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Call For Info On Corrupt U.S. Bomb-Detector Deal

Call For Info On Corrupt U.S. Bomb-Detector Deal


by Richard S. Ehrlich


A CTX 9000 DSi machine

BANGKOK, Thailand -- Thailand wants Washington to confirm no Thai government officials received bribes in an attempt to sell American bomb-detectors to Bangkok's international airport, after the U.S. Department of Justice, and the Securities and Exchange Commission, ruled the multi-million dollar deal violated "foreign corrupt practices".

California-based General Electric and the Thai government hope to renegotiate the stalled contract, and silence scandalous allegations voiced by Thai officials, opposition politicians, Bangkok's media and others who have been probing the murky deal during the past three weeks.

"We want a formal letter of confirmation [from the U.S. Justice Department] on whether or not there has been an act of corruption," government spokesman Chalermdej Jombunud said in remarks published on Wednesday (May 18).

"It is our duty to get information from the original source, which is the U.S. Justice Department," said Deputy Prime Minister Vishanu Kruangam.

"Basically, we just want to ask them, 'Now that you have investigated, please tell us what you discovered'," Mr. Vishanu said.

Thai Prime Minister Thaksin Shinawatra earlier expressed confidence no Thai government official received bribes in the original deal.

The American Embassy in Bangkok, meanwhile, suggested a possible renegotiation, General Electric said.

"The U.S. Embassy counseled us to continue with a direct sale of the CTX 9000 machines to the NBIA [New Bangkok International Airport], or another Thai government entity," wrote Louis Porter, a General Electric C.E.O., in a lengthy, defensive letter dated May 12 which was addressed to Prime Minister Thaksin and splashed in full in the Nation newspaper on Wednesday (May 18).

Critics, however, suspect a new deal would include a massive cover-up, and are demanding Washington name names.

Thailand, China and the Philippines were identified by the U.S. Department of Justice, and the Securities and Exchange Commission, in "corrupt" deals with InVision Technologies, incorporated in Delaware and headquartered in Newark, California.

In December, General Electric Co. paid 900 million U.S. dollars to acquire InVision, and the corporation is now called GE InVision, Inc.

On Dec. 6, the U.S. Justice Department's Fraud Section announced InVision's deals in Thailand, China and the Philippines included "criminal liability associated with potential violations of the Foreign Corrupt Practices Act (FCPA)" during 2003 and 2004, 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.

In the Thai deal, InVision tried to sell 26 high-tech X-ray scanners capable of finding explosives in luggage on conveyor belts, for Bangkok's new Suvarnabhumi International Airport which is currently under construction.

The CTX 9000 DSi machine's tunnel-shaped chamber can also pinpoint narcotics and currency, the company said.

"Construction of the airport is overseen by a corporation controlled by the government of Thailand. InVision retained a distributor in Thailand to lobby the airport corporation, and the Thai government, on InVision's behalf," the S.E.C. said on Feb. 14 in an Accounting and Auditing Enforcement document.

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

"Despite this awareness, InVision authorized the distributor to continue to pursue the transaction," the S.E.C. said.

The sleazy sale was almost successful.

"In or about April 2004, the airport corporation, through its general contractor, agreed to purchase 26 of InVision's explosive detection machines from the InVision distributor, in a sale InVision valued at approximately 35.8 million dollars," the S.E.C. said.

The deal was stopped, but "by proceeding with the transactions, InVision made, or authorized the making of, illegal payments to foreign officials," the S.E.C. said.

"I guarantee that there is no bribery involved," Worapoj Yasadatt, head of Bangkok-based Patriot Business Consultants Co. Ltd., told reporters. Patriot is a Thai distributor at the heart of the deal.

But the S.E.C. said, "InVision improperly accounted for certain payments to its agents and distributors in its books and records, in violation of the FCPA."

That indicates InVision illegally sent cash to Thailand, but gives no clue as to who ultimately pocketed the money -- and whether or not it was passed to any Thai government officials.

"The investigations by the [U.S. Justice] Department and the S.E.C. 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.

In China and the Philippines, the evidence was more damning.

InVision illegally paid 95,000 U.S. dollars to its Chinese distributor, knowing the money would most likely "pay for foreign travel and other benefits for airport officials," to clinch a deal to sell two bomb-detection machines to a government-owned airport in Guangzhou, China, the S.E.C. said.

"InVision improperly recorded the [Chinese] payment in its books as a cost of goods sold," and made a profit of about 589,000 U.S. dollars from the two machines.

In the Philippines, InVision also sold two bomb-detection machines to an airport.

InVision illegally paid about 108,000 U.S. dollars in "a commission," despite the likely possibility "that the sales agent intended to use part of the commission to make gifts, or pay cash, to influence Filipino government officials to purchase [more] InVision products," the S.E.C. said.

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

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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