What is Louis Berger Case is all about? Are Congressmen involved as alleged?

Louis Berger bribery case is taking its toll in Goan politics with the skeletons in closet getting exposed into the media. The news published earlier by us Minister Bribed $1 Million for Goa Project explains as how the whole issue came into the light with the US government intrusion into this matter but then it was just a tip of an iceberg as after the publication of this news in  media everyone seems to have awaken from the deep sleep and started cashing on it. The ruling government started blaming the opposition as they were in power when this alleged transaction took place.

Nevertheless, let’s find out what this Louise Berger issue is all about and how the name of Goa reflected into this. According to the information made available on the Louis Berger website, the company has been engaged into providing consultancy services on various projects in India. Some of the projects include Mumbai Metro Line 1, Maharashtra Energy Distribution, Protecting Taj Mahal and Guwahati Water Supply. According to the information revealed by the US Justice Department, the New Jersey based construction management company Louis Berger International Inc. (LBI) bribed the officials in India to secure contracts and two of the directors who were suppose to be the Indian arm of Louis Berger Group had resigned from their posts.

Under the US law FCPA (US Foreign Corrupt Practices Act) LBI admitted the violations and agreed to pay the penalty of US $ 17.1 million to resolve the bribery charges. Accordingly the US Justice Department informed on 17 July that the company was involved in malpractices in several Asian and Middle East countries including India, Indonesia, Vietnam and Kuwait. The Justice Department said that the company was accused of bribing officials in India to win two major water projects in Goa and Guwahati. The beneficiaries of $ 9, 76,630 allegedly paid to the minister for the Goa project in August 2010.  “The bribe money was disguised as payments to vendors for services that had never actually rendered,” mentioned in the US district court documents.

According to the reports, the Louis Berger Group company was a consultancy consortium with two Japanese firms and an Indian partner appointed to manage the $ 311 million Goa water supply and sewerage project awarded in 2009. On August 26, 2010, “a consortium partner prepared a payment tracking schedule stating that the company had paid USD 976,630 in bribes in connection with the Goa project to date,” federal prosecutors told a court in New Jersey. On August 17, 2010, a consortium partner sent an email to James McClung, its then India representative, saying, “As discussed I enclose the details as provided by [third-party intermediary]. I have also added the details of amounts paid to [the Company] as of date by [the consortium partner] in the same sheet.” The attachment included an entry, “Paid by [an agent of the company] to minister on behalf of agent,” federal prosecutors said. The Louis Berger Group has now replaced McClung with Ivan Keogh. McClung, along with Richard Hirsch, the former executive responsible for operations in Indonesia, Thailand, the Philippines and Vietnam, pleaded guilty to one count of conspiracy to violate the FCPA, and one substantive count of violating the FCPA. Louis Berger spokesperson Regine de la Cruz said that as part of an expansive corporate reform programme that began in 2010, the company had conducted an extensive internal investigation into its business activities outside the US, including India, in 2010 and earlier. “The company self-investigated and self-reported inappropriate business activities to the US government as we uncovered them. We separated Richard Hirsch (one of the senior employees charged) and James McClung, the managers engaged in inappropriate conduct, from the company in the first half of 2012 after evidence of improprieties came to light. The FCPA issues involved activities by these former managers identified between 1998 and 2010,” de la Cruz said in response to an email query from The Indian Express. The spokesperson said that in the last five years, Louis Berger had invested over $ 25 million into “new systems, policies and people” to transform the culture of the company, which includes instituting a new leadership team in India and Asia. In India, LBI has a representative office and a consulting arm with offices in Delhi, Gurgaon, Mumbai, Chennai and Hyderabad. According to the RoC filings, the consulting arm, Loius Berger Consulting, has a paid-up capital of Rs 33.69 lakh, and the company made a profit of Rs 10 crore in the financial year 2012-13 [according to the latest available data].


Following the revelation of Louis Berger the Defence Minister and Chief Minister of Goa demanded the immediate enquiry into the matter by CBI “When the contracts were awarded, Digambar Kamat was chief minister and Churchill Alemao was public works department minister. Now, it should be revealed which minister took the bribe.” Said Parsekar. He also continued saying that he will write to the Prime Minister asking him for CBI probe into this issue. “There is no question of holding back the project. The complaint made out by the US court is genuine and I am planning to write to the Prime Minister and the union Home Minister requesting them to order a CBI inquiry into the role of former ministers in the case,” Parsekar said.

When media tried to contact Kamat for his comments he was not available while Alemao tried to clarify that he was not the part of the technical committee and hence he played no role in the appointment of Louis Berger company A PWD minister does not appoint consultants in any project. That is decided by technical committees,” he said.

Source: TNN

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