United States (US) investigators have flagged a consultancy agreement between Turkish Energy Company, AKSA Enerji and a Ghanaian consulting firm in which the former agreed to pay a whopping amount of $42 million to the latter.
This was disclosed during a trial where a former Goldman Sachs Group Inc. banker, Kwaku Asante Berko, was convicted, among others, for paying bribes to National Democratic Congress (NDC) government officials to secure power deals in Ghana between 2014 and 2015 during President John Dramani Mahama’s first term in office.
The SEC claimed that Berko facilitated up to $4.5 million in bribe payments on behalf of the Turkish energy company to win the contract.
During the period, the US investigators uncovered that ‘Ghana Consulting Company 1’ was incorporated under the laws of Ghana with someone related to President Mahama, described as a “Presidential Relative,” as a Director, to “purportedly provide services in the Ghanaian energy and gas sector.
Consequently, the co-conspirators in the alleged bribery scandal used Ghana Consulting Company 1 to collect funds from the Turkish Energy Company for bribes to Ghanaian officials and for payments to themselves.
It was also revealed by the US investigators that the $42 million was the total amount the AKSA enerji will pay to ‘Ghana Consulting Company 1’ for the initial duration of the Emergency Power Agreement (EPA) between the Turkish Energy company and the Government of Ghana. .
The U.S. case presented what investigators considered a cumulative pattern; unusually large fees, payments tied to milestones involving the Government of Ghana, communications with officials, transfers through consulting-company accounts and alleged inconsistencies between the actual consultancy arrangement and explanations given to a U.S. financial institution.
From $10m yearly fee to $42m contract
Court documents revealed that discussions over the consultancy began in April 2015, when Berko and other individuals identified as co-conspirators circulated drafts of an agreement between the Turkish energy company and Ghana Consulting Company 1.
The initial proposal contemplated a variable annual fee based on the Turkish company’s revenues under the Emergency Power Agreement, with a minimum payment of $10 million a year.
The consultancy was also to be reimbursed for expenses and was described as providing services that included acting as a liaison with the Government of Ghana and state-owned entities during negotiations.
Financial models allegedly supplied to a U.S. financial institution projected payments of about $9.7 million a year to the Ghanaian company.
By late May 2015, the draft agreement had acquired a $5 million payment linked to execution of the EPA.
Later discussions allegedly transformed that amount into milestone payments tied to developments including agreement on the EPA, its signing, finalisation of a letter of credit, and commencement of plant operations.
According to the investigators, the government-linked nature of the milestones was significant.
While success fees are not inherently improper, payments connected to government approvals can attract scrutiny if there is evidence suggesting that money was intended to influence officials.
The negotiations continued through August 2015. After discussions in London, the parties allegedly settled on a contract worth $42 million in milestone and periodic payments, replacing the earlier variable-fee arrangement.
The final agreement was signed on September 29, 2015, shortly after the Government of Ghana and the Turkish energy company had signed the EPA on August 10.
Bankers began questioning the payments
The amount of the consultancy fee apparently attracted attention even before the final agreement was executed.
By June 2015, bankers at the U.S. financial institution were reportedly questioning the Turkish company about payments to Ghana Consulting Company 1 appearing in financial models.
The response, according to the court documents, was that the Ghanaian company was the Turkish company’s “local partner.”
However, the explanation allegedly described its tangible contribution in much narrower terms, including housing, security, permitting advice, and other local services.
This difference became important to investigators, as on one hand was a consultancy arrangement eventually valued at $42 million and involving government liaison and project milestones, and on the other was an explanation to financiers portraying the consultant’s role as largely routine local support.
Intensified scrutiny
The scrutiny intensified when the U.S. financial institution conducted due diligence on the proposed power project between late 2015 and early 2016.
The institution reportedly reviewed emails associated with Berko’s account and identified communications involving the Ghanaian consultancy, Berko, Ghanaian officials, and employees of the consulting company.
The investigation therefore expanded beyond the written consultancy agreement to examine how the parties communicated and how money moved.
According to the documents presented in court, a $200,000 payment was transferred from an account belonging to the Turkish energy company to an account associated with an employee of the Ghanaian consulting company on February 25, 2016.
A week later, $194,000 was allegedly transferred from that employee’s account to an account associated with Berko.
For investigators, such movements became significant because they appeared to connect project funds, intermediary consultancy accounts and an individual involved in the transaction.
Specific information given
More information was uncovered in May 2016, when compliance officials asked for specific information about the Ghanaian consultancy’s services and role in the project.
U.S. documents noted that the responses described the company as providing “local services,” including visas and car rentals.
The responses allegedly stated that the company had received only about $300,000 for those services and would receive another $200,000 to $300,000 before its engagement ended.
The prosecution case alleged that this account was false and that Berko and another individual knew it was false.
Most significantly, investigators said the responses did not disclose the $42 million consultancy agreement or payments they had characterised as bribes.
That alleged concealment became one of the most important reasons the consultancy was viewed as something more than an ordinary commercial arrangement.
The alleged $700,000 bribery network
The consultancy allegations were also considered alongside a broader U.S. claim that more than $700,000 was paid or arranged for Ghanaian officials and other individuals in connection with the power project.
The proposed transaction required an EPA, about $190 million in project financing and a $75 million letter of credit for Ghana.
The U.S. case alleges that, while the transaction was being pursued, payments were made through Ghanaian consulting companies and other intermediaries.
One allegation concerned five Ghanaian officials who travelled to Turkey to inspect equipment proposed for the project.
According to the court documents, their flights and accommodation were paid, and each allegedly received $5,000. Investigators said the officials subsequently produced a favourable assessment of the equipment.
The case also alleged that $500,000 was transferred to Ghana Consulting Company 2 in April 2015 following an invoice issued by the company. Another $1.5 million was allegedly invoiced in May.
Investigators considered these transactions part of the broader payment mechanism surrounding the project.
The alleged $250,000 payment list
Perhaps the most striking piece of evidence cited by the U.S. case was an alleged August 2015 email requesting $250,000 as reimbursement for payments previously made.
The document allegedly contained descriptions of payments, including amounts attributed to the Public Utilities Regulatory Commission, GRIDCo engineers, Ministry of Power officials, Parliament, travel to Turkey, and an entry described as “Asante personal.”
The alleged list also referred to money discussed for another Ghanaian official and a senior adviser.
According to the allegations, negotiations followed over the reimbursement, with the parties eventually agreeing on $140,000.
On September 4, 2015, $140,000 was allegedly transferred from an account belonging to the Turkish energy company to an account held by an employee of the Ghanaian consultancy.
Six days later, approximately $99,900 was allegedly transferred from that account to another account associated with Berko.
