Australian journalist Nick McKenzie shows Alexandra Wrage, founder of TRACE International, a wall of people and institutions that he scrutinized to learn about practices in the oil industry. A new documentary, Bribe., Inc., explores the alleged wrongdoing that the investigation uncovered.Supplied by 1441 Productions
Peter W. Klein is former director of the University of British Columbia’s School of Journalism, Writing & Media. He is the producer and director of the forthcoming feature documentary Bribe, Inc.
During a trip to West Africa with a group of graduate students from the University of British Columbia a few years ago, a police officer pulled us over because the student in the passenger seat was not wearing a seat belt. “We take safety very seriously here,” he said without a hint of irony, as we watched a child steer a rickety horse-drawn carriage through speeding traffic. The fine was small, he explained, but the police station was closed so we’d have to stay overnight at the jail – unless we wanted to pay him directly, with an additional service fee. I handed over a small wad of cash, and we were on our way.
I recounted this story at a dinner with Alexandra Wrage, the founder of the anti-bribery organization TRACE International, as a humorous illustration of how common it can be to encounter innocent bribery when travelling. She was not amused and gave an example to illustrate why. In 2004, a Chechen woman bribed her way onto a Siberia Airlines flight from Moscow for the equivalent of $34, and was able to sneak explosives on board, blowing up the plane and killing 45 people. The example made me realize that it was because of people like me – who passed seemingly “innocent” bribes so many times before – that the well-worn practice allowed this terrorist to get away with her crime.
Then-president Donald Trump meets his Egyptian counterpart Abdel-Fattah el-Sisi in 2019, three years after Egypt allegedly tried to support the Trump campaign financially.Carlos Barria/Reuters
The question of what constitutes a bribe, and its implications, are issues in the ether.
Last week, The Washington Post detailed evidence that Egypt may have sought to funnel US$10-million in cash to Donald Trump’s 2016 presidential campaign, which led to a federal investigation. Last month, New Jersey Senator Bob Menendez was convicted of 16 counts tied to outlandish bribes.
When gold bars are used to pay off powerful politicians like the now-former head of the Senate Foreign Relations Committee, and a presidential candidate is tied to millions in cash payments from a foreign government, it gets attention.
But most of the US$1-trillion that are paid in bribes every year are through far less glamorous means – brown envelopes and offshore wire transfers – and they rarely garner much public attention, let alone prosecution.
Protesters turned out at the U.S. Supreme Court building in July after a ruling about whether presidents like Mr. Trump are immune from prosecution for their actions in office.Jacquelyn Martin/The Associated Press
The U.S. Supreme Court has also been grappling with bribery this past term. The recent decision on Mr. Trump’s immunity, which Justice Sonia Sotomayor called “disastrous,” has several interesting references to potential bribery of a president of the United States.
“When he uses his official powers in any way, under the majority’s reasoning, he now will be insulated from criminal prosecution,” Ms. Sotomayor wrote in her dissent joined by Justices Elena Kagan and Ketanji Brown Jackson. “Takes a bribe in exchange for a pardon? Immune.”
Interestingly, even Trump-appointed Justice Amy Coney Barrett, who voted in favour of expanded presidential immunity, warned that the majority opinion went too far when it came to introducing evidence to the court, and specifically referenced corruption.
Giving a hypothetical example of a president soliciting a bribe, she wrote that, “Excluding from trial any mention of the official act connected to the bribe would hamstring the prosecution.”
In late June, the Supreme Court made another controversial ruling that a US$13,000 “gratuity” paid by a trucking company to an Indiana mayor – after he awarded them a US$1-million garbage hauling contract – did not violate a federal anti-bribery law, since the payment was made after the fact. That case has led to suggestions that timing the payment after the favour is delivered could now be a loophole for bribe payers.
This could be a boon to an already lucrative, if shadowy, part of global commerce. According to the United Nations, 5 per cent of the world’s GDP is tainted by corruption. Even though virtually all countries have laws prohibiting the practice, many businesspeople and politicians still treat bribery as the “cost of doing business.” Bribes were, in fact, tax deductible as a business expense in many countries until not long ago.
Bribery affects about 5 per cent of global GDP, despite countries' efforts to stop it, according to the United Nations.Claudia Morales/Reuters
Modern laws prohibiting bribery date back to the late-1970s, when a young senator Joe Biden sat in the north wing of the U.S. Capitol challenging Daniel Haughton, then-chairman of Lockheed, the country’s largest defence contractor at the time, at a Senate hearing.
Mr. Haughton’s company had been caught paying tens of millions in bribes to foreign officials to secure lucrative contracts. One internal memo presented before the Senate committee showed a sales representative complaining about delayed contract negotiations, noting a “machinery stall for lack of grease,” a clear euphemism for the need for a bribe. When confronted by Mr. Biden, Mr. Haughton explained that this is how business was done by his competitors, so Lockheed followed suit.
“I’m a politician,” Mr. Biden said. “I’m in the business of getting elected, so I assume you’d condone my stuffing in the ballot box because my competitor is stuffing the ballot?”
“No, sir, I wouldn’t,” the Lockheed chairman said.
“I’d be curious to know why not.”
“That’s because in the first place, it’s against the laws of the United States of America,” Mr. Haughton said.
“Well, that hadn’t stopped you,” the young senator shot back.
U.S. President Joe Biden helped lay the foundation for anti-bribery laws that he would strengthen further from the White House.SAUL LOEB/AFP via Getty Images
Mr. Biden was technically wrong, since what Lockheed had done was not illegal at the time, if they disclosed the payments to federal authorities. But those hearings changed that, and led to the passage of the Foreign Corrupt Practices Act of 1977 (FCPA), the first law of its kind prohibiting any company with U.S. ties to pay or even offer bribes to secure business.
More than four decades later, as President, Mr. Biden went on to make anti-corruption a pillar of his administration, signing the Foreign Extortion Prevention Act, which addresses the demand-side of the bribery equation, making it illegal for a foreign official to request or accept a bribe from an American citizen or company.
Writing in The Hill, David P. Weber, former chief investigator for the U.S. Securities and Exchange Commission, joked that Disney World could become an effective law enforcement tool for the Department of Justice, since foreign dignitaries bring their kids to Orlando for family vacations, and those proven to be on the take could be hauled off from the Magic Kingdom to a federal prison under this new law.
By contrast, Donald Trump has been more liberal when it comes to payments for favours. There’s the infamous “hush money” paid to Stormy Daniels, which ultimately led to his conviction on 34 felony counts of falsifying business records.
He recently hosted oil executives at Mar-a-Lago, and according to The Washington Post, he asked them to donate US$1-billion to help him return to the White House – and pledged to reverse environmental rules passed during the Biden Administration and stop new ones from being enacted that could hurt the oil industry. Two Senate committees are now investigating whether this was a “quid pro quo” solicitation.
During his presidency, Mr. Trump tried to get rid of the FCPA, arguing it disadvantaged U.S. companies in global competition. According to Philip Rucker and Carol Leonnig’s book A Very Stable Genius, in a 2017 Oval Office meeting, Mr. Trump ordered his then-Secretary of State, Rex Tillerson, to do away with the FCPA – something Mr. Tillerson had no power to do.
It wasn’t the first time Mr. Trump railed against anti-bribery legislation. In 2012, as a businessman, he went on CNBC, calling the FCPA a “horrible law,” echoing the sentiment of the Lockheed chairman decades before about bribery, saying that “every other country in the world is doing it. We’re not allowed to do so. It puts us at a huge disadvantage.”
Ms. Wrage, TRACE International’s president, was invited on the air at the time to refute Mr. Trump’s critique of the law, and explained that American companies “never benefit from lawlessness,” and that the stability and predictability of working with law-abiding companies is actually a huge competitive advantage.
Ms. Wrage meets anti-corruption protesters in Iraq, where the fall of Saddam Hussein in the 2000s has so far done little to make the country more transparent and free of bribery.Supplied by 1441 Productions
I recently went with Ms. Wrage to Iraq to see exactly what she meant. After the U.S.-led invasion, there was widespread hope that Iraq would move beyond the culture of corruption that gripped the country for decades. But what we saw and heard in Baghdad painted a different picture.
On the streets of the city, the impact of bribery is palpable. Politicians showed us half-built buildings that stand for years, waiting, they say, for the right amount of “ar-rashwah” – bribes – to spur construction. In a hookah bar, we sat with an Iraqi veteran named Mohammad al-Badri, who lost a leg and a hand during the Battle of Mosul. “Fighting corruption is more intense than fighting ISIS,” he said, gesturing with his right stump. “ISIS is an enemy you face with a weapon,” one that he helped defeat. Corruption, he said, is far more formidable.
“My generation, we grew up in a post-Saddam time, and we thought this would be a new country,” said Alaa al-Sattar, a protest organizer we met in Baghdad’s al-Tahrir Square, which over the past several years has been flooded with young people demanding change. But, he said, Iraq’s leaders have not delivered on that promise, and “if nothing changes, they will be like Saddam Hussein.”
Ms. Wrage and I had been working with a team on a documentary about one of the biggest corruption cases in modern history – the story of Unaoil, a Monaco-based company that, according to the Department of Justice, spent decades bribing officials in Iraq and throughout the region, on behalf of major clients such as Halliburton, Hyundai, Samsung, Rolls-Royce and Honeywell.
They would likely still be serving as bagmen for multinationals, had it not been for an employee who reached out to an Australian journalist named Nick McKenzie, telling him to place a secret code in an ad in the French newspaper Le Figaro, if he wanted to find out about what Unaoil was up to. Mr. McKenzie travelled to Marseille for a clandestine meeting, where the whistle-blower, nicknamed “Figaro,” leaked hundreds of thousands of pages of internal documents. Many of the messages were written in code, referring to bribes as “holidays” – each “day” representing a $1-million bribe.
We spent several years working with Mr. McKenzie and “Figaro,” whose identity remains hidden for fear of retaliation. Together we delved into the complexities of this case, poring over hundreds of thousands of documents that eventually landed with law enforcement. England’s Serious Fraud Office took the law enforcement lead, and built a 50-person task force to not only prosecute the ones who owned and ran Unaoil, but to reveal the extent of corruption within the broader industry.
“We were getting a throughput of information that we’d never really seen before,” said Tom Martin, the lead prosecutor in the U.K. “A tantalizing opportunity to really break open what was going on in the oil and gas sector.”
Nick McKenzie boards a train to Marseille to meet the whistle-blower 'Figaro,' who is blurred out in the documentary to protect his identity.Supplied by 1441 Productions
The whistle-blower had shared his evidence with U.K., U.S. and other relevant authorities around the world, thinking law enforcement would work together for the sake of justice.
The opposite happened: Internecine battles between law enforcement agencies let this case largely slip through the cracks, with little to show beyond some “deferred prosecution agreements” for the multinationals, and plea agreements with the owners of Unaoil which led primarily to fines and a year-long prison sentence for the company’s former chief operating officer.
The takeaways from our years looking at the Unaoil case are grim. Prosecuting corruption is clearly difficult. These are global crimes that require global co-operation, which doesn’t always happen. The DOJ and the Securities and Exchange Commission proudly touts that in 2023 they had a good year, closing 14 cases, charging or indicting 11 people, and getting US$521-million in settlements. For an underground industry that takes up 5 per cent of the world’s GDP, though, those aren’t particularly impressive numbers.
The Unaoil case also showed how difficult it is to root out corruption in the first place. Bribes happen in the shadows, with everyone involved complicit in the crime. Most cases don’t have a whistle-blower willing to come forward to shine a light in the dark corners and decipher the codes.
And those codes and euphemisms are telltale signs of guilt. Lockheed executives talked about “grease” and “kickbacks.” The Indiana mayor in the SCOTUS case called it a “gratuity.” Mr. Trump had “hush money” paid. In internal communications, Unaoil managers used the term “holiday,” and referred to “consulting fees,” “offshore payments” and “inducements.”
But a bribe by any other name is still a crime.
Canvasing for Votes, detail from a 1757 print by William Hogarth based on his series of four paintings Humours of an Election.PUBLIC DOMAIN