A former top-ranking executive for Cimic Group Ltd (ASX: CIM) was arrested Wednesday morning at his Brisbane home.
Russell Waugh is scheduled to appear in Brisbane Magistrates Court facing 2 charges of bribery-related offences, plus falsifying books and knowingly providing misleading information.
The 54-year-old’s arrest is the climax of a marathon 9-year investigation for the Australian Federal Police.
In November 2011, AFP received a report that Leighton Holdings’ (now known as CIMIC) overseas arm Leighton Offshore Pty Ltd allegedly made “improper payments” regarding Iraqi oil infrastructure contracts.
That triggered an enquiry that revealed a complex web of foreign entities designed to allegedly funnel bribes through.
At the time, Leighton was trying to secure approvals for two Iraqi contracts worth US$1.46 billion (AU$2 billion).
The AFP accuses Waugh of involvement in kickbacks that were designed to butter up government officials within the Iraqi Ministry of Oil and the South Oil Company of Iraq.
Operation Trig identified about US$77.6 million (AU$106.4 million) in “suspicious payments” made through third parties.
Arrest warrants are also out for 2 other former Leighton executives – David Savage and Peter Cox – who are both believed to be overseas.
The Motley Fool has contacted CIMIC for comment.
CIMIC shares dropped from $23.63 to $23.40 when news broke of the arrest Wednesday morning. At the time of writing, the Cimic share price is trading slightly down at $23.29 cents.
Investigating overseas bribes is hard work
Foreign bribery investigations were complicated, according to AFP deputy commissioner Ian McCartney.
“Operation Trig investigators demonstrated outstanding resilience over the past nine years,” he said.
“They persevered through the painstaking process of piecing this jigsaw together from facts and allegations of alleged corruption that reached internationally, to a level that allowed us to bring this before the court in Australia.”
AFP worked closely with the United Kingdom’s Serious Fraud Office, the United States Department of Justice and Federal Bureau of Investigation during the operation.
Over the years, the investigation seized more than 2 million documents and nabbed evidence from 10 different countries.
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