The US criminal indictment against the bribe paying Ahsani brothers, Cyrus and Saman — who ran Unaoil and who have now pleaded guilty and become FBI informants — also spells grave trouble for former Leighton executive and top Australian businessman Russell Waugh.
The indictment doesn’t name Mr Waugh, describing him only as an “executive”, but makes clear the FBI believe he participated in a scheme involving Leighton and Unaoil that involved the payment of kickbacks to high ranking Iraqi officials.
The US investigation only began after reporters from The Age and The Sydney Morning Herald exposed Unaoil and Leighton Holdings’ corruption in a series of stories in 2016.
The unsealed indictment reveals that Unaoil executive Peter Willimont travelled to Perth in late May 2010 and met with Mr Waugh at the Sheraton. During this meeting, the pair along with other attendees “agreed to rig the bidding process for projects in Iraq”, the documents say.
At the time, Leighton Holdings was trying to win a billion-dollar oil pipeline project in Iraq as part of the Australian company’s international expansion plans under the leadership of chief executive Wal King. Mr King remained CEO until early 2011, although there is no suggestion in the US court files that he knew of Mr Waugh’s alleged decision to funnel millions of dollars in company funds to high ranking Iraq officials.
The 2019 indictment reveals that in May 2010, Mr Waugh and unnamed others within Leighton “agreed to pay appropriately $8.25 million … portions of which they understood would be paid as bribes to Iraq official 2, Iraq official 3 and Iraq official 4 in order to guarantee that the Iraqi government would approve Company 8 [Leighton Holdings] … bids in a timely manner”.
The indictment describes “company 8” only as a listed Australian company but it is clear it is Leighton. The indictment states that “certain executives at Company 8 ensured” there were “sufficient funds to make bribe payments to Iraqi government officials”.
In 2016, The Age and Herald uncovered leaked emails in which Mr Waugh and Unaoil arranged the Sheraton meeting and then discussed how to corrupt the Iraq bid. It was the discovery of these emails that led to the FBI launching its international probe into Unaoil.
In one email, Unaoil discusses how “Russell is considering our offer of support … they have a plan to win and are hungry and can do the job”.
After the meeting at the Sheraton, Unaoil’s Mr Willimont wrote to Mr Waugh: “Russell, may I take this opportunity to thank you for making time to see me last Thursday. We to our knowledge are one of the few groups to contract with [the Iraq government] and understand all the approval routes and payment idiosyncrasies of this territory.”
The sheer scale and extraordinary brazenness of Unaoil’s criminal offending is laid bare in the unsealed indictment. The US government has accused Unaoil of paying bribes on behalf of up to 25 multinational firms over more than a decade.
The Ahsani brothers acted like mafia bosses in suits, issuing legal threats and claims of innocence while shredding files that exposed their corruption. In March and April 2016, as Unaoil was instructing its Australian lawyer Rebekah Giles to threaten The Age and the Herald with lawsuits and to brief reporters from other media outlets on the Ahsanis’ innocence and the unfairness of the investigative journalism that had exposed their corruption, the Ahsanis were actively destroying evidence.
Along with bribery and money laundering, Unaoil executives Cyrus and Saman Ahsani have pleaded guilty to having “destroyed incriminating documents with the intent to prevent their discovery by law enforcement” after the newspapers “began reporting the Ahsanis had participated in a long running bribery scheme”. The Ahsanis are awaiting sentencing.
The AFP began its investigation into Leighton in February 2012. It is still running.
Nick McKenzie is an investigative reporter for The Age. He’s won seven Walkley awards and covers politics, business, foreign affairs and defence, human rights issues, the criminal justice system and social affairs.
Richard Baker is a multi-award winning investigative reporter for The Age.