Photo: From left: President of 3S Barbados SRL, Jonathan Danos, Minister of Public Works and Transport Gline Clarke, and Minister of State in the Ministry of Finance Clyde Mascoll
Danos Explains How Bridge & Flyover Kickbacks And Bribes Work
If you want to know why our flyover and highway work costs so much, you need do nothing more than listen to Jonathan Danos – the President of the company that was awarded the flyover contract by the Barbados Government without a competitive bidding process.
Mr. Danos is involved in a very messy court battle with his old employer, Britain’s Mabey and Johnson Limited bridge builders. In recently filed court documents, Mr. Danos explains how he paid huge bribes to politicians’ middlemen so that the respective governments would award the contracts to Mabey and Johnson Limited.
On behalf of Mabey and Johnson Limited, Mr. Danos says he paid secret commissions of 8.5%, 17% and 15% to middlemen in Jamaica, Dominican Republic and Panama, respectively. According to Danos, this is standard operating procedure in his business when dealing with small governments.
For instance, if a Caribbean government wants to build a series of bridges that should cost say, 100 million dollars, the price is raised by the amount of the bribe. In our example of an 8.5% bribe, the project price would be raised to 108.5 million dollars. The government would borrow or use tax revenues to pay Danos 108.5 million dollars. Danos would build the bridges but would pay the extra 8.5 million dollars to various middleman companies for “consulting” or other non-existent services.
Guess Who Owns The Middleman Companies?
Ha! You guessed it… the politicians who awarded the bridge contract to Danos in the first place own the “consulting” companies.
What a great scam. The politicians who awarded the bridge contract pocket 8.5 million dollars in their offshore bank accounts and the poor sucker taxpayers are stuck paying for the politicians’ bribes as well as the over-priced bridges.
Now remember, folks… this not our speculation. This is Jonathan Danos admitting under oath in court that he paid these “secret commission” bribes for bridge projects in Jamaica, Dominican Republic and Panama. In Jamaica the bribe amounted to almost US$ 4 million dollars.
And what about the famously over-budget flyover and highway project in Barbados?
How Much Did Jonathan Danos Pay In Bribes For Our Barbados Flyovers?
When the Owen Arthur government awarded the flyover project to Danos’ company, 3S Structural Steel Solutions, it did so without putting the project out for bidding. Owen Arthur and the gang simply awarded the contract then valued at BDS$120 million to Jonathan Danos.
Gosh… Owen Arthur must have taken a shine to Danos for some reason – especially considering that Danos’ company was brand new formed in 2005 and had never built anything at all, let alone flyovers and highways.
But for some reason the government awarded the contract to Jonathan Danos. Of course, the project has since skyrocketed from $120 million to $360 million or so.
Ten Percent Of $360 Million Is…
We at Barbados Free Press have been trying to guess what percentage of the flyover project costs are being diverted by Jonathan Danos to offshore companies owned or controlled by Barbados Government members and officials. We think that 17 percent kickback as Danos provided in the Dominican Republic scam would be way too much for a large project like the Barbados flyovers, while 8.5 percent like he paid to a Jamaican middleman might be a little low.
How about 10 percent? That would be a $36 million dollar kickback paid to Barbados politicians and government officials. As Danos explains in his sworn court documents, his method of doing business would be to pay middlemen and their companies for non-existent services – with the monies going to the government officials who awarded him the contract without public tender.
So how about it, Prime Minister Owen Arthur, Minister of Public Works and Transport Gline Clarke, and Minister of State in the Ministry of Finance Clyde Mascoll… where should we be looking for your offshore bank accounts and “consulting” companies? New York? London? Nigeria?
No wonder that Prime Minister Owen Arthur recently said, “I’m motivated in a special way by the determination never to see the DLP hold the reins of office in this country.”
Indeed! Arthur and his gang are desperate to win because if the DLP forms the next government, there will be hell to pay when they start auditing the BLP projects and following the money trails.
From The Guardian Unlimited…
Court battle over secret export commissions claims
· Company accused of circumventing bribery law
· Ex-manager denies kickbacks and fraud
David Leigh and Rob Evans
Wednesday January 2, 2008
One of the richest families in Britain is being accused in a courtroom battle of circumventing anti-bribery laws.
The Mabey family firm, whose worldwide empire is based on exports of steel bridges, is accused by its former sales manager of misconduct in sales to Jamaica, the Dominican Republic and Panama.
The former manager, Jonathan Danos, says that large secret payments of “commissions” to middlemen were artificially split to make them look smaller, and thus avoid official scrutiny.
In all three countries, there was no competitive bidding for contracts, profits were alleged by him to be exceptionally high, and the money had to be borrowed from commercial banks, adding to the heavy debts of poor countries.
Many of Mabey’s sales are backed by the British taxpayer. The loans were guaranteed by the Export Credits Guarantee Department (ECGD), which is part of the Department of Business, Enterprise and Regulatory Reform.
While Danos is making accusations against the company, he himself is being sued by the firm for allegedly pocketing hundreds of thousands of pounds for himself in corrupt kickbacks on the deals.
Mabey got a freezing order preventing the sale of Danos’s luxury home in Notting Hill, west London, last year and went to court. The high court said in a preliminary hearing there was “strong prima facie evidence” of fraud by him.
But Danos, who was awarded the MBE in 2000 for services to British exports, has denied all the claims, and retaliated by filing a detailed account of the devices he alleges were used by the firm to get around anti-bribery laws passed by the British government.
Excessive commissions are a common means of passing on bribes. As a result, British and US authorities generally frown on payments above 5%.
Danos claims that he was ordered to divide an 8.5% commission to be passed to a Jamaican businessman, Deryk Gibson, into two parts – a commission of 5%, and another 3.5% for non-existent “local services”. He was also ordered, he alleged, to similarly split a 17% commission for a deal in the Dominican Republic, where the agent is named as a local businessman, Gilberto Pagan. In a third set of deals, in Panama, commissions were paid at 15%, he alleged, to a bank account in the Bahamas allegedly controlled by another agent, Rogelio Dumanoir.
The Jamaica allegations will be particularly dismaying for the ECGD. Its advisory council conducted a special review of the £17m Jamaica guarantee in 2003, under pressure from anti-corruption campaigners, and concluded: “There is no great cause for concern.”
The then trade minister, Richard Caborn, said at the time: “I am pleased … This work will benefit the people of Kingston and rural areas”.
A Mabey director, Richard Glover, later unsuccessfully tried to persuade the ECGD that the firm should be allowed to keep its agents’ identities secret.
He wrote in 2005: “Exporters should be free to pay legitimate commissions to their agents without the burden of the obligation to provide ECGD with details that are often confidential and commercially sensitive.”
In his court filings, Danos paints in rarely seen detail a picture of a company that regularly paid huge sums to confidential agents to make sales around the world, although he does not directly accuse them of bribery. He says the firm’s founder, Bevil Mabey, who is 90, “established close relationships with high-level officials … and even in some cases vice-presidents and presidents”.
But when Britain passed an anti-bribery law in 2001, the founder’s son, David Mabey, changed the company’s procedures. Danos says he was told the “artificial split” in commission was “as a result of a need to comply with” the law, the Anti-Terrorism Crime and Security Act 2001. US lawyers gave advice, Danos claimed, that commissions above 5% would also lead to suspicions by the US authorities of “bribery or inducements”.
The Mabey companies have previously been accused by anti-corruption campaigners of overcharging for sales of bridges and flyovers in the Philippines and Papua New Guinea.
They are still also under investigation by the Serious Fraud Office over allegations of kickbacks paid to the Saddam regime in the oil-for-food scandal. The UN Volcker report alleged that Mabey paid $202,000 (about £102,000) in return for a $3.6m Iraqi contract. The company says there is no truth in the allegations.
The Mabey family is estimated to be worth £310m. The most recent accounts show family members drew out £7m in personal dividends in the last year. The company regularly donates to the Conservative party.
A spokesman for Mabey said: “This case is about an alleged fraud on the company. We take the strongest possible action against employees and former employees who breach our policy or the law.
“This case is not about allegations of bribery and corruption. However, we have not, do not and will not pay or authorise the payment of bribes or any other form of unlawful inducement. We have a comprehensive anti-corruption policy with procedures which are vigorously enforced.”
Mabey is negotiating with Danos in private to try to settle the case before it comes to court.
Anti-corruption campaigner Sue Hawley, of the Corner House group, said last night: “Mabey has consistently been accused of sharp practices, and untransparent contract procedures.
“If companies can evade scrutiny of their commission payments by hiding them away as ‘local services’, this would blow a very large hole in the ECGD’s anti-corruption processes.”
Read the original story at the Guardian Unlimited (link here)