Pervasive corruption during BNP rule

 Out of this amount Siemens Bangladesh would pay US $ 500,000 to the US government to settle charges that in 2004 it bribed Arafat Rahman Koko, second son of then Prime Minister Khaleda Zia. In what appears to be another sensational revelation at around this time, the Singapore government announced its decision to freeze assets amounting to Tk 11, 66, 00,000 belonging to Arafat Rahman Koko.

With Siemens pleading guilty to bribing Arafat Rahman Koko, the US Department of Justice (DOJ) on January 8, 2009 filed an asset forfeiture case against accounts worth nearly $ 3 million related to bribes paid to Arafat Rahman Koko in connection with the Siemens and China Harbour corruption payments. The DOJ asserted forfeiture jurisdiction because some of the funds in Koko’s bank account in Singapore came from a US bank account and the bribes were paid in US dollars through US financial institutions.

{special_block_1}Money laundering laws in the US cover financial transactions that flow through the US involving proceeds of foreign offences including foreign bribery and extortion. In order to enforce the US confiscation order a joint Mutual Legal Assistance was issued by the US and Bangladesh in respect of the money held in the corporate account of ZASZ, a Singapore company owned by Arafat Rahman Koko and with the initials of Koko’s family – Zafira (Koko’s daughter), Arafat (Koko himself), Shamila (Koko’s wife) and Zahiya (Koko’s second daughter).

Bangladesh sought from the US the huge money illegally stashed away by Koko in the telecom deal signed with Siemens. A case was filed with Columbia District Court and the matter was under trial. The US government confiscated $ 1.6 million (Tk 110 million) siphoned off by Koko. The money was part of the kickback received by Koko from German telecom major Siemens for laying mobile phone network in Bangladesh.

Certain other assets, including assets of another company in Singapore called ‘Fairhill’, also set up by Koko, were confiscated.

Anti Corruption Commission (ACC) filed the money laundering case against Koko on March 17, 2009. Koko was convicted in absentia by a Bangladesh court and sentenced to six years in prison for earning illegal wealth and money laundering. He was fined Tk 38.83 crore for the same.

On August 27, 2013 ACC brought back Tk 7.4 crore siphoned off to Singapore by Koko. ACC received this money as the second installment. Earlier, on November 22, 2012 it received the first installment Tk 13.6 crore from Singapore which was also laundered by him.

Koko had received Tk 19.71 crore in bribe from German telecom giant Siemens and Chinese engineering firm China Harbour Ltd to win them telecom and terminal building contracts taking advantage of his mother’s position as Prime Minister. Koko later siphoned the money off to Singapore.

Koko owned trading firm ZASZ Trading and Consulting Pvt Ltd jointly with a Singapore national, Lim Siew Cheng, who was Koko’s paid service agent. Koko registered the firm in Singapore with the help of a few associates and the Singaporean service agent on April 14, 2004. Non-resident foreigners cannot open any company in Singapore and has to have a Singapore national for this purpose. The whole amount received by Koko as bribe was deposited in his joint account with his Singapore based partner.{special_block_2}

On January 2, 2011 a Singapore court fined Lim Siew Cheng, Koko’s business partner in Singapore, for keeping Koko's money in his account. The Straits Times, an English language daily of Singapore, reported that the court fined Cheng $900,677 for having Koko's $317,000 transferred to his account and holding on to it on Koko's advice.

Koko who remained a fugitive from law for a long time since 2007 died of heart failure in 2015 in Malaysia.

Federal Bureau of Investigation (FBI) investigated bribery and money laundering activities of Tarique Rahman, Khaleda Zia’s elder son and BNP’s Acting Chairman and of his close friend and business associate Giasuddin Al-Mamun. It was discovered that Tarique and Mamun received $ 750,000 as bribe in a Singapore bank account from Khadiza Islam, Director of Nirman Construction Ltd and local agent of Harbin Engineering Company of China for granting of contract for installing an 80 MW power plant at Tongi.

FBI  Agent Debra LaPrevotte who conducted investigation of corruption in Bangladesh, testified before a Bangladesh court in Dhaka in November, 2011that the FBI had traced bribe payments from Khadiza Islam’s OCBC Bank account in Singapore to Mamun’s Singapore bank account. A supplementary Gold Visa card was issued in the name of Tarique Rahman from this bank account. Tarique used this credit card to which the FBI traced bribe payments, for travels to Greece, Germany, Thailand, Singapore and UAE. Companies seeking contracts in Bangladesh transferred bribe payments to Tarique Rahman into Mamun’s Singapore bank account to which Tarique had direct access.

More than a dozen corruption cases are now pending against Tarique.

On July 21, 2016 the High Court Division of Supreme Court found Tarique Rahman guilty of money laundering charges and sentenced him to seven years of imprisonment and further imposed a fine of Tk 20 crore. In awarding the punishment the court observed that his conduct was a financial crime which hindered sustainable economic development of the country. The court found that the payment of $ 750,000, claimed to be ‘consultancy fees’, was in reality a bribe. Tarique Rahman was also convicted along with his mother Khaleda Zia for embezzlement of orphanage fund for which he has been sentenced to ten years of rigorous imprisonment and fined Tk 2.10 crore.

On June 23, 2011 Niko Canada pleaded guilty before a Canadian court and admitted to providing, as a bribe, a vehicle costing Canadian dollars 190,984 to AKM Mosharraf Hossen, state minister for Energy and Mineral Resources during BNP rule. Niko Canada also paid US $ 5,000 as a bribe and paid for travel and accommodation expenses for Mosharraf Hossen for his personal visit to the US to meet his family. Niko paid the bribes “to ensure that Niko was able to secure a gas purchase and sales agreement” as well as to gain concession to Bangladesh’s claims for compensation for the gas field blowouts caused by Niko.

On the basis of evidence collected from Royal Canadian Mounted Police (RCMP), FBI of the US and ACC of Bangladesh, the High Court Division of Supreme Court of Bangladesh in a judgment delivered on August 24, 2017 observed that during the period 2001 – 2006 (BNP rule) a scheme of bribery and corruption was set up for payment of bribes by Niko which was unearthed by international law enforcing authorities acting in close cooperation for the purpose of fighting the global menace of corruption. The court noted that Niko brazenly admitted to making payments of US $ 4 million through Qasim Sharif (agent of Niko who was later made Vice President of Niko) and US $ 500,000 through Salim Bhuiyan (former President of Dhaka Club). These payments were made as consultancy fees for their services in making payment to government officials and for arranging meetings with government high-ups. Evidence collected by FBI and RCMP established the trail of bribe payments from Niko Canada through a Barbados bank, then through a Swiss bank account of Qasim Sharif, then to Salim Bhuiyan and finally to the eventual recipients in Bangladesh including Giasuddin Al Mamun, close friend and business partner of Tarique Rahman.

Some other major corruption cases under trial:

Zia Charitable Trust case: The case relates to illegal transaction of Tk 31.55 million in the guise of forming a charitable trust in the name of Khaleda Zia’s husband Ziaur Rahman, the country’s first military ruler.

Barapukuria corruption case: Khaleda Zia stands accused in the Barapukuria Coal Mines case for irregularities and corruption in handing over operations of the coalmines to a Chinese company. The government had to incur a loss of Tk 158.71 crore for awarding the contract to China National Machinery Import and Export Corporation.

GATCO Corruption case: ACC filed this case charging Khaleda Zia with unlawfully appointing Global Agro Trade Company (GATCO) as a contractor for both the Inland Container Depot in Dhaka and container handling in Chittagong Port on March 1, 2003 without following proper bidding procedure. The appointment of GATCO and problems arising out of it cost the state coffers $ 140 million (Tk 10 billion).

Niko Corruption case: ACC case report on Niko scam stated that Khaleda Zia connived with Niko, a Canadian oil and gas company, in implementing an illegal joint venture agreement after the BNP- led Alliance came to power in October 2001. Experts of Petro-Bangla and Bangladesh Petroleum Exploration & Production Company opposed the agreement but Khaleda Zia ignored opinions of the gas experts and took side with Niko on the deal costing the state Tk 13,777 crore in losses.