Quebec firm to pay $10M to avoid charges over bribes promised to Philippine officials

The court approved the deal with Ultra back in February but it wasn’t until May 16 that it released the ruling, a copy of which was obtained by The Canadian Press.

The firm sells ballistic identification technology to police forces all over the world to help solve gun crimes.

“We welcome the approval of the remediation agreement related to a historical contract in the Philippines,” Ultra CEO Alvaro Venegas said in an email.

“No one implicated is involved with the company today. The conduct in question occurred more than five years ago, and we have since put in place significantly enhanced management, culture, systems and controls.”

In September 2022, the RCMP announced fraud and bribery charges under the Corruption of Foreign Public Officials Act against the company and four of its executives, Robert Walsh, Philip Timothy Heaney, René Bélanger and Michael McLean. The cases against the individual executives continue, while the charges against the company are stayed and will be withdrawn if it complies with the remediation agreement.

The agreed statement of facts attached to the court’s ruling says two senior officers at the company were involved in a scheme from 2006 to 2018 to bribe Philippine officials to secure $17 million in contracts with the Philippines National Police.

Commission payments used to mask the bribery totalled just under $4.4 million, although the “exact amounts of bribes paid, and to whom they were paid, is not available in the evidence,” the statement of facts says.

But it says the bribes were “earmarked and promised to” public officials and others with “sufficient gravitas to exert some influence” on those involved in the procurement process.

The statement of facts says the public officials included Ronaldo Puno, who was secretary of the Department of Interior and Local Government from 2006 to 2010. It says Puno “was a key figure in securing the budget and ensuring the procurement of” the company’s flagship ballistics identification product.

The statement says that beginning in September 2006 through January 2018, two senior company officers enlisted the help of “commercial agent” Rizalino Espino in Manila to help lock down the police contracts.

Espino’scompany, Concept Dynamics Enterprises, was to receive commissions on a percentage of any contracts, of which “a substantial portion” was intended as bribes.

The statement says Espino enlisted a pair of local businessmen to help with the bribery scheme because of their”close relationship” to Puno and his brother Rodolpho Puno, who was chairman of the Philippines Road Board at the time.

Espino, the statement says, agreed to “work his contacts to get the Puno brothers on board,” while another associate who was a retired police general worked contacts within the police force, including the chief and its logistic director.

The statement says that over 12 years, Espino and an associate were given “ample latitude” by Ultra Electronics’ employees “to work on the payment of bribes to public officials and their entourage.”

But the scheme unravelled after Ultra’s president received a letter in April 2018 from a former sales agent alleging corrupt practices.

By then, Ultra had been acquired by a new parent firm in the United Kingdom, and the company co-operated extensively with the RCMP and British authorities during the bribery investigation and also fired the employees involved in 2019.

The Public Prosecution Service of Canada issued a statement about the remediation agreement on May 17, saying Ultra would have to pay a penalty of $6,593,178, a surcharge of $659,318 and forfeit $3,296,589 “for the advantage obtained from the wrongful conduct.”

It says the Superior Court of Quebec “anticipates that approving this agreement will encourage corporations to voluntarily disclose wrongdoing.”

Prosecution service guidelines say that remediation agreements “are used in appropriate cases as an alternative to prosecution and serve as a means to hold organizations accountable while putting in place measures to mitigate the risk of future offences and harm to third parties, such as employees, victims and investors.”

Remediation agreements can only be struck with organizations and are not available to individual criminal defendants.

Their use was at the heart of a political storm in 2019 when former attorney general Jody Wilson-Raybould said she was improperly pressured by Prime Minister Justin Trudeau to allow a remediation agreement to be negotiated with SNC-Lavalin related to corrupt dealings in Libya. She refused to do so and attributed her subsequent demotion to this, which Trudeau denied.

A separate deal between Quebec prosecutors and SNC-Lavalin in 2022 saw the firm agree to pay $29.6 million over three years to settle criminal bribery charges stemming from bridge work in Montreal.

In the case of Ultra Electronics, the federal prosecution service struck the deal with the company shortly after the fraud and bribery charges were announced and the court approved the agreement in February.

The release of the ruling and statement of facts was held up as several details required redactions because of the ongoing cases against Walsh, Heaney, Bélanger and McLean.

Lawyers for Heaney, Bélanger and McLean did not respond to requests for comment.

Eric Sutton, who represents company founder Walsh, said in an email that “given that charges are pending, my client has nothing to say at this time.”

This report by The Canadian Press was first published May 31, 2023.

Darryl Greer, The Canadian Press

by Canadian Press

Quebec firm to pay $10M to avoid charges over bribes promised to Philippine officials

Pro Tips