Min”; … “1% Secretary…” The letter said that ‘PCC’ was “a euphemism used by SNC Lavalin to indicate the cost of the bribes to be paid.”
The letter goes on to say that a couple of weeks after this meeting, the Bangladesh Bridge Authority (BBA) submitted to the World Bank an evaluation report recommending that SNC Lavalin be awarded the consultancy contract – even though SNC had at that time not provided the BBA all the necessary information.
Whilst the evidence set out in the letter may not in itself be sufficient to substantiate a criminal conviction of SNC Lavelin officials, it does appear to provide a genuine basis for making a legitimate claim (or indeed finding) of a conspiracy to corrupt.
6. The World Bank says that it provided the evidence to the Bangladesh government
In a statement given in June 2012, the World Bank says that it “provided evidence from two investigations to the Prime Minister, as well as the Minister of Finance and the Chairman of the Anti-Corruption Commission of Bangladesh (ACC) in September 2011 and April 2012. We urged the authorities of Bangladesh to investigate this matter fully and, where justified, prosecute those responsible for corruption. We did so because we hoped the Government would give the matter the serious attention it warrants.”
7. SNC’s willingness to sign a Negotiated Settlement Agreement with the World Bank suggests it accepted that its officials were involved in a conspiracy
In April 2013, following its investigation into the alleged corruption conspiracy involving the construction of the Padma bridge, the World Bank debarred SNC Lavelin and its subsidiary companies from bidding for World Bank contracts for ten years. The debarment was part of a Negotiated Resolution Agreement between the World Bank and the corporate group, which also requires that the company make changes in its operations to prevent corruption.
This is a very significant sanction, which also required it to make changes in the company’s operation, and arguably the company would not have agreed to it unless it accepted that the evidence collected by the World Bank was compelling. One of the four criteria that the World Bank considers before agreeing to a negotiated resolution agreement is ‘Whether an accused party has admitted culpability’.
Following the agreement, the president and CEO of the SNC-Lavalin Group issued a press release which stated, “the Company’s decision to settle signals our determination as we go forward to set standards for ethics in business conduct and for good governance that are beyond reproach.”
8. Apparent inconsistency between World Bank sanction and criminal acquittal can be explained
The Canadian court acquitted two company officials, but the World Bank imposed a ten-year sanction, which was accepted without contest by the company. This apparent contradiction, however, can be explained in three ways. First, the criminal court was looking at the criminal responsibility of particular individuals, whilst the World Bank was considering the responsibility of the company. Second, a jury can only convict if they are ‘sure’ or are ‘beyond reasonable doubt’ that a particular person has committed a crime, whilst the standard of proof used by the World Bank is equivalent to the usual civil standard requiring a ‘preponderance of the evidence’ or ‘balance of probabilities’ that misconduct has taken place. Third, whilst a criminal court has strict rules determining what can be considered admissible evidence, the World Bank uses flexible rules of evidence in making their determinations and considers any form of evidence, including circumstantial evidence, and is permitted to draw any inferences they deem reasonable from them.
9. The World Bank did not suspend the loan immediately on obtaining evidence of a conspiracy to corrupt
The World bank did not suspend its $1.2 billion loan immediately after obtaining evidence of the alleged corruption conspiracy. It sought to find a way to continue funding the project through “an alternative, turnkey-style implementation approach to the project” provided that the government “took serious actions against the high level corruption” it had unearthed.
The World Bank only suspended the agreement after the government was unwilling to adopt two of the four investigation measures that it had asked the government to comply with. These involved excluding certain public officials from public service for the duration of the investigation and accepting a formal relationship between the ACC and the World Bank external panel for the sharing of information.
10. There is no evidence that Yunus sought suspension of World Bank loan
In March 2011, the Bangladesh Central Bank sacked Yunus from his position as managing director of Grameen Bank and later that month the Nobel laureate lost his legal battle against the sacking. The government has alleged that, aggrieved by the government, Yunus proactively sought to get the World Bank to suspend its $1.2-billion loan by meeting with the World Bank president and speaking to Hilary Clinton, who was US secretary of state at the time and a strong supporter of Yunus.
Apart from making vague claims, the Bangladesh government has not provided any evidence to support its claims. Moreover, Yunus has also repeatedly denied any role in the World Bank decision and has stated repeatedly that “Padma bridge is a dream of the people of Bangladesh and that he would dedicate all his energy to realise this dream”.
However, it is quite possible that the Yunus imbroglio and the World Bank decision on Padma bridge may well have got linked – though not at Yunus’s doing. The US government was certainly angry with the way Yunus was treated by the Bangladesh government. It may well have been the case that, for this and other reasons, the US government saw no reason to bat for Bangladesh when the loan suspension issue came up before the World Bank board. This, however, is very different from arguing, as the government does, that Yunus lobbied to get the suspension or there was no objective reason to suspend the loan.