How Rolls-Royce Bribed Its Way Around the World

Rolls Royce, a British icon, faces accusations of corruption through systematic use of agents/middlemen for bribery to secure contracts.

Political Crisis in Brazil: Triggered by widespread corruption involving politicians and state officials.
Petrobras: Brazil's state oil company, a major player producing 2,000,000 barrels of oil daily, relies on equipment from foreign companies like Rolls Royce.
Rolls Royce's Involvement: One contract with Petrobras was valued at $100,000,000$ .
Pedro Burushko: A Petrobras executive, revealed companies involved in bribery. He identified Rolls Royce as one of the companies that paid bribes so he could handle deposits.
Rolls Royce Bribes: Paid via middlemen, with Burushko receiving at least $200,000$ USD from the $100,000,000$ contract.
Consultants: Commonly used by foreign companies to deliver bribes to directors or politicians.
Public Perception: Rolls Royce's reputation in Brazil is damaged; seen as a significant part of the corruption problem due to its global power and wealth.

Current Focus: Primarily building engines for aircraft (car division sold to BMW).
UK Employment: Employs 23,000 people in the UK.
Growth: Experienced spectacular growth with sales tripling and profits increasing fivefold over fifteen years.
Investigation: The Guardian newspaper and the Serious Fraud Office (SFO) are investigating Rolls Royce's use of dubious middlemen to secure contracts in corrupt countries.

SFO Investigation (2013): Investigating how Rolls Royce won jet engine contracts.
Whistleblower: A former employee alleged a $20,000,000$ bribe was paid to Tommy Suharto (former president's son) to ensure Indonesia's main airline used Rolls Royce engines.
Prima Facie Evidence: Paying bribes to people closely linked to senior politicians is considered prima facie evidence of corruption.

Second Whistleblower (Soaring Dragon, 2011): Suggested Rolls Royce paid bribes to win contracts at two airlines in China.
Mechanism: Bribes paid to a Chinese airline executive through a middleman.
Chinese Authorities: Investigated, convicted, and jailed the airline executive for life, but no action against Rolls Royce.
Contracts Secured: Rolls Royce secured contracts worth $2,000,000,000$ from two Chinese airlines during the period the bribes were allegedly paid.

Middlemen: Rolls Royce uses middlemen to facilitate work in corrupt countries. Lindsay Mitchell worked for UniOil (Monaco based company), also under investigation by the SFO.
Confession: Mitchell admits to bribing an oil official to help a client win business, referring to it as a "facility payment" or "commission."
Rolls Royce's Knowledge: Mitchell believes UniOil paid bribes for Rolls Royce, suggesting that someone within Rolls Royce management knew about these payments.
Leaked Emails: UniOil emails suggest paying bribes was commonplace, and some involved Rolls Royce.
Examples from emails:
- An email showing that UniOil put aside $284,000$ for middlemen on a Rolls Royce job in Iraq.
- Another shows how gifts were bought for an official involved with the contract, spending more than $2,000$ on luxury goods.
Rationale: The emails explicitly state that spending a small amount on a key decision-maker is worth a hundred times that value.

Previous Issue: Rolls Royce offered to repay £ $1,800,000$ commission secretly paid to a middleman in 2014.
Defense Contracts: The most serious questions relate to defense deals where large sums of money change hands.
Hawk Jet Deal: Rolls Royce supplied engines for the Hawk jet, earning around £ $400,000,000$ from the Indian government.
Sudhir Chowdhury: A London-based billionaire and advisor on India to the Liberal Democrats who is allegedly a secretive middleman involved in Rolls Royce's defense deals.
Illegality: It is illegal to pay secret middlemen to win defense contracts in India.
Anonymous Source: Confirmed that someone from Chowdhury's team approached him for an introduction to the government regarding the Hawk deal.
Payments: Panorama understands Rolls Royce secretly paid around £ $10,000,000$ to companies owned by the Chowdhury family.
Undesirable Contact Men List: Sudhir Chowdhury is on the Indian government's blacklist of individuals suspected of corrupt practices, manipulation of defense procurement

Banu Chowdhury, the son of Sudhir Chowdhury, is suspected of helping Rolls Royce win the Hawk deal.
Peter Ginger, who played a key role in selling military jets with Rolls Royce engines to the Indian government, visited Switzerland with Banu Chowdhury in 2007 and opened a Swiss bank account under the name of Portsmouth.
Ginger's account later showed a million Swiss francs.
Ginger refused to answer direct questions about whether the money was a bribe.

SFO Investigation: Thirty investigators are working on the Rolls Royce case.
US Investigation: A separate investigation is underway in the United States.
Potential Penalties: Rolls Royce could face enormous fines, and employees could be jailed.

Reputational Damage: Rolls Royce's actions damage its brand and the UK's reputation.
Corruption and Instability: Bribing for contracts promotes corruption, making the world more unstable and less democratic.

Zero Tolerance: Rolls Royce states it has zero tolerance for bribery and corruption and has intensified its focus on ethics and compliance.
Business Model Change: Bribing is no longer an option for Rolls Royce.