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Oct 9, 2018

US Prosecutors: China Corruption Case Grows Stronger

Last month, Patrick Ho, a former Hong Kong official fighting foreign bribery charges in New York, thought he had finally received a break. In a dramatic move in the high-profile bribery case, prosecutors on Sept. 14 dropped all criminal charges against Cheikh Gadio, a former Senegalese foreign minister they had accused of helping Ho bribe African officials. Arguing that the government's move undermined its case against Ho, Ho's lawyers urged a federal judge in New York to release their client from a federal jail.  But the presiding judge, Loretta Preska, wasn't buying it. She dismissed the motion, Ho's fifth unsuccessful request for bail. And prosecutors said Gadio has agreed to cooperate, expressing confidence that his testimony against Ho will strengthen their case.  "(Far) from weakening the case, Gadio's testimony will provide substantial evidence of the defendant's guilt," prosecutors wrote in a court filing.  Left largely unnoticed in the U.S., the corruption case against Ho has sent shockwaves across Asia, putting the spotlight on an open secret in global business circles — rampant bribery of foreign governments by Chinese companies seeking business deals around the world.     China has largely ignored the problem, according to China experts.  While the government of President Xi Jinping has launched a much-publicized domestic anticorruption campaign, experts say Chinese authorities have yet to bring a single foreign bribery case against a Chinese company or executive.   Ho has denied any wrongdoing.   Ho, 69, and Gadio, 62 were arrested in New York last November and charged as part of a conspiracy to bribe African officials on behalf of CEFC China Energy, a Shanghai-based energy conglomerate with ties to the country's military.  At the time, Ho headed China Energy Fund Committee, a Virginia and Hong Kong-based NGO funded by CEFC China Energy, while Gadio ran a business consulting firm when he was a member of Senegal's parliament.  In one of two bribery schemes, prosecutors alleged that Ho and Gadio met on the sidelines of the United Nations in late 2014 to engage in a conspiracy to pay a $2 million cash bribe to Idriss Deby, the president of Chad.The payment was offered in exchange for helping CEFC Energy's entry into Chad's rich energy sector, according to prosecutors.  Gadio allegedly introduced Ho to Deby and served as a middleman during discussions between the Chinese executives and Chadian officials. The complaint did not make clear whether any payment was made to Deby, but it did say that Gadio received $400,000 for his services.  In the second scheme, Ho allegedly paid a bribe of $500,000 to Sam Kutesa, the Ugandan foreign minister, in 2016 in exchange for Kutesa's help in helping CEFC Energy gain business contracts in Uganda's financial and energy sectors, according to the criminal complaint.The bribe was paid after Kutesa finished his one-year term as president of the U.N. General Assembly and returned to Uganda.  While the charges against Gadio were never presented to a grand jury, Ho was indicted on multiple counts of foreign bribery and money laundering.  Ho pleaded not guilty.   Timothy Belevetz, a former federal prosecutor now a partner at the Holland & Knight law firm, said bribery cases under the foreign bribery law known as the Foreign Corrupt Practices Act rarely go to trial. "This is an opportunity for law to be made," Belevetz said.  FCPA was passed in 1977 in response to disclosures that U.S. companies were bribing foreign officials to secure business deals. The law has since been amended, giving the Justice Department and the Securities and Exchange Commission broad jurisdiction over foreign companies that have subsidiaries in the United States or trade on U.S. stock exchanges.  In recent years, the Justice Department, working with international law enforcement agencies, has brought a growing number of corruption cases against foreign companies and executives paying bribes to foreign government officials. While the Justice Department has previously charged U.S. and European companies with paying bribes to Chinese officials, never before has it tried the representative of a Chinese company on charges of bribing foreign officials in exchange for business contracts. At the heart of the Ho bribery case is the question of whether any payment promised or made to the African officials was a bribe, as prosecutors call it, or a charitable donation, as defense lawyers put it.  As Ho's Nov. 5 trial approaches, prosecutors have revealed how Gadio's testimony, as well as evidence of Ho's business dealings with Iran and alleged arms sales to African nations, will help their case at trial. In a recent court filing, prosecutors wrote that Gadio will testify that Ho handed $2 million in cash, hidden in a gift box, to Deby, and only after Deby "refused to accept this obvious bribe" did Ho draft a letter pledging $2 million to "charitable causes" in Chad.  Gadio will also tell a jury that Ho never asked him about the status of the donation, indicating Ho had no "interest in doing charitable works in Chad." "This expected testimony considerably strengthens the government's proof beyond the already-strong case reflected in the detailed Complaint," prosecutors wrote.  Prosecutors have also indicated in recent days that they intend to introduce evidence of Ho's involvement in other corrupt actions. In a court filing last week, prosecutors disclosed they have evidence that shows Ho had offered a bribe to John Ashe, a diplomat from Antigua and Barbuda who served as president of the U.N. General Assembly the year before Kutesa held the post. (Ashe was implicated in another corruption case involving a Chinese national but he died in 2016 before the case went to trial).  Prosecutors also plan to introduce evidence of Ho's interest in doing business with Iran while the country was under U.S. sanctions, and brokering arms sales to Libya and Qatar.  In an October 2014 email, one of several cited in court documents, Ho suggested that CEFC China serve as a "middleman" to help Iran access funds it kept in a Chinese bank under U.S. sanctions to pay a Hong Kong bank for precious metals. The complaint had hinted at Ho's willingness to help Chad procure weapons from China, but new government filings allege that Ho's interest in arms dealing extended beyond Chad.  In March 2015, according to an intercepted email, Ho asked an unidentified intermediary to send him a list of weapons and military equipment requested by Libya so that "we can execute that right away." A month later, Ho emailed the intermediary. "Qatar needs toys quite urgently. Their chief is coming to China, and we hope to give them a piece of good news." Prosecutors say they want to introduce the emails as background evidence "to show the development and nature of the relationship" between Ho and Gadio.  Belevetz said that as with other white-collar criminal cases, the case against Ho will turn more on documents such as emails and wire transfer records than testimonies of witnesses.  In white-collar cases, "you often have a paper trail that shows what was said," Belevetz said. Edward Kim, one of Ho's lead attorneys, declined to comment. Sean Hecker, Gadio's lawyer, said in a statement to VOA, "Dr. Gadio looks forward to continuing to cooperate with U.S. authorities before returning to Senegal to continue his service to the Senegalese people and the important pursuit of establishing peace and security across the Sahel Region."
by [email protected] (Masood Farivar) via Economy - Voice of America

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