The News, Dec. 17, 2013
Walters Power International Limited (WPIL) and Pakistan Power Resources (PPR), two foreign power companies hit by last year’s Supreme Court verdict in the Rental Power Projects (RPPs) case, have been cleared of any misconduct by the U.S. Department of Justice.
The U.S. Department of Justice initiated an inquiry against both American equity companies under the U.S. Foreign Corrupt Practices Acts after a complaint was lodged by Transparency International Pakistan (TIP), which works with the United States Agency for International Development (USAID) against corruption.
The TIP complaint was made after the Supreme Court, on March 30, 2012, declared all RPPs void ab initio and ordered the National Accountability Bureau (NAB) to conduct investigations into allegations of corruption and misuse of power. WPIL and PPR are among the few RPPs which have settled matters with NAB under the provisions of the National Accountability Ordinance, 1999. However, NAB action against public officials, including former prime minister Raja Pervaiz Ashraf who implemented the RPP policy is ongoing.
Following TIP’s complaint, the U.S. Department of Justice launched a lengthy inquiry against WPIL and PPR. On Oct 31, 2012, it informed WPIL and PPR’s lawyers in the U.S. that the inquiry was being closed as no evidence of wrongdoing could be found against the companies. This clearance letter, a copy of which is available with The News, said:
“Over the past several months, your client, Walters Power International Ltd., has responded to a number of inquires by the Department of Justice, Criminal Division, Fraud Section, into possible violations of the Foreign Corrupt Practices Act. You have also responded to inquiries on behalf of Pakistan Power Resources, LLC, and Walters Power International, LLC.
“As you are aware, the Supreme Court of Pakistan issued an order on March 30, 2012, that declared the country’s rental power plant contracts void ab initio. Our review of that order and related pleadings has revealed no allegations of bribery in connection with those contracts. In addition, on July 24, 2012, Pakistan’s National Accountability Bureau closed its case regarding Walters Power noting that “there remains no basis for further proceedings about the Company.” Finally, Transparency International Pakistan, which publicly referred this matter to the U.S. Department of Justice, has provided no evidence of bribery in connection with the RPP contracts in response to our request for further information.
“Based upon our investigation and the information that has been made available to us to date, we presently do not intend to take any enforcement action and are closing our inquiry into this matter. If, however, additional information or evidence should be made available to us in the future, we may reopen our inquiry.”
Interestingly, WPIL and PPR sat on this letter issued by the U.S. Department of Justice for over a year. When asked why this letter had not been made public for so long, a spokesman for WPIL said: “We cooperated unreservedly with the impartial and unimpeachable investigation of the U.S. Department of Justice and are satisfied with the results. The findings of the U.S. Department of Justice were shared with all shareholders and financial institutions but not made public for fear that this might be misconstrued as a rebuke by the now former chief justice of Pakistan.” He added that the Washington inquiry found no evidence of wrongdoing on the part of either company, contrary to popular misconceptions within Pakistan.
The spokesman said WPIL and PPR are hoping to work with the Nawaz Sharif government to secure the release of their power plants and machinery. “We have about $100 million in infrastructure on the ground in Pakistan that is rotting away because of bureaucratic obstacles,” he said. When asked if WPIL and PPR had contacted Water and Power Minister Khawaja Asif, who was the petitioner at the Supreme Court against RPPs, the spokesman replied in the negative. “We have forgone our legal right to seek remedies through international arbitration, unlike Turkey’s Karkey, and trust that the Sharif government will do the right thing here.”
WPIL set up RPPs in Naudero, Sindh, and PPR installed a 136MW RPP at Bhikhi.
See the original story here.