Former top executives of large Norwegian fertilizer firm Yara are undergoing more tough questioning as their bribery trial continues in an Oslo courtroom this week. Two of them have had to listen to themselves chatting in telephone conversations they didn’t know were being taped by corruption investigators, while one claimed he was “shocked” he’s been charged in the case.
“I’m shocked over traveling back to Norway for a court case,” Daniel Clauw, a French citizen who once served as Yara’s director of operations, said in court on Tuesday. Newspaper Dagens Næringsliv (DN), which has extensively covered the Yara corruption case, quoted Clauw as saying that he thought he should be in Oslo “to receive a medal, because I was the right man at the right time.”
Clauw said he was also “shocked” that Yara itself had accepted prosecutors’ charges that it had engaged in bribery, and agreed to pay Norway’s largest fine ever for corruption. “I was shocked when I was arrested,” Clauw said, adding he was also “shocked” that he must “sit here for three months” as the trial proceeds, and endure having his private life turned upside down.
Clauw and his former colleague Ken Wallace, once the chief legal officer for Yara, were unaware that French and Norwegian police had secured legal permission to tap their telephones after they were released from initial rounds of questioning in Paris. They both have homes in France, which is why French police have been involved in the Norwegian investigation of corruption at Yara and the executives who allegedly carried it out.
Taped phone conversations have been played in court, where Wallace could be heard telling Clauw that he thought investigators were out to “get Thorleif’s scalp,” referring to former Yara chief executive Thorleif Enger. Enger is also under indictment, along with Wallace, Clauw and another former executive colleague, Tor Holba, for paying bribes in what ranks as Norway’s biggest corruption case ever.
DN reported that both Wallace, an American, and Clauw, a French citizen, thought they were merely witnesses in the case, called on to help investigators piece together how Yara was going about its international expansion. Wallace and Enger have admitted making large payments to the sons of high-ranking government officials in Libya and India, where Yara was expanding, but they deny the payments amounted to bribes.
DN, among the first to report in detail on corruption suspicions at Yara several years ago, reported that Wallace could be heard telling Clauw on the phone that someone inside Yara was leaking information “like crazy.” That comment came after DN had published a story about Yara’s own internal investigation into corruption suspicions. Wallace mentioned that Tor (Holba) “had a bit of a problem” and he’d earlier claimed in another phone conversation that Holba had “a lot” to clarify about the payments. He told Clauw that people don’t go to prison for what they did, but for trying to cover it up. Wallace later backed down from directly blaming Holba for organizing the payments, however, citing a lack of memory and documentation.
Holba has defended himself by saying he was the whistleblower in the Yara case, and has pointed the finger at Wallace. It’s already been claimed in court that Holba and Clauw had a poor working relationship. Newspaper Aftenposten reported over the weekend that Clauw has been described as “the brain” behind Yara’s growth strategy and commanded the highest pay in the entire company, even higher than CEO Enger. When he resigned in 2007 to become an external consultant to the company, he received what’s been ranked as the best severance deal in Norwegian history.
Prosecutors believe Clauw played a key role in Yara’s payments to the sons of decision makers in Libya and India. Clauw admitted in court on Tuesday that Wallace had once asked him to handle a payment without it appearing to come directly from Yara. Asked whether he was curious about who would receive the payment, Clauw said “no,” saying he’d been told it was “confidential” for legal reasons. Clauw testified that he had “no reason” to believe Wallace was doing anything illegal. “He’s a lawyer,” Clauw said.
Prosecutor referred to as a ‘blond bitch’
Clauw and Wallace, meanwhile, seemed to have a good tone between themselves as they discussed the case without knowing that French and Norwegian police were listening in. Wallace, who repeatedly referred to Norwegian lead prosecutor Marianne Djupesland as a “blond bitch,” has claimed that Holba knew what was going on with the payments “because it was his project, not mine,” and distanced himself from having any responsibility for initiating the payments that prosecutors describe as bribes. Wallace has made it clear both under police questioning and in the taped phone conversations that he had not acted on his own initiative: “I was a good soldier, but not the commander,” he was quoted as saying.
Holba’s defense attorney Nadia C Hall has denied Holba was “project chief” and says she’ll be able to prove he did not know about the disputed payments.
‘Didn’t want to know’
Wallace also said on the phone that (former CEO Thorleif) Enger “didn’t know very much because he didn’t want to know much.” Wallace told Clauw that he’d told Enger that Yara made no payments directly to the sons of the Libyan and Indian officials (they were made through a business associate in Switzerland), and that there were no written agreements. When investigators asked what Wallace had told Enger about the indirect payments, he answered that Enger “hadn’t asked” so he didn’t say anything.
Wallace had also said that Yara’s negotiating team returned from a trip to Libya with a message from Libya’s oil minister at the time that they’d need to arrange details with his son. “The next step was to contact the son, who worked in an investment bank in Bahrain,” Wallace told police under questioning. The son will also be called to testify. His father, the former Libyan oil minister, died under mysterious circumstances after the Libyan government fell.
The Yara trial resumed after an unexpected pause earlier this month while the court settled some formalities. Prosecutors could thereafter continue to question Wallace and use his earlier statements and the recorded phone conversations as evidence. Clauw’s own testimony will continue, against his will, after what Aftenposten reported were two rounds in Norway’s Council of State (the weekly meeting between government ministers and King Harald), which had to approve his indictment because Clauw didn’t live in Norway when the alleged corruption took place. Clauw’s defense attorney had tried to block his indictment, but failed. Former CEO Enger is scheduled to testify next week.