A nine-year international corruption investigation has resulted in the arrest of an Australian former executive over his alleged involvement in a $1 billion graft scandal.
The investigation focuses on allegations of bribery involving $730 million in illicit payments between international oil companies and Iraqi officials via an intermediary firm called Unaoil, which posed as a consultancy.
Australian Federal Police said the arrest of Brisbane man Russell Waugh was the result of a painstaking investigation involving British and US authorities examining bribes and bribery attempts allegedly aimed at Iraqi Oil Ministry officials and staff at an Iraqi company.
Warrants for two other men, who do not live in Australia, have also been issued.
Federal Police revealed that a tip from Australian company Leighton Holdings in 2011 about irregular payments made by its Singapore-based subsidiary, Leighton Offshore Pty Ltd, sparked the investigation, code-named Operation Trig.
Over the course of more than nine years, Operation Trig saw the seizure of over two million documents and the gathering of evidence from 10 countries. A number of bribery convictions were secured in collaboration with law enforcement agencies around the world.
Mr Waugh, 54, was the managing director of Leighton Offshore. He was arrested on Wednesday morning and charged with two counts of foreign bribery, and also charged under the Corporations Act with allegedly falsifying books and providing misleading information.
Mr Waugh, allegedly the mastermind behind a plot between March 2010 and mid-2012 to bribe Iraqi officials in return for US$1.02 billion of government pipeline contracts, appeared in court in Queensland and will be extradited to New South Wales, where Federal prosecutors want to try him in a Sydney court.
He appeared via video link, without a lawyer, and did not contest the extradition order.
Among his bail conditions, Mr Waugh was ordered not to have any contact with more than 45 people who will be called as witnesses in his trial.
It will be alleged that he participated in elaborate schemes to bribe Iraqi officials to secure oil contracts worth billions of dollars.
Former Iraqi oil and energy minister Hussain Al Shahristani, has been accused of involvement in thealleged Leighton bribes.
Dhia Jaffar Al Mousawi and Oday Al Quraishi were two other Iraqi officials implicated, having allegedly received bribes in return for supporting Leighton Offshore’s bids.
In 2016, a leak of confidential documents exposed massive corruption within the oil industry, implicating dozens of leading companies, bureaucrats and politicians in an international web of bribery.
In February 2019, David Lufkin, who served as head of global sales at British oil services corporation Petrofac, pleaded guilty to 11 counts of bribery in a London court, after being investigated by the UK’s Serious Fraud Office. Like Mr Waugh, Mr Lufkin was also accused of trying to secure hundreds of millions of dollars’ worth of contracts by offering bribes.
At the centre of the scandal was Unaoil, a family business from Monaco, which despite having a low public profile, distributed vast sums of money as bribes on behalf of corporate giants including Samsung, Hyundai, Rolls-Royce, Halliburton and Leighton Holdings. Fairfax Media and the Huffington Post collaborated on a six-month inquiry and obtained a trove of documents revealing the extent of the scheme.
In October this year, Iraqi-born British national and former Unaoil executive Basil Al Jarah was sentenced to three years and four months in prison for bribing Iraqi officials to clinch US$1.7bn worth of oil projects in Iraq.
Mr Al Jarah, Unaoil’s former Iraq country manager, admitted to paying US$17m in bribes to secure contracts to construct oil pipelines, an oil platform and offshore mooring buoys in the Gulf.
Muted Iraqi response
In 2016, Iraqi authorities ordered an investigation into the allegations, but since then Mr Al Shahristani and Mr Al Mousawi have not been convicted of any wrongdoing, an Oil Ministry official told The National.
For Iraqis, the investigation is still underway in cooperation with the Australian and American authorities, another official at the Iraqi Integrity Commission said.
Judicial authorities have issued three arrest warrants against Mr Al Quraishi, who was in charge of the project in question, Mr Al Mousawi, the General Director of the Engineering Department at South Oil Company and Mr Al Jarah.
While Mr Al Jarah has been brought to justice in the UK, Mr Quraishi and Mr Al Mousawi are still at large. All officials spoke on condition of anonymity in line with regulations.
Unaoil middleman, Ahmed Al Jibouri, was also a central figure in the corruption scandal involving Leighton Offshore’s large contracts in 2010 and 2011. It is unclear whether Mr Al Jibouri is still working in Iraq, through the website for his oil services company Armada Group lists a large number of Iraqi state-owned oil companies as clients.
The Australian Federal Police stated in documents submitted to the court that Leighton Offshore tendered for contracts for the installation of onshore and offshore oil pipelines and a mooring system in Basra, Iraq between 2009 and 2011.
During Australian Senate estimates hearings in November 2013, officials responding to inquiries said that the Australian Securities and Investments Commission had first became aware that Leighton Holdings had referred concerns about possible foreign bribery to the Federal Police on 13 February, 2012, shortly before Leighton Holdings made an announcement to the market that it was cooperating fully with the Federal Police on possible breaches of the Code of Ethics.
The arrest of Mr Waugh could mark the end of a complex international effort to find justice for a country which, in the words of prosecutors, was a vulnerable post-conflict environment struggling to rebuild.
The UK Serious Fraud Office highlighted how the case did not simply impact the fortunes of oil companies but impacted the lives of millions of Iraqis since Unaoil’s actions “drove up the price a war-torn country had to pay for essential infrastructural upgrades.
