US prosecutors plan to launch extradition proceedings tomorrow against a British citizen alleged to be the key figure in an international bribery scandal.
After more than five years of investigations covering half a dozen countries, a London solicitor, Jeffrey Tesler, has been arrested at the behest of US authorities and accused of being the "bagman" who conveyed $180m in bribes to Nigerian politicians, including one of the country's presidents.
Tesler is due to appear at Horseferry Road magistrates court in London tomorrow. If the extradition bid succeeds, he will face trial and possible jail in Texas.
He has hired William Clegg, a prominent defence QC whose clients have included the man eventually acquitted last year of the Jill Dando murder, Barry George, as well as major fraud defendants and alleged Balkan war criminals.
"Mr Tesler's stated position is that he strongly denies any wrongdoing and has acted at all times within the law," his solicitors told the Guardian.
The case against Tesler is outlined in a 29-page indictment issued by the US department of justice, published in full online by the Guardian. He is accused of spending a decade, between 1994 and 2004, conspiring to break America's foreign corrupt practices act, in a case which has already led to one of the largest corruption fines ever levied against a US corporation and which overshadowed the Bush-era vice-presidency of Dick Cheney.
London-based company executives seeking construction contracts are alleged to have described Tesler as their "cultural adviser".
The president of Nigeria for five years from 1993 was the notoriously corrupt General Sani Abacha, who looted the oil-rich west African state of billions before his death in 1998. Tesler is alleged to have arranged for $1m a time in $100 bills to be stacked into a leather case and delivered to a politician's hotel room in order to fund the Nigerian election campaigns in 2003 that returned President Olusegun Obasanjo to power.
Tesler, a former partner in a north London high street firm, holds Israeli dual nationality and a Swiss court says $2.26m of his assets have been moved into family accounts in Israel.
A US arrest warrant has been issued for a second Briton, a former company executive, Wojciech Chodan, also accused of breaching the foreign corrupt practices act. At his home in the Somerset village of Nunney, neighbours said Chodan had been away for a fortnight. Legal sources say UK prosecutors are willing to hand over Tesler and Chodan.
The developments have transformed a worldwide corruption inquiry into the $6bn received by an international consortium to build the Bonny Island natural gas plant in Nigeria. Investigations were first launched in France in 2003 and then taken up in Washington by a small team led by Mark Mendelsohn of the US department of justice. Help was given by the UK Serious Fraud Office, but little progress made.
The case was politically sensitive for years in the US because Cheney, although not personally linked to the alleged bribe payments, previously ran Halliburton, the US engineering giant whose subsidiary led the consortium.
Nigerian prosecutor Nuhu Ribadu, who headed an anti-corruption commission that sought initially to investigate the Bonny Island deal, was forced to flee to the UK. Now in exile, he says he was the subject of an assassination attempt when his bullet-proof car was sprayed with gunfire. "Corruption has taken over the engine of government in Nigeria," he said. "It's what runs everything."
Last year the Texan chief executive of the US construction subsidiary, Jack Stanley, was forced to admit taking personal "kickbacks" from his company's Nigerian slush funds. Now facing seven years in jail, he testified about the bribery in the hope of a reduced sentence.
Halliburton agreed in February this year to pay a record $579m fine, while its subsidiary, Kellogg Brown & Root, admitted meeting and agreeing to bribe "three successive former holders of a top-level office" in Nigeria.
The Swiss courts announced they would overrule legal objections and release bank records, including those linked to Tesler. The Swiss accounts include cash linked to Tesler's Gibraltar-registered vehicle, Tristar, and money passing through other secretive offshore entities in Panama, Liechtenstein, the Bahamas, the Turks & Caicos islands and the Seychelles.
Obasanjo, the ex-president, has been forced to defend himself publicly from allegations of corruption since the Tesler indictment was issued. Accused last month on US TV by investigative journalist Lowell Bergman of having been implicated by Stanley, he responded: "I've been investigated and reinvestigated and reinvestigated. Nobody can find corruption around me."
Obasanjo subsequently told the BBC the allegations against him personally were "absolute nonsense … I do not say that people in my government were not corrupt, but I am not corrupt".
The London connection
The developments in the Bonny Island case highlight repeated allegations from other countries that Britain has been soft on overseas bribery.
The British taxpayer helped finance part of the Nigerian deal and some of the evidence suggests key operations may have taken place in London to avoid strict US anti-corruption laws.
MW Kellogg Ltd, then a subsidiary of Halliburton, was eligible for UK taxpayer assistance because it was UK-registered and based at the Kellogg Tower in Greenford, west London.
Liz Symons, then Labour's trade minister, claimed Whitehall officials carried out "thorough and far-reaching scrutiny" before providing a loan guarantee in January 2003. Due diligence inquiries showed "no suspicions of corruption", the export credit agency ECGD claimed. Symons boasted publicly: "This is a good example of sound financial judgment going hand in hand with ECGD's business principles."
Shortly after her claim that "the highest standards have been met", a final $500,000 eve-of-election bribe instalment arrived in Abuja in April 2003, according to the Tesler indictment. The bulky naira notes were stacked in a vehicle, left to be discreetly picked up from a hotel car park by an official of the Nigerian state oil company, for use in political campaigning.
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