Monday, December 16, 2013

Bahrain: It's Not Corruption If The Entire Ruling Family Knows About It!

Thus have Aluminum Bahrain (Alba)'s lawyers successfully argued in a London court, ending the trial of one Victor Dahdaleh. The Financial Times reports,
Billionaire Victor Dahdaleh did not dispute that he paid £38m to Sheikh Isa bin Ali al-Khalifa, Alba’s former chairman and a close adviser of the prime minister, to win $3bn of contracts for companies including Alcoa of the US. Mr Dahdaleh’s lawyers argued in court, however, that the payments were not corrupt because they were known about and approved by Alba’s government-controlled board. ...

Bruce Hall, Alba’s former chief executive, has pleaded guilty to corruption and will be sentenced shortly. During his cross-examination, he agreed with the description of tensions in Bahrain, where “the royal family is all-powerful” and where “nothing of significance happened in Bahrain without the approval of the prime minister.”

Mr Hall described Alba’s board as “dysfunctional,” agreeing with the premise that the majority Bahraini members “accepted that what Isa and the prime minister said, went”.

The trial also highlighted tensions within the ruling family. Sheikh Salman bin Hamad al-Khalifa, the reformist-minded crown prince, led attempts to reform Alba well before the unrest of the Arab uprising reopened Bahrain’s sectarian divide.

The court heard that Mr Hall was summoned to the crown prince on his appointment as chief executive in 2001 and asked to report any corruption he might witness. But Mr Hall said that he felt he could only report to the crown prince if Sheikh Isa knew.

A turning point that helped hasten the trial’s collapse was a letter from one of Bahrain’s five deputy prime ministers, Jamel Saleem al-Arayed, who also advises the prime minister on legal affairs. He wrote that all payments made by Mr Dahdaleh in connection with Alba were known about by its board.

The letter was read out during cross-examination of Sasi Mallela, an SFO lawyer.
This comes, of course, fourteen months after Alba's $85m settlement of a separate bribery suit with Alcoa filed in a U.S. court.  Yes, that's right: Alba successfully sued Alcoa for bribing its [Alba's] own executives, namely Sh. 'Isa.

Al-Wifaq is calling for an independent investigation -- in Bahrain, that is, rather than the U.S. or Britain.  For now, Bahrain seems happy to outsource the rule of law.

One hopes that some non-"opposition" groups will be willing to cross the political line here to join al-Wifaq and others in calling for a domestic investigation, since that's the only way there is a chance of one.


  1. I have to question the intelligence of anyone who thinks this isn't common practice in the whole gulf region or the Arab world and beyond for that matter. Is it legal under English law? It absolutely is (according to the applicable English law of 1906 in this case). Consent was given. Case closed.
    If Bahrain wants to prosecute the ruling family, then they need to change the law. But guess what? The ruling family writes the law. So good luck with that.
    The point is, it's not right to drag others into a family domestic that's gone out of control when no laws where actually broken.

  2. @Anonymous: Its not legal under the new and very stringent Bribery Act of 2010. Perhaps you should update yourself a bit.

  3. @1st anon: Was anyone arguing that this wasn't common practice?

  4. This case was brought under the older Prevention of Corruption Act 1906 because of the timing of the movements of funds through UK channels as they related to the charges against Dahdaleh.

    As for the trial collapsing because consent was established - this is simply not true. This belatedly submitted 'consent' (a letter stating that the government knew all about the payments to Sh Isa bin Ali at the time) was never tested in the court but the court did hear that the principal (Alba) had not given consent to the payments from witnesses. The letter sent to the SFO from deputy PM Alarayed was not submitted as evidence in court.

    The trial collapsed because lawyers acting for the SFO refused to be cross-examined on specific testimony relating to work they are conducting as counsel for Alba against Dahdaleh in another civil suit. The fact they are also acting against the defendant in another trial was raised by the judge as to a perceived conflict of interest. This meant that there was a risk the defendant would not receive a fair trial as not all the prosecution's case could be cross-examined. This fundamental denial of fairness is main reason the trial was halted. There were also discrepancies in the statement Bruce Hall made in court compared to his written testimony - that formed the backbone of the case.

    Also, Justin, re your 1st sentence you appear to have misunderstood. Alba's lawyers argued no such case, they argued the opposite (that Alba as principal had never given consent to the payments).

  5. @anon 2: I am aware of the new law which is why I said that the payments are legal "according to the applicable English law of 1906 in this case".

    @anon 3: You're right. But just because the trial collapsed before the defense could get to the point of submitting their evidence, that doesn't in my view undermine the evidence itself. Anyway, the judge must have seen the SFO's case crumbling away... not only because of what Hall said in court (which supported the defense), but also for the fact that another key witness (Jeremy Nottingham) admitted to the court that Randy Teslik from Akin Gump (Alba's US lawyer) was trying to persuade him to basically lie in court in favour of the prosecution and say that the government of Bahrain had nothing to do with the dealings of Alba (you have to ask yourself why Akin Gump would do that? I say it's because they knew that the defense will get to the point that they can prove the consent part so Akin Gump wanted to close that door for the defense but it backfired in their face)... Nottingham admitted that the government was in fact deeply involved in Alba's dealings.

    You'll probably agree with me here that what's really interesting in all of this is the two Akin Gump lawyers (Mark MacDougall and Randy Teslik), and remember they're Alba's own US lawyers!, refusing to face cross examination. I think they got found out about misleading the SFO in the investigation and in interfering with witnesses so they didn't want to face the heat. As someone else put it in a comment on an article I read elsewhere, they made a prank call to the police and ran away before the police showed up. That’s what guilty people normally do. The SFO based most of its case on info gathered from Akin Gump. If Akin Gump were confident about the info they gave, they would have turned up to court... but their absence demonstrates that they didn't want their involvement in the case to be exposed or further exposed I should say cos who knows what else they'd been up to. If I was in the SFO's shoes, I'd go after them for wasting the SFO's time and tax payers money. Akin Gump shouldn't get away with this. The police takes prank callers seriously... so should the SFO.

  6. Hi

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  7. @Anons: It's clear that your knowledge of the case far exceeds my own, which comes only from the public sources cited in the document. So thank you for the comments here, which I'm sure are of great use to others following the matter.


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