Former TOR MD pays over $300,000 to settle US SEC bribery case
A former Managing Director of the Tema Oil Refinery, Asante Berko has settled a claim by the US Securities and Exchange Committee (SEC) that he arranged for millions of dollars in bribes to be paid to government officials in Ghana to help a client win a power plant contract.
Mr Berko, a former executive at Goldman Sachs Group Inc's London subsidiary, is to pay about $329,000 to resolve the US SEC's case without admitting or denying the regulator’s allegations, according to court filings obtained by the Wall Street Journal.
The penalty represents what regulators say are the net profits he gained as a result of the alleged bribery scheme, plus interest.
“Mr Berko is pleased to put this matter behind him,” said his lawyer, Carl Loewenson Jr., a partner at the law firm Morrison & Foerster LLP.
It will be recalled that Mr Berko resigned as TOR MD on Wednesday, 15th April 2020, following allegations he facilitated the payment of bribes to some persons in government as well as parliamentarians between 2015 and 2016 in a power deal. He denied those allegations.
At the time, he clarified in a statement that although the US SEC had initiated proceedings against him, allegations that he bribed government officials and MPs were completely false.
“While it is true that the SEC has just this week issued such proceedings against me, the allegations that government officials and members of Parliament were bribed by me are completely false,” he said
“I state categorically that I have not paid any bribes to government officials, Members of Parliament nor any officials of Parliament. I have had no contact with Members of Parliament nor officials of Parliament, regarding the approval of this transaction,” he said in the statement.
In April 2020, Mr Berko was charged by the US SEC for “orchestrating a bribery scheme” and arranging at least $2.5 million in bribes to be paid to Ghana government officials and also bribing Members of Parliament.
The payment was allegedly made to gain approval for a client’s power plant project from “2015 through at least 2016,” according to court documents from New York.
The government officials, along with the companies, were not named in the court documents.
The Securities and Exchange Commission said the former banker in question, one Asante Berko, arranged the bribes for a Turkish energy company to funnel the money to a Ghana-based intermediary.
The local company then allegedly made the payments to government officials.
“From approximately 2015 through at least 2016 (the “relevant period”), while employed at the Subsidiary [Goldman Sachs Group Inc], Berko schemed to bribe various government officials in the Republic of Ghana (“Ghana”) so that a client of the Subsidiary, a Turkish Energy Company (the “Energy Company”), would win a contract (the “Power Purchase Agreement”) to build and operate an electrical power plant in Ghana and sell the power to the Ghanaian government (the “Power Plant Project” or “Project”).”
Mr. Berko is reported to have arranged for the Energy Company to funnel between $3 million to $4.5 million to a Ghana-based intermediary company “to bribe various government officials responsible for approving the Power Plant Project.”
The Energy Company is said to have transferred at least $2.5 million of the planned $3 million to $4.5 million to the Intermediary Company.
“All or most of which was used to bribe Ghanaian government officials,” the court documents noted.
In addition to the bribes paid through the intermediary company, Mr. Berko also paid bribes to some Members of Parliament.
“By August 2015, Berko had paid bribes of at least $66,000 to members of the Ghanaian parliament and other government officials in his effort to obtain approval for the Power Plant Project.”
Mr Berko is said to have also helped the Intermediary company pay smaller bribes, “totalling approximately $210,000, to various other government officials involved in the Power Plant Project.”
“These included bribes to a Ghanaian government official (“Government Official 2”) who assisted Government Official 1 on the Project, employees at the Ministry of Power who provided confidential information to the Intermediary Company concerning the Project, government engineers who assessed the Energy Company’s technology, and officials at other government agencies who reviewed the Project.”
The court documents said Mr Berko was paid $2 million for “facilitating the bribery scheme.”
“Following his departure from the Subsidiary, Berko began providing consulting services for the Energy Company,” the documents also noted.
What Berko stood to ‘profit’
According to the court documents, Mr Berko sought to “profit from the bribery scheme” in two ways.
Because he said to have been aware that the Subsidiary would earn over $10 million in fees if the Energy Company secured the Power Plant Project.
This, in turn, was expected to “enhance Berko’s performance and stature within the Subsidiary.”
Also, by at least July 2015, Mr Berko was assured that the Energy Company “would secretly compensate him for arranging the bribe scheme.”
This was “unbeknownst to the Subsidiary and in violation of Berko’s employment agreement with the Subsidiary.”
Between September 2016 and February 2017, the Energy Company allegedly paid Berko $2 million for successfully coordinating the bribery scheme.
How the SEC found out
Mr Berko is said to have taken “deliberate measures” to prevent his own firm and subsidiary’s compliance personnel “from discovering his corrupt scheme.”
First, Mr Berko used his personal email rather than his work email “to arrange the bribery scheme in order to evade detection.”
“Berko knew that Subsidiary and/or Holding Company compliance personnel could review his work email as part of their periodic and/or project-related due diligence,” the court documents explained.
Secondly, Mr Berko “intentionally failed to correct a critical document” meant for the Holding Company “that falsely stated that the Energy Company had not compensated any intermediaries or politically exposed persons in connection with the Power Plant Project.”
“Despite Berko’s efforts to conceal his misconduct, the Holding Company required additional due diligence to further assess the potential reputational risks associated with the Project and to address other concerns.
As part of this diligence, during March 2016, compliance personnel at the Subsidiary reviewed Berko’s emails and discovered the involvement of the Intermediary Company.
After interviewing Mr Berko about the Intermediary Company, they began further investigations into the matter.
Find below the US SEC statement on the matter
The Securities and Exchange Commission on Monday charged a former executive of a financial services company with orchestrating a bribery scheme to help a client to win a government contract to build and operate an electrical power plant in the Republic of Ghana in violation of the Foreign Corrupt Practices Act (FCPA).
The SEC’s complaint alleges that Asante Berko, a former executive of a foreign-based subsidiary of a U.S. bank holding company, arranged for his firm’s client, a Turkish energy company, to funnel at least $2.5 million to a Ghana-based intermediary to pay illicit bribes to Ghanaian government officials in order to gain their approval of an electrical power plant project. The complaint further alleges that Berko helped the intermediary pay more than $200,000 in bribes to various other government officials, and Berko personally paid more than $60,000 to members of the Ghanaian parliament and other government officials. According to the complaint, Berko took deliberate measures to prevent his employer from detecting his bribery scheme, including misleading his employer’s compliance personnel about the true role and purpose of the intermediary company.
“As alleged in our complaint, Berko orchestrated a scheme to bribe high-level Ghanaian officials in pursuit of firm business and his own enrichment. Berko’s misconduct was egregious and individual accountability remains a key component to our FCPA enforcement efforts,” said Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit. “The firm’s compliance personnel took appropriate steps to prevent the firm from participating in the transaction and it is not being charged.”
The SEC’s complaint, filed in the U.S. District Court for the Eastern District of New York, charges Berko with violating the anti-bribery provisions of the FCPA and federal securities laws. The SEC is seeking monetary penalties against Berko among other remedies.
The SEC’s case is being handled by Asita Obeyesekere and Paul G. Block of the FCPA Unit and Kathleen Shields, Mark Albers, and Marty Healey of the Boston Regional Office.
Find below copy of a Statement from Carl H. Loewenson, Jr. from Partner, Morrison & Foerster LLP, New York, New York, lawyer for Mr Berko
June 25, 2021
Certain media reported today that our firm’s client, Asante Berko, has been found guilty by the United States Securities and Exchange Commission. This statement is false.
In fact, Mr. Berko recently settled a case with the U.S. Securities & Exchange Commission without admitting or denying the allegations in the SEC’s complaint. Neither the SEC nor the court found Mr. Berko guilty. Mr. Berko settled with the SEC, and the SEC’s case is now closed.
In their complaint, the SEC alleged that Mr. Berko had received $2 million as compensation from a Turkish energy company “for arranging the bribery scheme.” The SEC sought disgorgement of those allegedly “ill-gotten gains,” plus interest, plus a monetary penalty. Even before Mr. Berko responded to the SEC’s complaint, the SEC agreed to settle for disgorgement of $275,000 (plus interest), with no penalty. The payment by Mr. Berko is not a fine or a penalty.