The US Federal Bureau of Investigation (FBI) had put up the corruption story of BNP chairperson Begum Khaleda Zia’s youngest son, Arafat Rahman Koko, on its website much before the Bangladesh court sentenced him to six years in jail for laundering $250 million to Singapore.
Arafat died in Malaysia on January 24, 2015, due to a cocaine overdose in Malaysia. He was exiled by the caretaker regime of 2007-08 after his conviction in a money laundering case, which his lawyers claimed was fabricated.
On its website, the FBI provided a detailed story of the bribery as the US Department of Justice sought to recover approximately three million dollars from the foreign bribe payments deposited into Koko’s joint account in Singapore.
DOJ investigation into Siemens and Niko
In 2009, the United States Department of Justice (DOJ) filed a successful application seeking forfeiture of money in three foreign bank accounts — one of which was controlled by Arafat “Koko” Rahman, the younger son of Khaleda Zia.
The DOJ application read, “As a result of interviews and analysis of financial records, it was determined that ‘Koko’ received bribes from several companies, including Siemens Bangladesh Limited and China Harbor Engineering Company. As the prime minister’s son, Koko in most cases was paid ‘protection money’ to ensure that he did not use his influence to obstruct the award process.”
According to the DOJ, the total bribes that Koko received from these two companies totalled $19 million This money was put into an account held by a company, set up for Koko, called ZASZ Trading and Consulting Private Limited. Investigators found approximately $20 million in the ZASZ bank account at United Overseas Bank in Singapore. The person who set up the account for Koko stated in an interview that there were no other transfers into the ZASZ account and that the extra money in it was interest from the deposited funds and thus directly traceable to the original criminal proceeds.
Siemens admitted that, from 2001 to 2006, the company facilitated a bribery scheme by engaging local “business consultants” whose sole function was to launder bribes. The company would pay bribes to various Bangladeshi officials and their family members in exchange for favourable treatment for its mobile network project. And this included bribes paid to Koko.
One of the business consultants hired by Siemens to facilitate bribery, Zulfikar Ali, confirmed that he knew the money he was paid by Siemens was to be used to pay bribes in order to assist Siemens winning the bid, and that both he and Siemens knew that if relatives, such as Koko, were not paid money, they could, by virtue of their proximity to the Bangladeshi prime minister, kill the project. The DOJ investigation revealed that Siemens paid at least $5.3 million in bribes to get the contract.
China Harbour Corruption Cases
In 2003, China Harbor Engineering Company was bidding on a tender for building the New Mooring container terminal (NCT) in Bangladesh. The contract was valued at approximately $131,000,000. The DOJ investigation revealed that, similar to the mobile network project, “payments were made to Koko to influence the bidding process and to ensure that Koko would not obstruct the award of the project to China Harbor.”
China Harbor was awarded the project. According to a Memorandum of Understanding (MOU) dated December 5th 2004, the company agreed to pay at least 19 crore taka to its Bangladesh representatives (for winning the contract) and to “AKM Musa Kajol […] for payment to other officials.” AKM Musa Kajol was a director of Gatco, a Bangladeshi company dealing with container handling. According to DOJ investigators, a portion of this money was used to pay Koko in relation to the NCT project. The son of the former inland marine minister also confessed that he and Koko received bribes from China Harbor.
Payments for Koko in connection to the NCT project were sent to him via wire transfer in around May 2005, when two transfers of $626,828 and $565,359 were made from China Harbor to the ZASZ account account in Singapore. In August 2005, the ZASZ account in Singapore received another wire transfer of $564,658 from China Harbor.
The US conducted massive investigation into the bribery through federal agencies and recover the money because those were paid in US dollars involving American intermediary banks and it went in line with US’s 2006 policies to ‘internationalize efforts against kleptocracy’ to fight high-level corruption around the world.
According to the website, the justice department filed a forfeiture action against Koko’s accounts worth nearly three million dollars that are alleged to be the proceeds of a wide-ranging conspiracy to favour two foreign companies to achieve deals and earn commissions from two separate public sector projects.
Acting Assistant Attorney General Matthew Friedrich of the Criminal Division announced that the forfeiture action was filed on January 8, 2009, in U.S. District Court in the District of Columbia against funds located in Singapore held by Koko and his multiple bank accounts.
FBI said the forfeiture complaint relates primarily to bribes paid to Arafat Rahman “Koko”, the son of the former Bangladesh prime minister Begum Khaleda Zia, in connection with projects awarded to German Siemens AG and China Harbor Engineering Company.
According to the complaint, the majority of funds in Koko’s account were traceable to bribes allegedly received in connection with the China Harbor project, which was a project to build New Mooring container terminal at Chittagong port.
“This action shows the lengths to which U.S. law enforcement will go to recover the proceeds of foreign corruption, including acts of bribery and money laundering,” said Matthew Friedrich in 2009.
“Not only will the Department, for example, prosecute companies and executives who violate the Foreign Corrupt Practices Act, we will also use our forfeiture laws to recapture the illicit facilitating payments often used in such schemes,” Mathew vowed.
Siemens Aktiengesellschaft (Siemens AG) and three of its subsidiaries pleaded guilty on December 15, 2009, to violations of and charges related to the Foreign Corrupt Practices Act (FCPA).
Specifically, Siemens Bangladesh admitted that from May 2001 to August 2006, it caused corrupt payments of at least $53 million to be made through purported business consultants to various Bangladeshi officials in exchange for favorable treatment during the bidding process on a mobile telephone project. At
least one payment to each of these purported consultants was paid from a U.S. bank account.
According to the forfeiture complaint, the bribe payments from Siemens AG and China Harbor Engineering Company were made in U.S. dollars, and the illicit funds flowed through financial institutions in the United States before they were deposited in Koko and his partner’s accounts in Singapore, thereby subjecting
them to U.S. jurisdiction.
The Bangladesh anti corruption commission (ACC) filed case against Koko on March 17, 2009, pinpointing his involvement in bribery from two government projects- building a new container terminal and establishing a state owned mobile phone company.
The anti corruption watchdog said the money were siphoned off to Koko’s Singapore account. Before the FBI website uploading of the Koko’s corruption story a World Bank-UNODC publication also mentioned the alleged embezzlement of three million dollars by BNP chief Khaleda Zia’s younger son as an example of stealing national assets.
Titled “Asset Recovery Handbook,” the publication was released two days ago in Vienna and obtained by BSS. It was prepared under the Stolen Asset Recovery (StAR) Initiative of the WB in association with the United Nations Office on Drugs and Crime (UNODC).
The 270-page book cited Arafat Rahman Koko’s case on page 53 and page 196 while discussing the issues relating to prosecution of accounting and establishing jurisdiction for legal proceedings.
Koko is now a fugitive and been reportedly living in Malaysia, where he moved from Thailand, a place he was allowed to stay and seek treatment for his ill health. He was arrested on September 2, 2007 and was released on parole for treatment in Bangkok on July 17, 2008. His parole expired on August 19, 2010 and was asked to return home immediately.
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