Former Leighton Holdings executive David Savage has been charged over his alleged role in the international Unaoil scandal, which involved bribery of senior officials in oil-producing nations to secure lucrative contracts.
Mr Savage, the former chief operating officer of the prominent Australian infrastructure firm, was arrested by Australian Federal Police officers upon his release from hotel quarantine in Sydney’s CBD on Monday morning. He was granted bail at Sydney Central Local Court in the afternoon.
The prosecution of Mr Savage, 60, is a major development in Australia’s longest-running bribery investigation, focused on Leighton’s bribery of Iraqi officials in order to win oil pipeline construction contracts.
The investigation has discovered approximately $US77.6 million in suspicious payments channelled through Monaco-based consultancy Unaoil and other third parties.
Mr Savage has been charged with two counts of knowingly providing misleading information contrary to Australian corporations law.
Police allege he helped conceal and alter company documents that threatened to reveal Leighton’s corruption.
The investigation was launched in 2011 following a report from Leighton about alleged improper payments by Leighton Offshore, registered in Singapore, regarding two contracts with Iraq Crude Oil Export over 2010 and 2011, worth about $US1.46 billion in total.
The contracts were for the construction of offshore oil pipelines that would increase Iraq’s crude oil exporting capacity.
According to the AFP, the key targets of the bribery scheme were Iraqi Ministry of Oil officials and government officials within the South Oil Company of Iraq.
Mr Savage was taken to Sydney Police Centre in Surry Hills on Monday before being granted bail. Under the bail conditions, he must keep the AFP updated on his living arrangements, travel plans and contact details.
He is the second Australian executive charged in connection with the Unaoil conspiracy, which has already led to the jailing or guilty pleas of executives in Europe and the US.
Mr Savage’s former subordinate, Russell Waugh, allegedly masterminded the plot to secure the contracts. He was arrested in November.
Documents filed in the case against Mr Waugh detail suspicious emails between him and Mr Savage.
In one, Mr Savage instructed Mr Waugh to “amend” an Iraq project PowerPoint that was to be presented to chief executive Wal King and his fellow Leighton directors in October 2010. According to the AFP allegations, the amendment was sought by Mr Savage to hide a $48.5 million payment that detectives claim was partly a slush fund to pay bribes.
“Obviously, we need everything in the ‘right’ place,” Mr Savage allegedly emailed to Mr Waugh of the need to ensure certain large payments that might raise board suspicions were “buried”.
The court documents also reference a file note made by another Leighton executive in November 2010, which allegedly records Mr Savage admitting that he knew Leighton was planning to fraudulently inflate a contract with a Monaco consulting firm called Unaoil in order to win the Iraq project.
Mr Savage’s return to Australia on December 27, 2020, triggered a border alert on persons of interest. He has been based in France, where he owns a chateau.
His charges are less severe than Mr Waugh’s but he could still face prison time if convicted.
A third man, Asia-based Peter Cox, is also wanted by the AFP for his alleged role in the bribery conspiracy.
The investigation is ongoing and further arrests and charges are possible.
Leighton, which is now known as CIMIC, was drawn into the international Unaoil scandal alongside other Western multinationals accused of large-scale bribery.
Unaoil was hired by Leighton’s offshore arm to help it secure work as part of the company’s aggressive international expansion into Asia and the Middle East.
Unaoil’s extensive criminal activities were laid bare in an unsealed indictment filed in the US in 2019. US authorities accused Unaoil of paying bribes on behalf of up to 25 multinational firms over more than a decade.
The massive global conspiracy was uncovered publicly by The Age and The Sydney Morning Herald in 2016 and led to official corruption investigations across the world.
Cyrus Ahsani, 51, and Saman Ahsani, 46, the brothers who ran Unaoil, have each pleaded guilty in the US to one count of breaching America’s far-reaching Foreign Corrupt Practices Act. The pair will appear before a Texas court for sentencing this year.
AFP investigators, working with authorities in the US and Britain, have seized more than 2 million documents, obtained evidence from 10 countries and provided evidence to foreign agencies to assist with prosecution.
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.