DOJ joins SFO in corruption probe of Bombardier

Bombardier disclosed the development from February in a first-quarter report filed last week. The company said the Justice Department has requested documentation in other ongoing inquiries as well.

The Garuda investigations into Bombardier concern the 2011-12 acquisition and lease of Bombardier CRJ1000 aircrafts by the Indonesian carrier. The probes follow the related May 2020 sentencing by Indonesia’s anti-corruption enforcement agency of Emirsyah Satar, the former CEO of Garuda Indonesia, and Soetikno Soedarjo, the beneficial owner of Singapore-based consulting firm Connaught International.

According to the allegations, Satar had received IDR46 billion rupiahs (U.S. $3.2 million) in bribery payments from Soedarjo in exchange for securing maintenance and procurement contracts for Rolls-Royce, Airbus, Bombardier, and Avions de Transport Regional, including those related to the acquisition and lease of the Bombardier CRJ1000 aircraft. The bribery payments were said to have originated from the commissions received by Soedarjo from each of these airline manufacturers.

Satar was consequently sentenced to eight years in prison, and Soedarjo received six. Bombardier said no charges were brought against it or any of its directors, officers, or employees.

Bombardier said external counsel is currently conducting an internal review into the Garuda transactions. Additionally, the company said it has met with the SFO to discuss the status of the internal review and its potential assistance with the SFO investigation on a voluntary basis.

“Both the SFO investigation and the internal review are on-going,” Bombardier stated in its quarterly report.

Sweden-related inquiry

Bombardier additionally provided an update regarding an ongoing investigation by Swedish authorities into allegations concerning a 2013 contract for the supply of signaling equipment and services to Azerbaijan Railways ADY. Since October 2016, external forensic advisors have been conducting an internal review into the allegations, under the supervision of Bombardier’s general counsel and external counsel.

The ADY contract is being audited by the World Bank Group. In February 2020, counsel assisting Bombardier with the audit received a letter from the Justice Department requesting documents regarding the contract.

“Bombardier is cooperating with the DOJ’s ongoing requests and is currently providing documents and information in response to same,” the company stated. “The corporation’s internal review about the reported allegations is on-going but based on information known to the corporation at this time, there is no evidence that suggests a corrupt payment was made or offered to a public official or that any other criminal activity involving Bombardier took place.”

Transnet inquiry

Bombardier further provided an update regarding allegations reported in the media about “irregularities with respect to multiple procurements regarding the supply of 1,064 locomotives by South African train operator Transnet Freight Rail.” In September 2018, Bombardier Transportation South Africa was informed the Special Investigation Unit, a forensic investigation agency under the Department of Justice in South Africa, launched a probe with respect to the acquisition of the 1,064 locomotives by Transnet in 2014.

Bombardier said counsel received an additional request from the Justice Department on Jan. 11 “for the communication of documents and information regarding contracts with Transnet and the Passenger Rail Agency of South Africa” and also regarding “an alleged related sale of a Global 6000.”

Bombardier said it is cooperating with the Justice Department’s ongoing requests.