The Victor Dahdaleh trial, the UK’s largest ever bribery case, collapsed after a six year investigation because of the legal failings of the UK’s Serious Fraud Office. But the trial in its initial stages shed light on the opaque realm of state run corporations in Bahrain.
Dahdaleh was accused of paying over $60 million in bribes to the then-Chairman of ALBA (Aluminium Bahrain), Sheikh Isa Bin Ali Al Khalifa, (also a former Minister of Finance) and a member of the Bahraini royal family, and the brother-in-law of Bahrain’s Prime Minister, Khalifa bin Salman Al Khalifa. The trial climaxed a few weeks ago when the former CEO of Alba, Bruce Hall (who pleaded guilty to receiving payments himself) and others gave dramatic evidence of the extent to which corruption was sanctioned by the state, all the way up to the Prime Minister of Bahrain himself. Bruce Hall, “agreed with the description of tensions in Bahrain, where “the royal family is all-powerful” and where “nothing of significance happened in Bahrain without the approval of the prime minister” reports the Financial Times.
The Prime Minister of Bahrain is notorious for his involvement in corrupt practises during his reign. In 2011, Reuters exposed serious high-level corruption networks that included land transfers to the Prime Minister for one Bahraini dinar, or less than $3.
Dahdaleh’s defense lawyer argued that the payments made by his client were part of Bahraini “custom and practice” and were approved by the government. The prosecution tried to argue that the Principal is the Board of Directors, who did not know about the payments. This debate seems absurd. The Prime Minister of Bahrain has been in power for 42 years, and to most Bahrainis, his knowledge of the payment would serve as implicating evidence, not an excuse to exonerate corruption as happened in the British courts.
Corruption has indeed developed as custom and practise in Bahrain, not among ordinary people but among government officials that work in an autocratic and nepotistic political system that blurs the lines between public and private, state and family business, personal relations. The regime routinely jail those convicted of bouncing cheques of miniscule amounts, but have not to date convicted a single significant royal for large-scale corruption.
The book The Corruption and Misuse of Public Office gives examples of some of these cases. “Lord Goldsmith in an interview in 2007, stated that the consent of the Saudi royal family was the ‘principal obstacle’ to prosecution arising in the decision not to prosecute British Aerospace in the case of Al Yamamah contract in 2006. In another case arising before 2004, Jersey investigated several UK defense companies for bribing Qatari officials, but eventually discontinued the investigation because of ‘written confirmation provided by the Emir of Qatar that commission payments had been made with his knowledge and approval.’”
The timing is even more sensitive in Bahrain, where there is an uprising underway demanding democracy and popular representation, accountability and freedom of the press. Non-democratic states are especially susceptible to corruption because their rulers organise their governments with few checks and balances. It is not surprising therefore that senior officials, such as the Emir himself in the case of Qatar, or the Deputy Prime Ministry in the case of Bahrain, intervened directly in cases to state their authorisations of the payments. One cannot reasonably question corrupt practices in the Gulf without questioning the governing systems that prevail there.
Such payments to officials in the Gulf are corrupt because they avoided the democratic process all together. Not recognizing this legitimizes a dictator’s claims to speak on behalf of an entire nation. This applies to the Dahdaleh case in particular, where chronic lack of transparency in Bahrain results in unjust loss of public funds – one of the major causes that sparked the uprising in 2011. Dictatorship and corruption are not ‘ways of life’ endemic to the Gulf, but rather symptoms of a disease the uprising was designed to cure. Giving crooked officials a safe haven by not prosecuting or convicting them when British courts have jurisdiction does no favours for institution-building in the Gulf or Britain’s reputation abroad, particularly as accountability is so elusive in the Gulf itself.
The true scale and extent of the payments made in the ALBA case may never be known given the impunity that the Prime Minister enjoys in the country. Trillions of dollars worth of national assets have been squandered over the past four decades. Bahrain needs a national investigation into corruption, it needs to freeze assets of the Prime Minister and a mechanism to recover these national assets so that every citizen can benefit. Corruption and economic injustice is the main impediment to Bahrain’s economic development and must end.