US firm admits to paying $1.1 milion bribe to NHAI

NEW DELHI: A Boston-based consultancy firm has admitted to the justice department of the United States that its officials paid bribe of $1.18 million (approximately Rs 6.7 crore) to NHAI officials between 2011 and 2015, prompting the highways authority to launch a probe into the payments.

The company, CDM Smith, has agreed to pay $40,371,38 (approximately Rs 25 cr) to the US Treasury, which it earned as profit from "illegally obtained" works for highway construction supervision and design contracts and a water project contract in Goa. The company will pay the entire amount in four instalments by October 1, 2017, an official communication from the US justice department said.

It mentioned that the company's division for India operations and CDM India paid bribes to receive contracts from NHAI. "The bribes generally were 2-4% of the contract price and paid through fraudulent subcontractors, who provided no actual services and understood that payments were meant to solely benefit the officials," the department said in its June 29 communication to the company.

It added that CDM Smith's division responsible for India and CDM, India, paid $25,000 to officials in Goa in relation to a water project contract. "All senior management at CDM India (who also acted as employees and agents of CDM Smith and signed contracts on behalf of CDM Smith, including CDM India's country manager) were aware of the bribes for CDM Smith and CDM India contracts, and approved or participated in the misconduct," the justice department said.

The criminal division of the US justice department closed the investigation after the company paid the entire amount it made through "illegal conduct".
An NHAI official said the matter will be probed to identify who all took bribe money from the company. The self-disclosure by the US firm has once again pointed to usual perception of money changing hands in highway contracts and it will be another acid test for the authority to find out the officials who made money illegally.

TOI has learnt that CDM Smith has replaced most of its executives at its India office after 2015.

The company has also put a public notice on its website saying it has reached agreements with the US Department of Justice (DoJ) and the World Bank Group (WBG) for "self-reported improper business activities conducted by a few individuals in the firm's India and Vietnam operations. The employees associated with these improper business activities were separated from the company following the early findings of CDM Smith's internal investigations".

It said the company self-discovered and self-reported potential infractions to DoJ and the World Bank. "CDM Smith has a clear Code of Ethics and core values that drive our behaviour every day," said Stephen J Hickox, CDM Smith chairman and chief executive officer. "Any breach of these values or improper business activities is counter to our culture and will not be tolerated."