Losing your baggage after a long-haul flight is annoying and frustrating. Losing your suitcase when it contains over US$250,000 in hundred-dollar bills inside must be even more vexing. For Marc Cherqui, the former tax director of Bourbon, the French operator of over two hundred offshore support vessels, the recovery of his lost bag when he returned home to France from a business trip in Nigeria in October 2012 was only the beginning of his problems. The suitcase stuffed with cash was eventually re-united with its grateful owner at Marseille Airport.
Unfortunately, Mr Cherqui's relief was short-lived, as the French customs officers wanted know what was inside. They demanded that he open the bag in their presence for inspection. Whoops! Explaining why you are carrying a quarter of a million dollars of cash across an international border is tough, especially when EU anti-money laundering laws require sums of over ten thousand dollars to be declared to customs, something which Mr Cherqui had failed to do.
According to French court reports, he initially ignored the presence of the money in his suitcase, as if it wasn't there, and then started talking about the financial problems he was experiencing on account of his divorce, to explain the situation to the officers. As if most people in the middle of a divorce usually carry hundreds of thousands in cash around with them when returning from business trips. Strangely, the customs officers weren't buying this explanation, and they continued to press him on where the money in his luggage came from.
He finally explained to the investigators that he had gone to Africa to resolve a tax problem that Bourbon was experiencing there, following a Nigerian tax audit against the company. The cash was left over from a massive bribe he had paid to the tax authorities there to make the problem go away, he claimed. It is said that the truth will set you free. Sadly, for Mr Cherqui, what he claims is the truth about the contents of the suitcase has now seen him appear in court in Marseille, along with Bourbon as a company, his former bosses and several old colleagues.
"Mr Cherqui's allegations make lurid reading, and cast interesting light on corruption in Nigeria"
After the discovery of the quarter of a million dollars, and Mr Cherqui's confession, a French judicial investigation was launched. Mr Cherqui was fired and disowned by Bourbon, who claimed he was acting as a "loose cannon" with no authority from the company or its corporate officers. But, in the words of La Croix, the French newspaper, which broke the story of the trial, "Bourbon has found it easier to fire the former tax boss, than to escape the attention of prosecutors in France."
Finally, at the end of March this year, Bourbon as a legal entity; its Director General in 2012, Christian Lefevre; the COO at the time, and now the current Director General, Gaël Bodenes; and six other former executives, including Mr Cherqui, and Laurent Renard, the Deputy Director General, appeared in court charged with either the active bribery of public officials, or complicity in corruption, or both.
According to the prosecution, the investigation revealed that Bourbon had been bribing tax officers in Nigeria, Equatorial Guinea and Cameroon to reduce or remove tax demands after tax audits or tax assessments. The French media reported that about US$3.2 million had been paid in bribes for this purpose in 2011 and 2012. Worse, despite around one billion euros of turnover, Bourbon also paid no corporate tax in France, the French media has claimed, adding innuendo to the criminal charges.
Cherqui alleged that the Nigerian tax authorities were demanding a staggering US$227 million in fines from Bourbon for tax evasion. The former tax director claims that the Nigerian tax officers had agreed to reduce this amount to four million dollars, after the payment of US$2.7 million in bribes to them. He claimed that the US$250,000 found in the suitcase represented, "the remainder of the corruption operation," after his successful negotiations there.
Mr Cherqui's allegations make lurid reading, and cast interesting light on corruption in Nigeria, the business practices which may exist at the sharp end of the offshore industry in corrupt jurisdictions, and the challenges of hiding malfeasance in an era when every employees is sending and receiving hundreds of emails every week.
The case also highlights how companies treat whistle blowers more generally, and illustrates some specific problems which Bourbon experienced after its chairman and large shareholder Jacques de Chateauvieux put the company on a path of turbocharged growth between 2004 and 2014, growing a small operator of crew boats to become the largest owner of OSVs in the world.
"The company has strongly denied the allegations"
After he was hired by Bourbon, Mr Cherqui says he immediately discovered what La Croix has described as, "unspeakable disorder and fraud in all areas". "It was not about incompetence," the newspaper reported him as saying but, "an organised system to pay the least tax possible in France and abroad." He says that he notified his managers about the tax problems by email. He went on to describe a process of how he says Bourbon set about reducing the tax assessments through discussion with local intermediaries in West Africa, in exchange for what he described as "African gifts".
The company has strongly denied the allegations, and denies any wrongdoing in the case. "There is no money out of Bourbon or any of its subsidiaries. The investigation has never identified the agents who would have received this money, and where it would come from," stated Ludovic Malgrain, one of Bourbon's lawyers.
"There must have been failures in the management control of Mr Cherqui," said the lawyer, but he claims Mr Cherqui acted "for his own account". As a defence this seems to somewhat implausible – that an employee would be travelling to and from Nigeria with suitcases of money to bribe tax officials for the company's tax audits, but in a private capacity although in company time.
Unfortunately, no sooner had the case opened in court in Marseille, than it was suspended and postponed due to a procedural violation. Defence lawyers claimed that they had only received a 176-page report from the investigative judge two days ahead of the legal deadline, not thirty days, which meant that the defendants could not submit final comments. So, the president of the court referred the case back to the public prosecutor's office, so that it could be "regularised," rather than continuing with the trial.
In front of the journalists and public present in court at the end of March, Mr Cherqui re-iterated that he had acted on the orders of his superiors. "I was not a negotiator" he claimed. "Bourbon humiliated me, it sullied my name, and made me a scapegoat".
Once the trial re-opens, more evidence will emerge and hopefully a verdict will be given. Several key points, emerge, however. Firstly, that this case covers only events in 2011 and 2012. What may or may not have happened in other years and other jurisdictions is not covered by the trial in Marseille. Secondly, the wheels of French justice have ground incredibly slowly, with over six years elapsing between the discovery of the lost bag and its incriminating contents, and the start of the trial of the company and its eight employees in March 2019. Justice delayed is justice denied.
Finally, despite the action in France, it takes two to tango, and no cases have opened in other countries of the recipients of the alleged bribes. As we noted in our coverage of Nigeria, every bribe has a giver and a receiver. The Bourbon case shines a harsh light on the those alleged to have paid the wads of cash, but nothing has yet emerged to uncover in the public domain who may have been receiving the payments. Where are they now and what did they do with the loot?