BP sues over bribery claims

German steel giant targeted in lawsuit
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The Independent Online
BP has launched an unprecendented law suit against German steel and engineering giant Thyssen, seeking damages over alleged bribery and corruption in North Sea oil contracts.

Three subsidiaries of Swiss pumps group Sulzer are also among the 12 defendants named in a writ filed late on Friday in the London High Court.

Britain's leading oil firm is claiming compensation for loss, plus exemplary damages, over corruption in its equipment procurement department in the early 1990s.

The lawsuit has been over three years in the making and follows a series of Serious Fraud Office convictions of so-called "information brokers", rings of middlemen who bribed key staff on behalf of firms tendering for huge orders.

In all, contracts worth hundreds of millions were involved, though this was still just the tip of the iceberg as the SFO concentrated on cases where the evidence was stongest.

As well as BP, other blue-chip names such as Shell, Rolls-Royce and engineering and construction group Amec were also infiltrated, along with firms involved in the Channel Tunnel.

Thyssen and its German joint venture partner Mannesmann, another doyen of German industry, were named in the trials as having benefited from bribery, as well as Sulzer and several huge Japanese trading houses.

For the first time, BP has now moved against one of its own former staff, senior buyer Alan Owen, the mysterious "Mr X" in the first of the SFO cases in April 1993. "BP has been working on this since the end of the criminal trials. It feels totally let down by one of its former employees. It was a breach of trust," a company source said.

"BP also feels it has to pursue this to signal to other contractors that they are operating a totally level playing field," the source added.

BP is understood to have had no problems with the quality of the work but objects to the way in which the contracts were won.

The SFO prosecutions were some of the most successful the then beleaguered office had launched, securing 11 convictions in seven trials from February1992 to January 1994.

It then closed the book, however, and North Sea oil firms in particular are known to be extremely frustrated that other known bribery merchants were not pursued.

Britain's obstruction recently of European Union decision-making over the BSE crisis undermined initiatives to ban bribes Europe-wide, plans paradoxically that the UK supported.

The SFO investigation started with a tip-off from an engineer at Esso Chemicals after a pounds 100,000 bribery attempt. That was reported to Esso corporate security and a classic "police sting" followed, leading to the arrest of Josef Szrajber, a 74 year old, self-styled "information broker", at a bugged meeting at London's Inn on the Park hotel.

Polish-born Szrajber had turned up with a suitcase full of cash and in a raid on his Mayfair office in August 1990, police seized hundreds of documents incriminating a huge web of corrupt contacts.

Szrajber and an Italian associate, Paolo Sorelli, were eventually jailed for three years each in March 1993, after being found guilty of bribery charges involving 11 contracts worth up to pounds 100m for BP's Forties, Bruce, Miller and Gyda fields in the North Sea.

BP and other firms' hackles were raised, however, after Szrajber and Sorelli were pictured in the tabloid press playing tennis at the David Lloyd centre and Queens Club in London on weekend release from Latchmere House open prison. The two had met at a shooting party held by financier and property tycoon "Black" Jack Dellal, with whom Szrajber subsequently worked on his release from prison. It is not alleged that Mr Dellal had any involvement in the scam.

Mr Owen, it is alleged, was Sorelli's contact at BP and through Szrajber the trail led to a series of firms including Thyssen, Mannesmann, Sulzer and giant Japanese trading houses Itochu and Marubeni.

An Itochu employee was subsequently cleared of conspiracy despite admitting the charges. It was common practice at Itochu and other Japanese firms to pay middlemen to gain a contract edge, the court heard, and the employee, Shigeki Furatate, only inherited established practice.

The trial meanwhile of a Marubeni executive was cancelled after he skipped bail and fled to Japan.

One of the largest contracts was a pounds 33.5m one for the replacement of BP's Forties export pipeline, which Thyssen's steelmaking subsidiary Thyssen Stahl Union won after allegedly paying pounds 1.4m of commissions. The money trail, the court was told, flowed through Sorelli and Szrajber's Swiss- Panamian firm, Astar International, to Mr Owen.

Szrajber, Sorelli, Astar and another broker, Jim Lillie, who allegedly acted as an agent for Sulzer, are all defendants in BP's new civil lawsuit, as is Mr Owen's wife Margaret.

Mr Lillie's company Sureland is also named as well as Walter Dettweiler, an alleged Szraj- ber agent based in Geneva.

BP's lawsuit is the latest in a series of blows to Germany's corporate establishment. Last year, Thyssen's offices were raided by German police in connection with an investigation into alleged kickbacks paid to Canadian politicians over an Airbus deal.

Mannesmann's former chairman, Werner Dieter, was also investigated over alleged fraud, while his company was barred from the Norwegian sector of the North Sea after a bribery scandal involving state-owned oil firm Statoil in 1992.