One of Norway’s biggest companies, Yara International, may finally be able to heave a sigh of relief, after the last major appeals court action involving corruption at the fertilizer producer played out this week. It resulted in a lengthy prison term for Yara’s former chief legal counsel, the only one of the company’s former top executives to actually be convicted.
Kendrik Wallace, now age 71, is an American citizen who was sentenced by the appeals court in Oslo to seven years in a Norwegian prison. The jail term is believed to be the harshest ever handed down in a Norwegian white-collar crime case, and much longer than the two-and-a-half-year term decided by a lower court.
Wallace’s former colleagues in top management at Yara were all either dismissed from the corruption case or acquitted by the appeals court. They include Yara’s former chief executive and, before that, Norsk Hydro veteran Thorleif Enger. He’d been convicted and sentenced to three years by the Oslo City Court, but that was overturned on appeal for lack of evidence. Wallace’s two other colleagues, Daniel Clauw of France and Tor Holba of Norway, had each been sentenced to two years in prison by the lower court but were also acquitted on appeal.
The lengthy corruption case, which began with investigations launched by newspaper Dagens Næringsliv (DN) in 2011, involved bribes totalling more than NOK 70 million that were paid in order to do business in Libya and India. Yara itself admitted to corruption in January 2014 and agreed to pay fines amounting to NOK 295 million. By that time, all four management defendants had left the company, and were then charged, indicted and put on trial as private persons.
The appeals court noted there was nothing to indicate it was Wallace who took the initiative to enter into agreements regarding payment of bribes, and that the initiative “came from others in the organization.” Evidence presented in the case, however, failed to answer who those “others” were, according to the court ruling. Wallace, meanwhile, was held responsible for carrying out the “well-planned” bribery payments, with the court noting that there also were “active attempts” to keep the payments hidden by entering into consulting contracts with the sons of highly placed authorities in Libya and India.
The court also noted that Wallace had been in charge of Yara’s anti-corruption efforts and “could have refused to contribute to criminal activity, without risk of consequences to himself.” Wallace had earlier referred to himself as “a good soldier but I wasn’t the boss,” in a taped phone conversation played in court. “It wasn’t my project.”
His sentence was in line with what state prosecutors had sought. “This case is perhaps the most serious corruption case handled by courts in Norway, given the amount of the bribes, because it was carried out by a member of a company’s top management and because it involved bribery of highly placed authorities in Libya and India,” commented lead prosecutor Marianne Djupesland in a press release.
Djupesland said it was correct of the appeals court to sharpen Wallace’s sentence, because it involved two cases of serious corruption that could have resulted in prison terms of up to 10 years. She also said she hoped it would send a strong message to other business executives and discourage them from paying bribes in countries where corruption is common.
More court action may loom, pending any further appeals or legal claims for compensation from Yara executives who were acquitted. Tor Holba, for example, has contended all along that he alerted Yara’s top management to the corruption and complained mightily that he paid a high price for being a whistle-blower. Yara, meanwhile, is now under new management and trying to put the corruption case behind it.