A recent hearing – from December 11-15 – at World Bank’s International Center for Settlement of Investment Disputes (ICSID) regarding the infamous Niko corruption issue – put the spotlight back on the blatant abuse of state power and influence to offer gas exploration work to a Canadian company in exchange of bribes to influential people linked with the then BNP-led government, including those loyal to Tarique Rahman.
Barrister Moin Ghani, who along with the international law firm Foley Hoag LLP, represented Bangladesh and Petrobangla at the ICSID arbitration hearings, confirmed that the issue of corruption was central at the hearing in Washington D.C. A successful outcome in the case would uplift Bangladesh’s image and send a strong signal to foreign companies against engaging in corruption, he added.
The hearing was attended by agents from the Federal Bureau of Investigation of the United States (FBI) and the Royal Canadian Mounted Police (RCMP) who had investigated Niko’s bribery and unearthed the money trail that crisscrossed the globe from Niko headquarters in Canada to the bank accounts of Giasuddin Al Mamoon, a close friend and business partner of BNP’s acting chief Tarique Rahman, and the then state minister for energy, AKM Mosharraf Hossain.
Kevin Duggan of RCMP and former FBI Special Agent Debra Bragg (formerly Debra LaPrevotte Griffith) both gave testimonies and presented their findings of several years of investigation which unmasked the money trail involving Niko’s corruption in Bangladesh.
The ICSID conducted the hearing for the case “Niko Exploration (Block 9) Ltd. v. People’s Republic of Bangladesh and Bangladesh Oil Gas and Mineral Corporation”, and heard arguments from both sides before a tribunal headed by Wendy Miles KC, President of the Tribunal. The other arbitrators of the Tribunal are Peter Rees KC and Professor Brigitte Stern.
During BNP-Jamaat’s last tenure in power, from 2001 to 2006, Tarique and his associates had made “Hawa Bhaban” an alternative powerhouse that took many crucial decisions bypassing the laws of the land, according to media reports. Niko resorted to bribery and abused their influence to obtain lucrative contracts in Bangladesh.
During the tenure of the Awami League government in 1996-2001, Niko tried but failed to get an unsolicited deal. After the BNP-led alliance government took office in 2001, Niko signed the controversial joint venture agreement (JVA) with Bapex to develop two “marginal” gas fields in Chhatak and Feni in 2003.
“Marginal” gas fields are those that have already been explored, used and then abandoned.
Tarique’s business partner Giasuddin Al Mamoon helped Niko, in 2003, to clinch a gas field by showing the new gas field in Chhatak as a used or marginal one.
The cost Bangladesh paid for Niko’s bribery
When Niko started drilling the Chhatak field, it caused two massive blowouts – first in January 2005 and the second in June 2005 – due to its “faulty and negligent operation.” The gas field was completely destroyed and gas escaped from the field for years. This caused serious health issues for the local population as well as environmental damage to the surrounding areas. Eighteen years down the line, the residents of the area surrounding Tengratila gas field in Sunamganj are still reeling from the adverse effects of the blow-outs. International experts have estimated the loss and damage from the blowouts to be over $1.06 billion.
How Niko deal was approved by Tarique’s mother, then PM Khaleda Zia
Bapex and Petrobangla authorities found Niko unfit to carry out exploration works and subsequently its unsolicited offers were turned down during the Awami League led government. However, the return of the BNP-Jamaat regime in 2001 saw a flurry of activities from Niko to bribe influential people within the power dynamics.
According to government documents, the JVA deal, signed on October 16, 2003, was vetted by the then law ministry and approved by the then prime minister Khaleda Zia.
Though Niko agreed to a “Swiss Challenge” bidding in 1999, the BNP government did not arrange for such a bidding in 2003. Instead, it went for signing the deal without floating any tender. Giving the legal opinion in favour of the unsolicited deal, the then law ministry said, “The Swiss Challenge method is not applicable for the proposed marginalised gas fields.”
To illustrate the extent of bribery, retired FBI agent Debra LaPrevotte Griffith, in her statement mentioned that the then Law Minister Moudud Ahmed’s wife purchased a $400,000 home in the United States. Moudud Ahmed’s government salary during this time frame was approximately $9,500 per year.
Renowned investigative journalist and former producer for PBS’ investigative series, FRONTLINE, David Montero in his book “Kickback: Exposing the Global Corporate Bribery Network” wrote that the two sons of Khaleda Zia, Tarique Rahman and Arafat Rahman Koko, both operated a “shadow government” from an office building in Dhaka, an address “every Bangladeshi knew and feared.”
In the book, Montero discussed how the brothers were “godfathers of BNP” and “from their office, the Rahman brothers issued threats and extorted loyalty payments, and regularly took bribes from foreign companies in return for awarding public contracts worth millions. What they did with the money was more alarming.”
A 2008 cable from the then US ambassador in Bangladesh believed that Tarique is “guilty of egregious political corruption that has had a serious adverse effect on US national interests.” “His history of embezzlement, extortion, and interference in the judicial process undermines the rule of law and threatens to upend the US goal of a stable, democratic Bangladesh. The climate of corrupt business practices and bribe solicitation that Tarique fostered derailed US efforts to promote economic development by discouraging much needed foreign investment and complicating the international operations of US companies,” it said, adding, “In short, much of what is wrong in Bangladesh can be blamed on Tarique and his cronies.”
Tarique’s influence at the heart of Niko deal
As part of its own investigation, the RCMP questioned Tarique’s business partner Giasuddin Al Mamoon in jail on November 7-8, 2008, when he admitted to have received the money in return for ensuring the Niko deal.
When the RCMP officials asked Mamoon about the source of his influence, he said: “My power is fifty percent, I’m the friend of Tarique Rahman.”