Mining Giant Glencore Flew Cash Bribes To Africa

Glencore flew cash bribes to offi­cials in Africa via pri­vate jet amid “endem­ic” cor­rup­tion with­in the min­ing com­pa­ny, a London court has heard, in sen­tenc­ing of the first ever UK cor­po­rate con­vic­tion on charges of brib­ing anoth­er person.

Third-par­ty agents used Glencore’s mon­ey to bribe offi­cials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan, caus­ing harms worth $128m, a sen­tenc­ing hear­ing at Southwark crown court heard.

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).

Alexandra Healy KC, the SFO’s coun­sel, told the court that Glencore was involved in the pay­ment of bribes worth $27m. The $128m in harms were worth £81m at the time of the offences, and were “autho­rised at a senior lev­el”, Healy said.

window.tgpQueue.add('tgpli-64a7dca48fd9a')Lisa Osofsky (sec­ond right), the SFO direc­tor, with Sara Chouraqui, Victoria Jacobson, and Elizabeth Collery, offi­cials who worked on the Glencore case. Photograph: Stefan Rousseau/PA

The SFO reviewed more than 1m doc­u­ments, includ­ing exten­sive email and WhatsApp instant mes­sen­ger con­ver­sa­tions, and car­ried out 16 inter­views as part of the large and com­plex inves­ti­ga­tion. Former Glencore boss Ivan Glasenberg, who was chief exec­u­tive through­out the time of the offences, was not among those inter­viewed by the SFO.

In a mark of the case’s impor­tance to the SFO, its direc­tor, Lisa Osofsky, vis­it­ed the agency’s case team at Southwark crown court before the hearing.

The Glencore chair, Kalidas Madhavpeddi, attend­ed the hear­ing in per­son, in what Glencore’s coun­sel, Clare Montgomery KC, described as a mark of a “change in cul­ture” at the company.

“The con­duct was inex­cus­able,” said Montgomery. “The com­pa­ny unre­served­ly regrets the harm caused by these offences.”

The bribery was first detect­ed by the FBI in 2017, and Glencore agreed in May to pay $1.1bn to US author­i­ties for vio­la­tions of bribery laws and com­mod­i­ty price manipulation.

The judge at Southwark crown court, Mr Justice Fraser, is expect­ed to sen­tence Glencore Energy UK Ltd on Thursday, tak­ing into account the harm admit­ted by Glencore and oth­er fac­tors such as how cul­pa­ble the com­pa­ny was.

Healy argued that it ranked as a more seri­ous offence because the com­pa­ny played a “lead­ing role in organ­ised, planned, ille­gal activ­i­ty” that was “autho­rised at a senior level”.

However, Glencore antic­i­pates the penal­ties it is like­ly to pay in the UK will be small­er than the US. In May, it said it did not antic­i­pate hav­ing to set Find more information aside more than its ear­li­er $1.5bn pro­vi­sion to cov­er all the costs relat­ed to the bribery.

The court heard detailed descrip­tions of how Glencore and its agents repeat­ed­ly sought to cor­rupt pub­lic offi­cials. On one occa­sion, an agent told Glencore to hur­ry cash pay­ments because he had “staff to make hap­py before Christmas” – a ref­er­ence to a bribe in Nigeria. On anoth­er occa­sion, an agent of Glencore boast­ed 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 were also direct­ly involved in with­draw­ing cash to be used in bribes. The SFO suc­cess­ful­ly applied for sev­er­al for­mer employ­ees and agents to be anonymised dur­ing the tri­al because it is con­sid­er­ing fur­ther 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 in Baar, Switzerland, to fund bribes on 25 sep­a­rate occa­sions between 2012 and 2015. Those with­drawals had to be signed off by senior employ­ees, one of whom was a Glencore “busi­ness ethics offi­cer” and the oth­er who was a mem­ber of the company’s “busi­ness ethics committee”.

In South Sudan, Glencore offi­cials trav­elled by pri­vate jet to the coun­try short­ly after its inde­pen­dence in 2011 with $800,000 in cash. That cash was false­ly described as for “open­ing office in South Sudan, cash for office infra­struc­ture, salaries, cars etc”, but was instead hand­ed to agents who used it to bribe officials.

“Within days of the arrival of the cash in [the cap­i­tal] Juba on 2 August 2011, Glencore’s for­tunes changed” and it gained valu­able con­tracts, said the SFO’s counsel.

Healy said there was a “stark con­trast between the true cul­ture of the com­pa­ny and that set out in” its anti-mon­ey laun­der­ing policies.

The SFO car­ried out 72 hours of inter­views with Anthony Stimler, a for­mer Glencore trad­er who con­fessed to US bribery charges last year. Stimler said “the bribery that I wit­nessed then, and in my sec­ond phase became involved with, was con­doned” by a senior Glencore employee.

Original sto­ry source, please vis­it for the full arti­cle: THE GUARDIAN

Download the full ver­sion ofThe Serious Fraud Office ‑v Glencore Energy UK LtdSentencing Remarks of Mr Justice FraserSouthwark Crown Court3 November 2022