Former Australian executive arrested, charged over alleged oil bribery plot

Mr Waugh allegedly masterminded a plot between March 2010 and mid-2012 that involved bribing high-ranking Iraqi officials in return for $1 billion of Iraqi government oil pipeline contracts for Leighton.

Bribery or Corporations Act charges are also expected to be brought against at least two other former top executives from Leighton, a listed firm now called CIMIC. Court files identify those to be charged as David Savage who is currently in France, and Peter Cox who is in Asia. Both may face extradition.

Those bribed are, according to leaked files, a former deputy prime minister of Iraq and two former oil ministers.

Mr Waugh is the most senior executive from an ASX-listed company to be charged with foreign bribery offences in Australia since the laws were passed in 1999 and his arrest marks a major breakthrough in an Australian Federal Police investigation that has lasted almost a decade and cost millions of dollars. The AFP has struggled to bring financial crime prosecutions but official sources, who are not authorised to speak publicly, said the charges showed a long-term commitment to major corporate graft cases was vital.

One financial crime investigator based in Canberra warned that AFP command is divided about whether to invest in complex fraud and bribery inquiries because they are time consuming and difficult to prosecute.

The charging of Mr Waugh was made possible by the decision of brothers Cyrus and Saman Ahsani of Monaco to co-operate with the Australian government after they were charged by the FBI in 2019 for Unaoil’s vast-scale bribery operation, which was exposed via a massive data leak to The Age and The Sydney Morning Herald in March 2016. At least 25 multinational firms were involved, including Leighton.

According to court files, the case against Mr Waugh alleges he conspired with the Ahsanis, who are expected to testify that he was involved in clandestine meetings and suspect money trails to hide bribes being paid by Leighton but handed over to officials by Unaoil.

The Ahsanis will allege in the Australian prosecution that Mr Waugh as well as Mr Cox and Mr Savage were involved in the payment of kickbacks between March 2010 and mid 2012. Those bribed are, according to leaked files separately obtained by The Age and Herald, a former deputy prime minister of Iraq and two former oil ministers. If Mr Waugh is found guilty he could face up to 10 years in jail.

According to court files, Mr Waugh is also alleged to have used a shadowy UAE firm, Asian Global Projects and Trading, to funnel $5.6 million in suspect payments to win contracts in Iraq. In 2018 he faced false accounting charges laid by corporate watchdog ASIC over unrelated dealings he had with Asian Global in connection with the Leighton’s Indian operations. In December 2018, Mr Waugh was found not guilty. The federal police case involves new allegations.

In the US, authorities are also investigating CIMIC over Leighton’s alleged bribery as part of the FBI’s sprawling Unaoil corruption inquiry. If the company is charged, the penalties could run into hundreds of millions of dollars, on par with the US government’s cases against other companies who hired Unaoil to pay their bribes such as UK behemoth Rolls Royce.

The AFP charges were prompted after the Unaoil reports in The Age and Herald in 2016, which also led to corruption probes across the globe. Unaoil was hired by Leighton Holdings’s offshore arm to help it secure work in Iraq as part of the Australian company’s international expansion plans under the leadership of chief executive Wal King. Mr King remained CEO until early 2011.

There is no suggestion in the Australian case that Mr King knew of the alleged bribery in Iraq, although the case against Mr Waugh alleges that the bribery took place during Mr King’s last eight months as Leighton CEO.

The brazenness of Unaoil’s criminal offending was laid bare in an unsealed indictment filed in the US in 2019. The US government has accused Unaoil of paying bribes on behalf of up to 25 multinational firms over more than a decade.

To protect their scheme the Ahsani brothers issued legal threats and claims of innocence while shredding files. The Ahsanis were actively destroying evidence in March and April 2016 at the same time as Unaoil was instructing its Australian lawyer to threaten The Age and the Herald with defamation suits and to brief reporters from other media outlets on the Ahsanis’ innocence and the unfairness of the journalism that had exposed their corruption.

Along with bribery and money laundering, Unaoil executives Cyrus and Saman Ahsani have pleaded guilty in the US to having “destroyed incriminating documents with the intent to prevent their discovery by law enforcement”. The Ahsanis are awaiting sentencing in the US.