Niko Resources: Ottawa’s corruption test case in Bangladesh
By Bangladeshi standards, the red-brick compound of A.K.M. Mosharraf Hossain is a country estate. A four-foot wall encircles the property in the capital city of Dhaka. The only way inside is past a guard booth and a metal gate that leads to the politician’s roundabout driveway.
But there was no problem gaining admission on May 23, 2005, when two representatives from Niko Resources (NKO-T48.93-0.06-0.12%) , a Canadian natural gas company, arrived at the gate. They were waved through with a brand-new, shiny gift—a black Toyota Land Cruiser. The two Niko officials, both Bangladeshi, stood by while the car keys were handed over to Hossain’s driver.
This sort of thing is a routine transaction in many Third World countries—yet this one would go down in legal history.
This past June, slightly more than six years after the delivery of that $190,000 vehicle, lawyers for Niko stood before an Alberta Court of Queen’s Bench judge and, on behalf of the company, pleaded guilty to bribing Hossain, then Bangladesh’s state minister for energy and mineral resources.
The $9.5-million fine Niko agreed to pay was heralded as the arrival of a new era in white-collar law enforcement. The RCMP had officially waded into the shadowy intersection of big business and foreign powers, and enforced the Corruption of Foreign Public Officials Act, enacted in 1998. Canadian multinationals were put on notice—just because you are overseas doesn’t mean you aren’t being watched. “Canada and Alberta will not stand by and let this happen,” Steven Johnston, head of Alberta’s special prosecution branch, told Mr. Justice Scott Brooker at the hearing.
But, for about a decade, that’s exactly what government did. The two-hour hearing was a long-fated collision of three dynamic forces—an ambitious and daring company; one of the most corrupt countries in the world; and the international movement to crack down on payoffs.
Still, the hearing only revealed a smidgen of the evidence that the RCMP unearthed. It took the Justice Department and the Mounties a long time to start seriously enforcing Canada’s foreign bribery laws, but once they started digging, it took them to some surprising places—including Parliament Hill.