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December 5, 2013 4:44 pm
A Bahraini government minister intervened in a $3bn UK criminal case by telling the UK attorney-general that allegedly corrupt payments to a senior member of the Gulf’s state ruling family were known about and approved, a court heard on Thursday.
The jury in the criminal trial in London of Victor Dahdaleh, a British-Canadian “power broker” whom the UK Serious Fraud Office accuses of “grand scale” corruption, was told that the Bahraini minister had written a letter to the SFO and the attorney-general in November 2012.
In the letter, Jamel Saleem Al-Arayed, one of Bahrain’s five deputy prime ministers who also advises the state’s prime minister on legal affairs, wrote that all payments made by Mr Dahdaleh in connection with Aluminium Bahrain, or Alba, Bahrain’s state-controlled aluminium producer, were known about by its board.
“We hereby confirm that the board of directors of Aluminium Bahrain knew of and approved all contracts entered into by Alba, including knowing of and approving payments made by Victor Dahdaleh,” the five-line letter from Mr Arayed read. The letter was read out during cross-examination of Sasi Mallela, an SFO lawyer. “This was entirely in accordance with Alba’s business practice.”
While Mr Dahdaleh admits paying $38m to Sheikh Isa bin Ali al-Khalifa – who was chairman of Alba at the time as well as Bahrain’s finance minister – in exchange for winning $3bn of contracts for Alcoa, the US aluminium company for whom Mr Dahdaleh was an agent, he argues the payments were not corrupt.
A key defence for Mr Dahdaleh, who is charged with seven counts of corruption under bribery laws that have since been overhauled, is to show that the payments were consented to by a principal – in this case the Bahraini government and Alba’s board of directors.
Interference in Middle-Eastern corruption cases is a sensitive topic for the SFO, which saw its investigation into BAE Systems’ arms deal with Saudi Arabia narrowed after intervention in 2006 from Downing Street on national security grounds.
Mr Mallela responded that the SFO had no way of ascertaining how Mr Arayed knew of Alba’s business.
The court heard that the letter followed a request from Allen & Overy (A&O), Mr Dahdaleh’s former law firm.
A subsequent request from Mr Malella to Peter Watson, an A&O litigator, to attend a hearing to discuss the circumstances of the letter, was declined on the grounds of litigation privilege, the court heard.
The jury has previously heard that the SFO alleges Mr Watson and a colleague intimidated a key prosecution witness and contravened Mr Dahdaleh’s bail terms of not contacting witnesses either directly or indirectly. Mr Dahdaleh is now represented by another law firm, Norton Rose Fulbright.
In cross-examination of Claire Wynne-Jones, an SFO investigator, Nicholas Purnell QC, Mr Dahdaleh’s barrister, asked why the SFO had not mentioned in evidence “millions of dollars” of payments made to Zamil Al-Joweiser, a member of Saudi Arabia’s Sabic – which had a minority holding in Alba – who sat on Alba’s raw-materials negotiation committee.
“I would suggest that there was no mention because if there was evidence that Sabic knew all about these payments and was in receipt of payments, it destroys the prosecution case that the board knew nothing about the payments,” Mr Purnell said.
The trial continues.
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