Monday, October 26, 2020

UK’s MP Liam Fox lobbied Bahraini royals for oil contract to firm under corruption probe

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A Conservative minister personally lobbied the Bahraini royal family to give a multi-billion dollar oil contract to a company under investigation for suspected bribery and money laundering.

The intervention from Liam Fox, who was international trade secretary at the time, was one of several attempts by senior Conservatives to help Petrofac, which is headed by a major Tory party donor, to secure the $5bn contract.

The Guardian has previously revealed that two former Conservative prime ministers, Theresa May and David Cameron, lobbied the Bahrain royals to award the contract to Petrofac, before it was publicly known the company was being investigated by the Serious Fraud Office (SFO).

However, newly–released documents reveal Fox wrote a letter to the Bahraini crown prince promoting Petrofac four months after the SFO announced an investigation into the firm for suspected bribery, corruption and money laundering.

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On the same day as the SFO announced it was investigating Petrofac in 2017, the firm said its chief executive, Ayman Asfari, had been arrested and interviewed by the SFO during the investigation, along with others.

Asfari, who is the firm’s co-founder and largest shareholder, was released without charge. The SFO’s investigation into the firm, which is not believed to relate to Bahrain, is ongoing.

Asfari and his wife donated almost £800,000 to the Conservative party between 2009 and 2017 in a personal capacity.

A Department for International Trade spokesperson said: “The government supports British business at home and abroad, including backing companies when they bid for international opportunities. This was the case for Petrofac. The then trade secretary followed the correct processes, carried out with due propriety throughout.”

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The spokesperson declined to say if Fox had sought advice as to how to manage any perceived conflicts of interest arising from Asfari’s political donations. Fox declined to comment.

Petrofac said official support was obtained through normal channels, with the backing of the British ambassador to Bahrain. The contract was later awarded to another firm.

A spokesperson said: “Petrofac does not make political donations. Any donations by Ayman Asfari and his family are made in a strictly personal capacity. Any suggestion that Mr Asfari’s donations were the basis for preferential treatment by government for Petrofac are entirely false.”

In 2017, Petrofac, which designs and builds facilities for the oil and gas industry, was bidding for the contract to expand a Bahraini state-owned refinery in competition with other firms.

In January that year, Cameron, who had resigned as prime minister in 2016, visited Bahrain. After the two-day visit, Cameron was flown back to Britain on a plane belonging to Asfari. He has said that he carried out a “wide-ranging schedule of engagements” with the British ambassador and promoted Petrofac “in coordination with the UK government at the time”. He has said he “was not paid anything for this engagement and his support for the company had nothing whatsoever to do with donations made to the Conservative party”.

In March 2017 Fox, while international trade secretary, wrote to May telling her that Asfari had asked the British government to promote Petrofac’s bid for the refinery contract as Asfari believed that “high level government support could make a substantial difference”.

At Fox’s request, May wrote to the Gulf state’s prime minister, another member of the Bahraini royal family, to promote Petrofac’s bid. It was sent the day after Fox met Asfari in his Whitehall office.

Fox’s direct contact with the Bahraini royal family in 2017 is revealed in documents that have been released to the Guardian under the freedom of information act.

On May 11, Fox rang the Bahraini crown prince, Salman bin Hamad al-Khalifa, to discuss Petrofac’s bid for the refinery contract. The following day, the SFO announced that it had launched an investigation into Petrofac over suspected bribery, corruption and money laundering.

Four months later, on September 28, Fox wrote to the crown prince about Petrofac’s bid for the contract.

“I very much appreciate the constructive engagement that has taken place between our governments as competition for the [refinery contract] has progressed,” Fox began.

He recalled that May had met with the King of Bahrain at Sandhurst in April and discussed how the contract could “further the bilateral economic relationship”.

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Fox added that he had called the crown prince in May “to explain the offer of financing support from the UK as well as my confidence in the bid submitted by Petrofac and their consortium partners”.

Fox added: “I understand that Petrofac has been identified as one of the top two bidders for this project and therefore very much hope that they will be called back for an opportunity to present their final proposal to BAPCO [Bahrain’s state-owned oil company].

“Petrofac have been able to improve on their original bid in a number of ways and it would be beneficial, I am sure, for the tender board to make a final evaluation of the best two bids on their merits.” Fox also asked to talk further with the crown prince.

Asfari, who reportedly has an estimated $1bn fortune, has headed Petrofac for two decades after co-founding it in 1991.

In 2014 Cameron appointed Asfari to be one of 43 prime minister’s business ambassadors, selected by the British government to promote trade and investment. The scheme was closed last year.

A former Petrofac executive, David Lufkin, is waiting to be sentenced after pleading guilty last year to 11 counts of offering bribes between 2011 and 2016, in an attempt to secure contracts for the firm in Saudi Arabia and Iraq.

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