Written by Brian Hutchinson
Posted to the National Post, Jan 28, 2013 2:05 AM ET | Last Updated: Jan 28, 2013 11:10 AM ET
For the original article and related links click HERE
There was nothing subtle about Brad Griffiths, the legendary investment banker who died 18 months ago. He offended people and he drank too much. “He had demons, but he was the smartest guy on Bay Street,” says a former associate in Toronto. “Everyone wanted him for his brain.”
Mr. Griffiths tumbled out of a boat near his Muskoka cottage and drowned, just as a new management team was taking charge of a private oil and gas company he had built. It made discoveries that led to a corruption charge against the company, a guilty plea, and a record $10.3-million fine imposed in a Calgary courtroom Friday.
An Alberta Court of Queen’s Bench justice heard how Griffiths Energy International Inc. (GEI) acquired oil and gas properties in Chad, by directing US$2-million to the wife of that country’s ambassador to the United States and Canada.
The National Post has learned that before sending the bribe, GEI enlisted former Canadian prime minister Jean Chrétien to help advance its interests in Chad.
Mr. Chrétien is counsel for Heenan Blaikie, one of Canada’s largest and most prestigious law firms. He sometimes meets with foreign officials to promote companies that his firm represents. Heenan Blaikie has in recent years been focused on mining ventures in Africa.
Neither Mr. Chrétien nor anyone else at Heenan Blaikie has been accused with participating in the crime, which began Aug. 30, 2009 and ended with the illicit $2-million payment on Feb. 8, 2011. Neither Mr. Chrétien nor Heenan Blaikie is named in the court case’s agreed statement of facts. Rather, they are identified as a “high-level” official and a “Canadian law firm,” respectively.
Crown prosecutor Robert Sigurdson acknowledged in an interview that Heenan Blaikie was the firm GEI initially engaged to advance its interests in Chad.
And a former Heenan Blaikie senior partner confirmed to the National Post that he and Mr. Chrétien travelled with Mr. Griffiths to Washington, D.C., where they met with the Chadian ambassador, Mahamoud Adam Bechir, and Chad’s president, Idriss Deby. Chad’s oil minister also attended the meeting, set up to finalize negotiations for the oil and gas properties coveted by Mr. Griffiths.
“My firm was retained by Griffiths Energy, yes,” said Jacques Bouchard, Heenan Blaikie’s former director of international development, in an interview conducted before he resigned from the firm in late 2011. “We worked on a number of files for Mr. Griffiths, including Chad. … I think [the Washington meeting] was around the [September 2009] UN General Assembly and that’s when we meet many heads of state. … I mean, we do meet with our clients and with officials from other countries, and we try to promote relations between Canadian companies and African countries and other developing countries.”
A few weeks prior to the meeting, GEI signed a sketchy consulting agreement with Mr. Bechir. According to the statement of facts, the agreement called on GEI to pay US$2-million to a company owned by the ambassador, on condition that GEI receive title to the oil and gas properties it wanted in Chad.
But in early September 2009, GEI’s “outside legal counsel” advised a GEI director named Naeem Tyab that “the ambassador was a government official and that GEI could not make an offer or give an advantage or do anything directly or indirectly with him,” reads the statement of facts.
The agreement was terminated, but a second consulting contract with nearly identical terms was signed on Sept. 15, 2009. This deal involved GEI and a company registered five days earlier in Nevada. It was owned by the ambassador’s wife, Nouracham Niam.
It was Ms. Niam who scheduled the Washington meeting, held Sept. 24 and attended by Mssrs. Chrétien, Bouchard and Griffiths, plus the Chadian officials, including President Deby.
“The purpose of the meeting was to sign a memorandum of understanding in relation to the Doseo and Borogop [oil and gas] blocks,” reads the statement of facts. For reasons left unexplained, another month passed before the memorandum of understanding was actually signed.
After the Washington meeting, Mr. Chrétien and Mr. Bouchard travelled to New York, where Canada’s former prime minister had a private meeting with Zimbabwean strongman Robert Mugabe. The “courtesy call” was noted by the Zimbabwean press. Mr. Chrétien did not respond to an interview request this week.
Mr. Griffiths and his founding partners at GEI — Naeem Tyab and his brother, Parvez — spent the next year trying to finalize their deal in Chad. In December 2010, Mr. Griffiths doubled the amount of a formal “signature bonus” to be paid to the Chadian government, from US$20-million to US$40-million. This payment was transparent and did not constitute a bribe.
Early the following month, GEI signed a production sharing contract with Chad, and it hired new outside legal counsel, Calgary-based law firm Macleod Dixon. An updated consulting agreement was made with Ms. Niam, the ambassador’s wife, with terms similar to those in the 2009 contract.
In February 2011, GEI’s new counsel received from the company US$2-million. The money was then forwarded to a Washington, D.C., bank account controlled by Ms. Niam. The criminal act that began in August 2009 was complete. Brad Griffiths had his oil and gas properties in Chad, and the ambassador’s wife had US$2-million.
The intrigue might have ended there, had Mr. Griffiths not been determined to make GEI into something more than an obscure oil and gas company with plays in distant Chad. An entirely new management team with real oil and gas experience was recruited in Calgary, with an eye to taking GEI public on the Toronto Stock Exchange.
The Tyab brothers were pushed out in early July 2011; Mr. Griffiths remained GEI chairman. But on July 18, he died while boating alone on Lake Joseph, some 200 kilometres north of Toronto. Mr. Griffiths fell into deep water. His body was recovered five days later. He was 55.
Over the next few months, GEI’s new management team and directors “were made aware” of the company’s alleged bribe, according to the statement of facts. An internal investigation was launched; GEI’s proposed initial public offering was indefinitely postponed. GEI disclosed details of its internal investigation to Canada’s Public Prosecution Service and to U.S. “law enforcement authorities” in November 2011. The RCMP was also made aware. None of the details were made public until much later.
Early the next month, GIC’s most prominent board member resigned. Ned Goodman is chairman of Toronto-based investment bank Dundee Capital Markets Inc., and is one of Canada’s wealthiest businessmen. He left GEI’s board after only three months of service; The company did not announce his departure. Gary Guidry, GEI’s new president and CEO, eventually allowed that Mr. Goodman had resigned from the board “in order to avoid any conflict with his ongoing role as a manager of funds with a significant equity position in Griffiths Energy.”
The following March, Dundee Capital co-led a $125-million private placement of GEI shares. But the company had still not made public any findings from its internal investigation. Details only emerged two weeks ago, when GEI announced it had been charged under Canada’s Corruption of Foreign Public Officials Act for having paid a bribe to obtain properties in Chad.
In a negotiated settlement with the Crown, the company agreed to a $10.35-million penalty, approved Friday in a Calgary courtroom.
Mr. Griffiths is gone, but the statement of facts leaves open questions about GEI’s US$2-million bribe.
The file isn’t necessarily closed. “I’m not going to get into what I’m doing externally, in terms of the file,” Mr. Sigurdson says. “But does the U.S. have concurrent interest in the file and concurrent jurisdiction? Yeah. Part of the facts occured in the U.S.” He refused to say if a charge against Mr. Tyab has ever been considered. “He’s not charged right now,” he says.
As for the company’s outside counsel, “Factually, they paid the money that constituted the bribe,” says Mr. Sigurdson, referring to the agreed statement of facts entered in court. “Whether they knew that is a different issue. You get a bill, you pay it.”
Macleod Dixon has since merged with Norton Rose Group, whose global chairman told The Globe and Mail on Saturday that its lawyers were not aware the payment was meant for foreign officials.
Then there’s Ms. Niam, wife of the ambassador from Chad. She was in Washington last week and answered a telephone call from the National Post. “What’s this about?” she asked. Once informed, she hung up.
National Post, with files from Jen Gerson