Money paid by Unaoil to a former agent in Iraq was a “risk premium” for nurturing a confidential relationship with state-owned South Oil Company (SOC), and not funds for making bribes, jurors were told in a corruption trial.

Oday Al-Quoraishi – an SOC project manager overseeing a major crude oil expansion scheme – needed money to minimise his profile in an environment of “fear and paranoia” that gripped the country following Saddam Hussein’s overthrow.

Operating on behalf of Western companies in a region where “enemies abounded” exposed him to “security risks”, which senior officials within SOC agreed would require a cash retainer to “go the extra mile” in carrying out the project.

That was the version of events put forward this week by Ziad Akle, Unaoil’s former territory manager for Iraq who faces criminal charges along with two other former associates of the Monaco-based energy consultancy for conspiracy to make corrupt payments between 2005 and 2011.

Speaking from the witness stand at London’s Southwark Crown Court, Akle said: “In an environment where there were many enemies – who I understood were very prominent people in the [oil] ministry – [Al-Quoraishi] was at risk and would need support.”

In cross-examination by Michael Brompton QC – who is prosecuting the case on behalf the UK Serious Fraud Office (SFO) – the defendant repeatedly dismissed accusations that these “retainer” payments were in fact intended for bribing SOC officials to help Unaoil win manufacturing contacts for its clients.


Unaoil payments to ‘Ivan’ central to SFO corruption trial

The prize on offer, Mr Brompton said, was a slice of $4.5bn made available for the Iraq Crude Oil Export Expansion Project (ICOEEP) – a government-backed scheme to more than double the country’s crude export capacity from 1.8 million barrels per day (bpd) to 4.5 million bpd through infrastructure upgrades in the south of the country.

He alleges Unaoil and its associates exploited Al-Quoriashi’s position as project manager for the ICOEEP, paying him a $6,000 per month commission to exert influence within SOC in favour of Unaoil’s clients – namely Netherlands-based SBM Offshore and Singapore-based Leighton Offshore – in a tender process for new oil and gas infrastructure.

Al-Quoraishi – who became known by the codename “Ivan”, perhaps due to his “appreciation of Russian culture”, according to Akle – is a key figure in the SFO’s case, in which it is argued that Unaoil’s “man in Basra” had been “bought up” to bribe SOC officials to manipulate the tender.

In all, “Ivan” was paid $608,000 by Unaoil for his “services” in Iraq – including two initial $5,000 payments and a one-off lump sum of $400,000 paid in February 2011.


Retainer arrangement was ‘fully legitimate’ and authorised by SOC officials

But Akle, 45, argues that although the arrangement between Unaoil and Al-Quoraishi was kept hidden, it was one that was authorised by SOC’s director general Kiffar Numan, and the payments were legitimate costs for security measures associated with working in Iraq at that time.

He said: “It was agreed at the director general level [of SOC] with my colleague Basil Al Jarah that in order to assist his project manager Al-Quoraishi to do the best job possible in Iraq, he would need support to go the extra mile.

“There were multiple precautions he had to take. It was a risk premium to make sure he did his best the whole time – because in his position it would have been easy to do the least possible.

“This was an unusual arrangement, and a unique situation. But as far as I was concerned, it was fully legitimate.”

Akle explained that, in the years after the US-led invasion, Iraqis seen to be doing business with Western companies faced significant threats of violence, kidnap and even murder – making it necessary for the “mission” between Al-Quoraishi and Unaoil to help SOC secure foreign involvement in ICOEEP to be kept secret.

“It put him in the line of fire – literally and figuratively,” he added. “There were risks to his life and his family’s life.”

According to internal Unaoil emails read out in court, $1,000 of Al-Quoraishi’s monthly retainer was earmarked for “presents to people within”.

Akle denied this meant people within SOC, saying he understood it to be for “ad-hoc” costs associated with navigating the country, such as moving through police checkpoints within southern Iraq.


Cash payments were ‘standard procedure’ in post-war Iraq

Mr Brompton pressed the defendant on the finer details of the arrangement – like why the payments were made in cash, why there was no written agreement between Unaoil and Al-Quoraishi, and why he would be so at risk for being affiliated with Unaoil given the scope of his day job was to routinely deal with foreign companies on behalf of SOC.

Cash payments, Akle suggested, were “standard procedure” in Iraq at that time, with bank accounts exposing people to the threat of kidnap or violence.

“Paying money into a bank account was like painting a red target on your back,” he said today (28 February).

If that was the case, asked the prosecutor, why not just pay the money directly to SOC, Al-Quoraishi’s employer in Iraq which Akle claims had authorised the arrangement with Unaoil.

The reason, suggested Mr Brompton, was that “the director general did not in fact know about it. This was an entirely corrupt arrangement between Unaoil and Al-Quoraishi personally”.


Three men facing charges in SFO corruption case

Akle is facing criminal charges for conspiracy to make corrupt payment alongside two other men – Stephen Whiteley, 65, who was Unaoil’s general territories manager for Iraq, and formerly a vice-president of SBM Offshore; and Paul Bond, 68, who was a senior sales manager for SBM Offshore.

All three men deny the charges brought against them.

The trial continues.