Stanleytown pump supplier implicated in international fraud

Stanleytown pump supplier implicated in international fraud
September 4, 2009 | By KNews | Filed Under News
http://www.kaieteurnewsonline.com/2009/09/04/stanleytown-pump-supplier-implicated-in-international-fraud/

The following is an article which was published in the March 15, 2002 edition of the St. Petersburg Times, written by Adam C. Smith, Political Editor.

The Justice Department says a water pump company fraudulently helped Nigeria obtain $74-million in taxpayer-backed loans.

Gov. Jeb Bush’s former business partner in a venture to sell water pumps abroad defrauded the U.S. government of more than $74-million, federal authorities contend in a lawsuit.
The Justice Department alleges that MWI Corp. of Deerfield Beach, a water pump company whose equipment Bush marketed to foreign countries, fraudulently helped Nigeria obtain U.S. taxpayer-backed loans during his father’s administration.
Much of the loan money went for secret payoffs to Nigerian officials and equipment that was vastly overpriced and unneeded, the lawsuit says.
The company denies the allegations, many of which surfaced four years ago when a former MWI employee sued the company.
Bush, campaigning for governor at the time, shrugged off questions about the deal as little more than complaints from a disgruntled former staffer.
Now the Justice Department is making many of the same charges.
The pump deals occurred years before Bush became governor, and the lawsuit neither mentions him by name nor accuses him of wrongdoing.
But it suggests MWI used its political influence in the Republican Party to win the U.S. loans, and notes that MWI president J. David Eller went into business with “a member of a prominent national political family in an attempt to bolster MWI’s sales abroad.”
That’s a reference to Jeb Bush.
In 1989, Eller, a major Republican contributor, formed a company with Bush, Bush-El, to market MWI’s industrial water pumps abroad. Bush has described Eller as a “person of integrity.”
Twice while his father was in the White House, Bush visited Nigeria as a water pump representative. He visited Nigerian dignitaries and was showered with attention, including a parade for him in 1989 with 1,300 horses.
Jeb Bush sold his share in Bush-El in 1994, and has said he earned about $648,000 from the company.
He has insisted that he received no money on the Nigerian deals, saying he took no commissions on sales backed by U.S. loans to avoid a potential conflict of interest. He said his earnings came from his work in other countries, including Mexico, Indonesia and Malaysia, but in 1998 declined to detail that work.
“You either trust me or you don’t,” he told the Miami Herald in 1998.
Katie Baur, spokeswoman for the governor, said the governor was unaware of the lawsuit and had not spoken to federal authorities about the case.
“The governor had nothing to do with the … loans that are the subject of this,” Baur said.
The federal lawsuit accuses MWI of guiding the buyer and the Export-Import Bank of the United States into a deal loaded with falsehoods. It went like this, the suit said:
MWI found a well-connected Nigerian agent. By paying various Nigerian authorities in currency and goods, the agent convinced assorted Nigerian officials that they “needed” MWI’s pumps. Then MWI helped Nigeria get U.S. loans for projects with vastly inflated prices. Much of the hidden markups went for illegal payments to Nigerian officials, for huge commissions for MWI’s Nigerian agent, and for equipment overpriced as much as 500 percent.
Nigerian authorities would not have sought the loans for the pumps had they not received generous payments courtesy of MWI, the lawsuit contends.
Nigeria lacks the infrastructure and need for much of the equipment, and today, hundreds of pieces of equipment sold by MWI sit rusting and unused in Nigerian fields, the lawsuit says.
“That’s nonsense,” said MWI attorney William Scherer.
Scherer said that Nigeria continues to buy products from MWI and that the country has paid back the $74-million loaned by the Export-Import Bank, plus some $33-million interest.
“We have done nothing wrong, and the country paid back the money with interest,” Scherer said.
Officials with the Export-Import Bank could not be reached for comment Thursday, but weeks ago confirmed to the St. Petersburg Times that the loans had been paid off.
The Nigerian pump deals became a campaign issue in 1998, after former MWI vice president Robert Purcell (From page 12)
named Bush in a lawsuit against MWI and others. Purcell said he was cheated out of more than $1-million in profits that were diverted to Bush-El and other companies affiliated with Eller. The company denied the allegations, and Purcell’s lawsuit was settled under confidential terms.
Federal court records show that in August 1998 Purcell also filed a federal “whistleblower” lawsuit against MWI, accusing it of defrauding the federal government. That lawsuit remained sealed until recently while federal authorities investigated the charges.
At one point, FBI investigators in the Clinton administration were pursuing a criminal investigation into MWI, but Scherer said that apparently ended because the statute of limitations for criminal prosecution expired.
Still, the investigation continued into the George W. Bush administration.
In January, the U.S. Justice Department decided to intervene in the civil case on Purcell’s behalf. Under the whistleblower law, Purcell could receive from 15 percent to 25 percent of anything the government recovers.
Federal authorities involved in the case could not be reached for comment Thursday, but Scherer insisted that the loan was paid off and that the government has no lost money to recover.
“We’re going to vigorously (fight) the case, and we’re going to be completely exonerated if it doesn’t go away,” Scherer said. (Times staff writer Bill Adair contributed to this report.)
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Interesting reading indeed! Since the publication of this article seven years ago, it seems as though precious little has changed. The company is still cagey about phone calls. Yesterday, a call to enquire of an individual named Sutha Selve, the man who deals with the Guyana market, was greeted by an enquiry about the source of the call. This was then followed by a series of recordings, including one that stated that even the operator was unavailable.
A recorded message for Mr Selve to return a call has not yet been honoured.
The first sourcing of the item was to the company and Selve had queried where the caller was calling from, on whose behalf the call was being made, and was the business conducted here.
The publisher of this newspaper Glenn Lall when he contacted the company was told that he must send an email with his company’s letterhead indicating who he is and what business he conducts. He (Selve) questioned Lall whether there were any other tenders out for bidding as it relates to the water pumps.
Lall responded in the affirmative and was asked to send a copy of the tender document along with the letterhead and information that he had requested.
Selve then blurted out that he hoped that it was not a newspaper calling.
“Some newspapers have been calling with questions about pump and engines.”
He added that he had “no f*#king time with any newspaper”.
“If the newspaper and their government got problems let them work it out.”
The modus operandi also explains Harrychand Tulsi’s bold challenge. “I hereby challenge the Kaieteur News to obtain a detailed quotation from this company for the pump, engine and gear drive and publish it in all the newspapers,” Mr Tulsi wrote yesterday in the Stabroek News.