Operation Blare: A Detailed Investigation into Foreign Bribery

Podcast: Crime Interrupted
Host/Author: Casefile Presents
Episode: Operation Blare
Release Date: June 9, 2023

Introduction to Operation Blare

Crime Interrupted delves into the intricate case of Operation Blare, an Australian Federal Police (AFP) investigation targeting foreign bribery schemes aimed at securing lucrative contracts in Iraq. This episode sheds light on the meticulous strategies employed by the AFP to dismantle a sophisticated network of corruption that had far-reaching implications both internationally and domestically.

The Genesis of the Investigation

Operation Blare was initiated in 2014 when the AFP's Intelligence Teams intercepted live conversations concerning a potential bribery deal. Unlike typical financial crimes, which are often historical and require investigators to piece together evidence over years, this case was dynamic and unfolding in real-time.

Martin Fryer, AFP Intelligence Manager for Financial Investigations, remarked at [02:01]:

"When you get a live investigation, it's happening right then and there. Most foreign bribery happens behind closed doors. With the live investigation, we were not only through that door, we actually had people in that room listening to the conversations live."

The initial focus was on a group orchestrating a deal to bribe an Iraqi official to supply sugar to the Iraqi government. This unexpected development came from a surveillance team initially investigating organized crime in Sydney.

Unraveling the Sugar Deal

The intercepted conversations revealed discussions about sourcing sugar from Brazil to Iraq, initially amounting to 100,000 tonnes. The deal promised substantial profits through inflated pricing and bribes to officials.

At [05:48], Martin Fryer explained:

"The actual volume changed considerably from when we were investigating it, but it was around 100,000 tonnes that they were starting to source... the Iraqi government agent... requested that the group draft a contract up for $638 per ton. Based upon that volume... it raised an extra $15 million, which we suspected would be paid to the foreign public officials in Iraq."

This scheme not only involved a significant financial bribe but also resulted in a near 40% increase in sugar prices for Iraqi citizens, illustrating the broader impact of foreign bribery.

Transition to Construction Projects

As the political instability in Iraq surged due to ISIS raids, discussions about the sugar deal diminished. However, the focus shifted from sugar to construction projects, including oil wells and waste facilities. Matthew Smith, Detective Acting Sergeant in the AFP, noted at [13:02]:

"The difference of investigating drug criminals and then white collar criminals is the drug criminals are quite street wise, they will try, try and use codes that disguise what they're talking about... but for white collar criminals, those conversations are pretty straightforward."

This transition required the AFP team to gain expertise in the construction and energy sectors to understand the new bribery avenues fully.

The Attempted Bribe and Money Laundering

A critical turning point occurred when John, an intermediary, and two construction brothers traveled to Iraq to secure contracts. Upon their return, John was apprehended by the Australian Border Force with $1 million in cash, intended as bribes.

At [20:33], Martin Fryer stated:

"When John arrived back in Australia, his bags were searched and he was interviewed by Border Force. He was found to be in possession of documents relating to the company and other Iraqi government business cards linked in with Iraqi officials that we knew they had met with."

Despite the large sum, John’s method of transferring the money through a hawala system—a traditional money transfer system—was rudimentary and easily traceable. This oversight by John provided the AFP with concrete evidence linking the bribes to the intended officials.

Matthew Smith added at [30:35]:

"He was quite concerned. He identified that what he was going to do, which was launder money, was going to carry a penalty of 20 years imprisonment."

Arrest and Legal Proceedings

With compelling evidence, the AFP moved swiftly to arrest John and the two brothers involved in the scheme. The arrest phase was meticulously planned, involving multiple jurisdictions and thorough risk assessments to ensure a seamless execution.

However, an unexpected incident delayed the process. Matthew Smith sustained a shoulder injury just days before the planned arrest, humorously noted as having a "superpower" to fly on his doctor’s certificate [37:35].

Undeterred, the AFP proceeded with the arrests. During interviews, the defendants' awareness of the illicit nature of their actions became evident, further solidifying the case against them.

In court, John and the brothers pleaded guilty to foreign bribery. They received substantial sentences, including a non-parole period of two years and head sentences of four years, alongside hefty fines.

The Broader Context of Foreign Bribery

The episode contextualizes Operation Blare within the global fight against foreign bribery. It traces the evolution of anti-bribery laws, highlighting the landmark U.S. Foreign Corrupt Practices Act (FCPA) of 1977, which set the precedent for international legislation. Australia followed suit in 1999, aligning with the Organisation for Economic Cooperation and Development (OECD) standards to criminalize foreign bribery.

Martin Fryer emphasized the international collaboration in combating such crimes at [46:05]:

"It's every member of the OECD has a body similar to the Australian Federal Police and they're all involved in pursuing this sort of crime. We work together, we don't work in isolation."

Impact and AFP’s Ongoing Efforts

Operation Blare serves as a testament to the AFP's dedication to eradicating foreign bribery. The successful prosecution of the defendants not only disrupted their corrupt activities but also sent a strong message to the business community about the severe consequences of engaging in such practices.

Matthew Smith concluded at [42:49]:

"Companies in Australia, now that they're seeing these actions taken, are getting legal advice, are tightening up some of their systems and their policies to make sure that they are compliant and that they can avoid the sort of outcomes that we're talking about."

The AFP continues to collaborate internationally, sharing intelligence and strategies to tackle foreign bribery comprehensively.

Conclusion

Operation Blare encapsulates a pivotal moment in the AFP's ongoing battle against foreign bribery. Through vigilant surveillance, international cooperation, and strategic legal actions, the AFP not only curtailed a significant corruption scheme but also reinforced the importance of integrity in international business dealings. This episode underscores the far-reaching impacts of foreign bribery and the relentless efforts required to uphold ethical standards globally.

For more insights into Operation Blare and other AFP investigations, stay tuned to Crime Interrupted.

Notable Quotes:

• Martin Fryer [02:01]: "When you get a live investigation, it's happening right then and there..."
• Matthew Smith [13:02]: "The drug criminals are quite street wise... but for white collar criminals, those conversations are pretty straightforward."
• Martin Fryer [20:33]: "John was found to be in possession of documents relating to the company..."
• Matthew Smith [30:35]: "He was quite concerned... carry a penalty of 20 years imprisonment."
• Matthew Smith [42:49]: "Companies in Australia... are getting legal advice, are tightening up some of their systems..."

References:

• For more information on how the AFP combats international bribery, visit afp.gov.au.