Ex-Innospec CEO Admits to Bribing Officials in Indonesia, Iraq

By webadmin on 10:45 pm Jun 11, 2012
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Estelle Shirbon

London. A former chief executive at a US-owned chemicals company that bribed officials in Iraq and Indonesia to buy its products pleaded guilty to corruption charges in a London court on Monday, the latest chapter in a long-running international legal saga.

Innospec admitted in 2010 that it had paid millions of dollars in bribes between 2002 and 2008 to secure contracts to sell the two countries tetraethyl lead, a fuel additive that has been phased out from industrialized countries because of health and environmental concerns.

The case is being closely watched in British legal circles because of an unusual plea bargain agreement struck in 2010 between prosecuting authorities and Innospec, a deal which was sharply criticized at the time by a senior judge. 

His critique is likely to feature prominently in an upcoming debate over government proposals to give prosecutors new plea bargaining powers.

Two other former senior executives, Dennis Kerrison and Miltiades Papachristos, pleaded not guilty at Southwark Crown Court to one count of conspiracy to corrupt. Jennings pleaded guilty to two counts of conspiracy to corrupt in relation to bribes paid in both Indonesia and Iraq.

That raised the number of former Innospec executives to have admitted corruption to three. David Turner, a former sales and marketing director for tetraethyl lead, pleaded guilty at Southwark Crown Court on Jan. 17 and is awaiting sentencing.

Innospec’s Iraq agent, Ousama Naaman, was sentenced in December 2011 by a US federal court in Washington DC to 30 months in prison for his role in the corrupt deals.

The investigation into the case began in 2005 and was carried out jointly by US and British anti-fraud agencies.

Innospec was registered in the US state of Delaware but its executive offices were in the British county of Cheshire and the Indonesian bribes were organized from there.

After complex negotiations, prosecuting authorities on both sides of the Atlantic reached a plea bargain agreement with the company in 2010 under which it paid fines of $27.5 million in the United States and $12.7 million in Britain.

John Thomas, the senior British judge who sentenced Innospec at the time, reluctantly upheld the terms of the agreement but he said the $12.7 million fine was “wholly inadequate.”

He also said Britain’s Serious Fraud Office did not have the power to make such arrangements and it should not happen again.     

Reuters