SUJAY GUPTA
In an interview which throws fresh insights into the bribery payments to Goa ministers, LBG reveals that a “sub-consultant” firm was paid money from an Indian account without the authorisation of the Global company. More than one such sub contract was signed with the same “sub-consultant”. LBG hasn’t revealed to Herald, the name of the sub consultant who had made the payouts which were eventually made to “beneficiaries”. This and more in this first one-on-one interview by LBG to any media.
Herald: The Louis Berger bribery scandal, is the most visible and volatile of corruption cases highlighted in Goa for quite a while. Can you take us back to how and when corrupt practices in your company were red flagged?
Regine de la Cruz Vice President: Corporate Communications, Louis Berger Global: LBG is actually the operating company that manages activities for the US government. The corporate entity is Berger Group Holdings, Louis Berger International is a US company that does work outside of US. We carried out our internal investigation. When there were indications that there may have been issues of improper payments, the company conducted interviews with the managers James McClung the Senior Vice President in charge of India at the time of the incident and his management team, which included Satyakam Mohanty (out on bail after being arrested by the Goa Crime Branch) and the business development managers. They either refused to participate in the interviews in the investigation process or provided information that the company did not find credible. James McClung and his management team were separated from the company following the findings of our initial investigation. So the company conducted investigations under the oversight of the department of Justice. We hired an independent legal firm with global expertise in uncovering corrupt payments. Since the former managers declined to participate in the process, we have had to rely on the investigations by the forensic accountant and the legal firm.
Herald: So can you then conclude, and so can we, that McClung , Mohanty and the India team were working as rogue elements outside your system?
Regine: That’s absolutely true. Not only were they working outside the corporations policies and procedures (but) when the company was carrying out its investigations, there were efforts made by these managers to hide their activities from the corporation including the use of unauthorised private emails.
Herald: How did McClung get money out of the company? The money that was paid wouldn’t have been paid from his or his teams personal accounts. The money that was paid as a bribe came from somewhere. And who were the beneficiaries?
Regine: The files that were uncovered did not include beneficiary names because they were withheld by former managers who didn’t ..(pauses) .. the payments were made (she explains later who they were made to) under the purview of these former employees, McClung and his management team from Indian based accounts from where funds were sourced which were under the purview of McClung and his management team….
Herald: With no knowledge of the global corporate?!!
Regine: We were much more decentralised then. Now there is an oversight on Indian accounts from here with a live tracking and red flagging.
Herald: I’m trying to understand whether your investigation led you to the source of the money which was paid by Louis Berger.
Regine: Based in our investigation, a sub consultant served as the conduit for payment. (obviously the bribe payment). It appears that funds were moved… there is a contract Louis Berger India had with a sub consultant and that sub consultant we believe was the conduit for those payments. The funds for that contract was sourced from an account in India which was controlled by McClung and his management team and those payments were made without the knowledge of the global headquarters.
Besides those payments that were under the purview of McClung and his management team who refused to cooperate with the investigation… the company does not know what happened after the money went to the sub consultant and since McClung and his team refused to cooperate. What we were able to establish was an appearance of impropriety.
Herald: I want to hang to this for a bit. You are saying money was moved out of a company account to sub consultant and you didn’t know. When action was taken against McClung and his team, obviously someone else took over the India account. So didn’t you track the monies that went to the sub consultant?
Regine: The company was able to track the money that went to the sub consultant… but was not able to track what happened thereafter.
Herald: What was the amount that went to the sub consultant?
Regine: I will have to get back to you on that. I do not have actual number in front of me. But it looks like that there was more than one contract with the sub-consultant. This was partially uncovered from the emails sent out by McClung and his management team and a consortium partner (Herald wonders: Which is this consortium partner. Could it be Prasanna Shah of Shah consultants who indeed has been questioned.)
Herald: Do you know the names of the beneficiaries. And was there one minister or two who was paid the bribes
Regine: The emails we unearthed did not contain beneficiary names. And we do not know the names. But I can double check and get back. (Herald waited for three days. LBG has been in touch with Herald, regularly informing that this will take a bit of time since the formation is being vetted by their legal team)
Herald: Have the authorities in Goa got in touch with you directly?
Regine: We have been in touch with Goa Crime Branch and cooperating with the crime branch. We conducted a self investigation and shared that with the US government. We are committed to having the same level of transparency with all the authorities in India. Our legal team is interacting with the Indian authorities.
Herald: Were you able to reconcile and align the amounts that you finally discovered were illegally paid out by the rogue elements in your company, with the emails exchanged by the rogue elements, which your investigating team unearthed where these payments were discovered.
Regine: As I said, I do not have the dollar to dollar figure that was paid to the sub-consultant but we are able to tally the total amount that was paid out, with the amounts that were mentioned when all the emails exchanged were scrutinised (her exact words in this response have been slightly altered but we have paraphrased it accurately for readers to get a better sense of what she meant)
Herald: Did the sub-consultant deal with payments in Goa or also in Assam?
Regine: I’m speaking to you, only about Goa.
Herald: What other criminal action have you initiated against James McClung, since they siphoned off company money?
Regine: The company is assessing its options. But he is separated from the company since 2012. The impact has primarily been reputational. We are a different company today than in 2010. Our ownership and leadership has changed, our organisational processes are strict, there are new systems and a comprehensive compliance programme. We are a better company today than in 2010. But the sins of the past are reflecting on the company that we have today. The fact we have self reported and done our own investigations has gone under reported.
Herald: How much business have you lost?
Regine: We have not lost any additional work, as much as the impact this may have had on our reputation and this could have future impact. So we are cautious of that.
