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US Co. Involved In Thai Security Bribery Case

US Company Involved In Thai Airport Security Bribery Case


by Richard S. Ehrlich

BANGKOK, Thailand -- Investigations by the U.S. Department of Justice and Securities and Exchange Commission into "foreign corrupt practices" by an American company selling airport bomb-detectors, and the alleged involvement of Thai officials, have created an uproar in Thailand.

The U.S. bomb-detection deal for Bangkok's new international airport may have provided Thais with more than 10 million U.S. dollars in bribes, kickbacks or inflated contracts.

The case involves InVision Technologies, incorporated in Delaware and headquartered in Newark, California.

InVision wanted to sell 26 high-tech machines which identify explosives when luggage is put onto an airport's conveyor belt.


A CTX 9000 DSi machine

The CTX 9000 DSi machine uses technology derived from medical tomography, in which X-rays scan bags in a tunnel-shaped chamber.

It can also detect narcotics and currency, the company said.

In December, U.S.-based General Electric Co. paid 900 million U.S. dollars to acquire InVision.

But on Dec. 6, the U.S. Justice Department's Fraud Section announced InVision's deal in Thailand included "criminal liability associated with potential violations of the Foreign Corrupt Practices Act (FCPA)" and fined InVision 800,000 U.S. dollars.

In February, the Securities and Exchange Commission fined InVision an additional 1.1 million U.S. dollars "for violations" of the FCPA.

"InVision was aware of a high probability that its foreign sales agents, or distributors, made or offered to make improper payments to foreign government officials in order to obtain or retain business for InVision," the S.E.C said.

After the merger, the company changed its name to GE InVision, Inc. but expects to complete the sale of the 26 explosives-detection machines to Bangkok's Suvarnabhumi International Airport, which is under construction to replace the Thai capital's smaller Don Muang International Airport.

A Thai distributor, Patriot Business Consultants Co. Ltd., appeared to be at the center of the initial deal between InVision and the new airport, but Thai officials said Patriot would no longer be involved due to the allegations.

Thai officials spent much of Thursday and Wednesday (April 28 and 27) trying to assure reporters that they were innocent of all allegations, after Thai media splashed details of the case.

"GE wants to cancel the [Patriot] contract and sell the machines directly to the [airport]. That would be a colossal loss for me," said Patriot's owner, Worapoj Yasadatt.

"But I guarantee that there is no bribery involved," Mr. Worapoj said.

"We are seeking information from both local and foreign agencies, so we can know where to begin," said Deputy Prime Minister Vishanu Kruangam, who promised to examine the case.

On Feb. 14, the U.S. Securities and Exchange Commission issued an Accounting and Auditing Enforcement document which identified Thais allegedly involved in the corruption as a "distributor," "government officials," and "governmental aviation authorities."

"The [Thai] distributor indicated that it had offered to make gifts or payments to officials with influence over the airport corporation" in Bangkok, the S.E.C. said.

"Construction of the airport is overseen by a corporation controlled by the government of Thailand," it said.

In the first quarter of 2004, the airport's corporation agreed to buy 26 InVision bomb-detection units for a total of 35.8 million U.S. dollars, it said.

"Under the terms of the transaction, the [Thai] distributor would purchase the explosives detection machines from InVision, and then make its profit by reselling them at a higher price for use by the airport," the S.E.C. said.

Patriot allegedly quoted the price at 46 million U.S. dollars -- 10.2 million U.S. dollars more than InVision's price -- according to Thai media.

"The investigations by the [U.S. Justice] Department and the S.E.C. [Securities and Exchange Commission] revealed that InVision, through the conduct of certain employees, was aware of a high probability that its agents or distributors in the Kingdom of Thailand, the People's Republic of China and the Philippines had paid, or offered to pay, money to foreign officials or political parties in connection with transactions, or proposed transactions, for the sale by InVision of its airport security screening machines," the U.S. Justice Department announced on Dec. 6.

*************

Richard S. Ehrlich, a freelance journalist who has reported news from Asia for the past 26 years, is co-author of the non-fiction book, "HELLO MY BIG BIG HONEY!" -- Love Letters to Bangkok Bar Girls and Their Revealing Interviews. His web page is www.geocities.com/glossograph/

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