Wondering What The Airbus Bribery Scandal Is About? Here’s A Breakdown

Airbus Factory in Illescas, Spain (photo: AeroTime)

The Airbus bribery scandal has been the number one trending topic in Ghana for about three days now.

But, what is the Airbus bribery scandal about and why is Ghana involved in this issue?

Here’s a breakdown of the Airbus Bribery scandal:

Firstly, what is Airbus?

Airbus is an European multinational aerospace corporation. In 2019, Airbus was the world’s largest airliner manufacturer and took the most airliner orders. Airbus is registered in the Netherlands; its shares are traded in France, Germany and Spain.

Ghana purchased three aircraft from Airbus

Ghana bought three military airplanes – C295s – from Airbus. The nation received its first C295 in November 2011. The second aircraft was received in April 2012 and the third in November 2015.

The deals covering them were argued at the time to be in line with the 2009-2012 Strategic Plan of the Ghana Armed Forces.

All three purchases, approved by Ghana’s Parliament after heated disagreements on the floor, were roundly marketed by the government of the day as a drive to modernize Ghana’s Air Force.

Funding for the purchase of aircraft

Funding for the first two C295s came from a €60,034,636 loan facility from the Deutsche Bank S.A.E.

A further €11,750 million loan from the Fidelity Bank Ghana Limited was also approved by Parliament during the period for the acquisition of two DA42 MPP Guardian surveillance aircraft for the Ghana Airforce.

The House also approved a total loan sum of $105,370,177.09 from the Brazilian Development Bank (BNDES) for the purchase of an Embraer E190 jet for the country. The Embraer agreement was to cover related spare parts, relevant accessories as well as the construction of an aircraft hangar big enough to house three large aircraft.

Prior to the Parliamentary approval of the loan agreements, then Minority Leader, Osei Kyei-Mensah-Bonsu had slammed the deals as both questionable and non-transparent, adding that the contract sums had been padded by the government.

He famously tabled figures obtained from the internet to back his claims but was scorned for doing no more than relying on Google to come up with such serious claims of wrongdoing.

One of the C295s acquired under the deal supported United Nations-led missions in Mali. The rest were bought, as the Government explained at the time, to support strategic operations of the Ghana Air Force including surveillance of the country’s offshore oil production fields, border patrol, the training of pilots and internal transportation of troops.

In November 2014, then-President John Mahama had announced that Ghana planned to acquire more military equipment, including five Super Tucanos, Mi-17s and four Z-9s, for the Ghana Airforce.

At the time, Ghanaian troops were said to have relied heavily on civilian flights for their movements and needed military aircraft to correct this anomaly. Despite opposition criticisms, the government went ahead with the purchase agreements.

UK Court’s judgement

The recent judgement by England’s Crown Court in Southwark would appear to have now given a new life to earlier suspicions that the agreements covering the C295s especially were corrupt. The January 21, 2020 decision approved a Deferred Prosecution Agreement (DPA) between the Serious Fraud Office and Airbus SE, a subsidiary of Airbus, after investigations exposed massive bribery scandals involving the aircraft manufacturer in breach of the Bribery Act 2010.

English law allows the SFO to postpone prosecution of an organisation based on an agreement between the SFO and a company or companies suspected to have committed economic crimes.

Such an agreement – (DPA) – requires a seal of Judicial approval to become lawful and may even allow the offending institution to avoid prosecution entirely.

The court, in its decision on such applications, considers among other things, whether or not the DPA before it is in the public interest.

Also, the terms of the agreement must be fair, reasonable and proportionate.

In the present case, the court found that the DPA is in the public interest and that the terms agreed to meet the tests of fairness, reasonability and proportionality.

The court took the view that prosecuting Airbus now would among other things, lead to massive job losses and decimate the company’s performance on the stock market in the immediate to long term.

Independent estimates suggest Airbus could easily haemorrhage some £200 billion in the long term if it faced prosecution immediately.

The judgement stated that SFO investigations found that Airbus — which has since agreed to pay over £3 billion in fines — had engaged in schemes that involved bribing its way to lucrative contracts in countries such as Malaysia, Sri Lanka, Taiwan, Indonesia and Ghana.

French and US authorities have also found similar evidence of alleged bribery involving Airbus officials and or their agents in other countries, including Russia and China.

Ghana’s involvement in the scandal

In the case of Ghana, the Judgement of the Crown Court highlights instances where Airbus officials, as part of a scheme to obtain and or maintain contracts with the government, either bribed or agreed to bribe intermediaries with close links to a high-ranking state official said to have influence over the country’s aircraft purchase plans between 2011 and 2015.

The court documents did not mention any names but the timeframe stated in the judgement covered some periods of the Mills-Mahama era.

The first agreement to pay bribes in Ghana was to involve some €5 million which was disguised as a Commission to an intermediary – “intermediary 5” – engaged by Airbus to promote its proposal to sell two C295 aircraft to Ghana.

Eventually, due process tests exposed the dubious arrangements and no money was paid.

Subsequent approaches by Airbus succeeded, resulting in Ghana buying 3 C259 aircraft through the multinational’s Spanish defence subsidiaries at separate times.

The deals were arranged through a number of intermediaries led by “intermediary 5”, said to be an unnamed relative of a powerful Ghanaian official who, at the relevant time, was in a decision-making position over the proposed aircraft purchase agreements.

However, after an internal investigation exposed the link between intermediary 5 and the unnamed high ranking government of Ghana official, a scheme was then hatched by the parties to route the transaction through a third party company of Spanish origin, which company had no previous dealings with Ghana.

The Spanish company was passed off as the facilitator of the proposed aircraft purchase agreements when in fact it was merely inserted into the arrangements to circumvent due diligence requirements in order to give the questionable transaction a clean bill of health. Upon conclusion of the deal with Ghana, under which two aircraft were initially sold, Airbus or its agents relied on false representations and documentation to pay bribe amounts close to €4 million to the Spanish third party company which in turn funnelled the payments to intermediary 5.

The payments were disguised as commission on the contract amount. The Spanish third party company pulled out of a subsequent deal that handed Ghana her third C259 aircraft. This was after Airbus had engaged an external counsel to conduct due diligence on it. Intermediary 5’s subsequent claim that Airbus owed him some €1.6 million under the deal covering the third C295 was not honoured.

The DPA does not mean the Airbus and its officials are immune from prosecution for the alleged crimes.

Under English law, the SFO is entitled to, in due course, prosecute Airbus if it is satisfied that the company failed to comply with the terms of the DPA approved by the Court.

Indeed, ongoing investigations mean that while the SFO might, in the light of Airbus’ cooperation thus far, forgo prosecuting the aircraft manufacturer, it may, after the investigations bring criminal actions against the persons who actually paid or received the bribes complained of.

Such a move is likely to include the intermediaries in Ghana and related individuals.  In such a case, the SFO may rely on Mutual Legal Assistance (MLA) provisions under English law to mount the relevant charges.

See Also: Ghana Air Force Aircraft Crashes During A Routine Engine Run

source: citinewsroom

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