Washington: Executives of the American firm — Louis Berger International Inc — allegedly bribed Indian officials to secure the Goa project, paying around $976,630. Two former executives – Richard Hirsch (61) of Philippines, and James McClung (59) of the UAE – of the US based construction management company Louis Berger, recently pleaded guilty to bribery charges to obtain contracts. The sentencing hearings for Hirsch and McClung are scheduled for November 5 this year. McClung previously served as senior vice president responsible for the firm’s operations in India and in Vietnam and that’s where the problem lies – They are said to have bribed several officials including ministers  to secure two major water developmental projects in Goa and Assam. The US justice department has so far not released the names of the officials that were paid the bribes, but which could be a matter of investigation by the CBI, after the Defence minister Manohar Parrikar called for it, based on available information. The alleged bribery seems to have occurred during the previous state govt.’s regime, at which time Digambar Kamat was the Chief Minister and Churchill Alemao was the PWD minister.
Reports suggested that these bribes were discovered during an internal investigation done by the US company, which then reported it to the authorities. The bribe amount is reported to be just under $1 million dollars (about Rs 6 crore rupees in the current exchange rate).

The company has agreed to pay $17.1 million criminal fine to resolve charges that it bribed officials in India, Indonesia, Vietnam and Kuwait to secure government construction management contracts.

The company took responsibility of the actions of its former managers in an official statement.

“The DOJ has acknowledged the extensive global reforms undertaken at Louis Berger since 2010,” said Nicholas J. Masucci, Louis Berger chairman. “2010 was a pivotal year in our company’s history. It marked a clear departure from the past as we assumed new management, new processes and comprehensive system reforms that are the core of our global operations today. Today’s settlement is the critical final milestone in our reform, as it was important for us to take responsibility for the historic actions of former managers and close the chapter on the company’s pre-2010 era.”

Goa Project:

The Indian and Japanese government joined hands for a five-year project to improve Goa’s water supply and sewerage by expanding, rehabilitating, and building water and sewerage facilities.

Louis Berger was part of a consortium for the project that included two Japanese firms and an Indian partner.

The team developed a project management information system and plan, evaluated bids, reviewed design and construction plans, and ensured quality work was done on time and within budget, the company says on its website.

Guwahati Water Project:

According to reports, Louis Berger is in-charge of the technical monitoring of a water supply project that is still in process in Guwahati, and is likely to be completed next year. The project aims to provide round-the-clock water supply to residents in the city, and the Japan International Cooperation Agency (JICA) is financially assisting the implementation. Louis Berger here is a consultant for the Guwahati Metropolitan Development Authority (GMDA).

The Bribery trail:

Federal prosecutors, in their 11-page charge sheet, alleged that Louis Berger maintained a detailed diary and account of bribery made to Indian officials.

On August 26, 2010, “a consortium partner prepared a payment tracking schedule stating that the company had paid $976,630 in bribes in connection with the Goa project to date,” federal prosecutors told a court in New Jersey.

On August 17, 2010, a consortium partner sent an e-mail to James McClung, stating, “As discussed I enclose the details as provided by [third-party intermediary]. I have also added the details of amounts paid to [the Company] as of date by [the consortium partner] in the same sheet.”

The attachment included an entry, “Paid by [an agent of the company] to minister on behalf of agent,” said federal prosecutors.

According to court documents, the company, through its employees and agents, together with others, used terms like “commitment fee,“ ”counterpart per diem,“ ”marketing fee“ and ”field operations expenses” as code words to conceal the true nature of the bribe payments and utilised cash disbursement forms and invoices which did not truthfully describe the services provided of the purpose of the payment.

Louis Berger has offices in India since 1998, currently in Gurgaon, Mumbai, Chennai and Hyderabad.

“Along with several consortium partners, the company won two water development projects in Goa and Guwahati. The company paid bribes to win both of these contracts,” federal prosecutors alleged.

According to court documents, the company through its employees and agents and its consortium partners kept track of the bribe payment by a circulating spreadsheet among themselves showing the proportionate share of each bribe that they had paid to the foreign officials overseeing their work on the Goa and Guwahati projects.