Mining giant Glencore sent cash bribes to Africa via private jet, UK court hears | glencore
Glencore paid cash bribes to officials in Africa via private jet amid ‘endemic’ corruption at the mining company, a London court has heard in sentencing of the first-ever conviction of a British company for bribing another person.
Third-party agents used Glencore money to bribe officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan, causing damage worth $128 million, it said. a sentencing hearing at Southwark Crown Court.
A UK subsidiary of the FTSE 100 company pleaded guilty in June to five counts of bribery and two counts of failing to prevent bribery brought by the UK’s Serious Fraud Office (SFO).
SFO lawyer Alexandra Healy KC told the court that Glencore was involved in paying bribes worth $27 million. The $128m damages were worth £81m at the time of the breaches and were “cleared to a higher level”, Healy said.
The SFO reviewed more than a million documents, including numerous email and WhatsApp instant messaging conversations, and conducted 16 interviews as part of the large and complex investigation. Former Glencore boss Ivan Glasenberg, who was chief executive throughout the breaches, was not among those interviewed by the SFO.
In a sign of the case’s importance to the SFO, its manager, Lisa Osofsky, visited the case team at Southwark Crown Court ahead of the hearing.
Glencore chairman Kalidas Madhavpeddi attended the hearing in person, which Glencore lawyer Clare Montgomery KC described as the mark of a “culture shift” at the company.
“The conduct was inexcusable,” Montgomery said. “The company unreservedly regrets the harm caused by these breaches.”
The bribery was first detected by the FBI in 2017 and Glencore agreed in May to pay US authorities $1.1 billion for violating bribery laws and manipulating commodity prices.
Southwark Crown Court judge Mr Justice Fraser is expected to convict Glencore Energy UK Ltd on Thursday, taking into account the harm Glencore has admitted and other factors such as the company’s culpability.
Healy argued that it was a more serious offense because the company was playing a “leading role in an organized, planned and illegal activity” that was “authorized at a higher level”.
However, Glencore expects the penalties it is likely to pay in the UK to be lower than in the US. In May, it said it did not expect to have to set aside more than its previous provision of $1.5 billion to cover all corruption-related costs.
The court heard detailed descriptions of how Glencore and its agents repeatedly sought to bribe officials. On one occasion, an agent told Glencore to speed up cash payments because it had “staff to make happy before Christmas” – a reference to a bribe in Nigeria. On another occasion, a Glencore agent bragged in an email that he had secured deliveries of crude from Equatorial Guinea’s state-owned oil companies after using family connections to meet the country’s president, Teodoro Nguema Obiang, who has ruled the country since 1979.
Glencore employees have also been directly involved in withdrawing cash to be used in bribes. The SFO has successfully requested that several former employees and agents be anonymized during the trial as it considers new charges.
The SFO detailed how a Glencore trader on the West Africa desk withdrew a total of €6.3m (£5.4m) in cash from the company’s cash desk at Baar, Switzerland, to finance bribes on 25 occasions between 2012 and 2015. These withdrawals had to be signed by senior executives, one of whom was a “business ethics officer” from Glencore and l The other was a member of the company’s “business ethics committee”.
In South Sudan, Glencore officials flew into the country on a private jet shortly after its independence in 2011 with $800,000 in cash. This money was falsely described as being for “opening an office in South Sudan, money for office infrastructure, salaries, cars, etc. but was instead given to agents who used it to bribe officials.
“In the days that followed the arrival of money in [the capital] Juba, August 2, 2011, Glencore’s fortunes have changed” and it has landed valuable contracts, the SFO lawyer said.
Healy said there was “a stark contrast between the company’s true culture and that embodied in” its anti-money laundering policies.
The SFO conducted 72 hours of interviews with Anthony Stimler, a former Glencore trader who confessed to being charged with corruption in the United States last year. Stimler said “the corruption I witnessed at the time, and was involved in in my second phase, was condoned” by a senior Glencore employee.