SFO secures two Unaoil convictions, but judge critical of director

Now the bad news: SFO Director Lisa Osofsky’s conduct is under review over how she led the case, particularly regarding “flattering” text messages she shared with a U.S.-based private investigator who was acting for the company’s owners but had no recognized legal role in the case.

On Monday, Ziad Akle, formerly Unaoil’s territory manager for Iraq, was convicted by a jury at Southwark Crown Court of two offenses of conspiracy to give corrupt payments.

Stephen Whiteley, former vice president at Dutch oil company SBM Offshore and Unaoil’s territory manager for Iraq, was also convicted of one corrupt payments offense.

Both were found guilty of paying more than $500,000 in bribes to win contracts worth more than $55 million to supply offshore mooring buoys.

Basil Al Jarah, who was Unaoil’s Iraq partner, had already pled guilty in July 2019 to five offenses of conspiracy for paying $6 million in bribes to secure $800 million of contracts for oil pipelines and offshore mooring buoys.

The jury was not able to reach a verdict on two counts facing a third defendant, Paul Bond, a former senior sales manager for SBM Offshore. His retrial date will be announced next week when the judge hands down Al Jarah and Whiteley’s sentences.

In the years of reconstruction following the overthrow of Saddam Hussein in 2003, the three men conspired with others to pay bribes to public officials at the Iraqi South Oil Company and, in Al Jarah’s case, the Iraqi Ministry of Oil, to secure oil contracts for Monaco-based Unaoil and its clients.

The post-occupation Iraqi government had commissioned Iraq’s national South Oil Company to run projects as part of a “Master Plan” to rebuild the country’s oil industry and thereby expand its oil export capacity. This included the installation of offshore mooring buoys and new oil pipelines. To ensure Unaoil benefitted from these state-run projects, the defendants and co-conspirators bribed public officials at the South Oil Company and Ministry of Oil to secure contracts for Unaoil and its clients SBM Offshore and Leighton Offshore.

Concerns regarding Osofsky’s conduct were revealed after Akle attempted to have the case against him dismissed. He argued that David Tinsley, a Florida-based private detective and founder and chairman of 5 Stones intelligence, and the SFO had “brazenly flouted” guidelines meant to ensure improper pressure is not brought to bear on a defendant to plead guilty.

Tinsley had been hired by members of the Ahsani family, the owners of Unaoil, after the SFO and U.S. prosecutors began investigating its affairs. Akle’s defense team argued Tinsley approached Akle and Al Jarah behind their lawyers’ backs and improperly “browbeat” them to plead guilty to corruption charges in return for lenient sentences. Tinsley is alleged to have fed details of his discussions with Akle and Al Jarah to Osofsky and others at the SFO, who seemingly encouraged him.

In his ruling, Judge Beddoe dismissed the application but said he “upheld some of the criticism which has been advanced at a very senior level within the SFO.”

He said Osofsky and others at the agency should have had nothing to do with Tinsley, whom he said was “someone who had no official status, who was not employed by any U.S. government agency, was not the Ahsanis’ lawyer (not a lawyer at all), but a freelance agent who was patently acting only in the interests of the Ahsanis … and they should not have countenanced let alone encouraged (if only tacitly) his contact” with Akle.

According to Beddoe, Tinsley “was not hesitant in flattering Ms. Osofsky and talking up her talents, and unfortunately Ms. Osofsky made herself vulnerable to them.”

He also doesn’t rule out Tinsley influencing Al Jarah’s decision to plead guilty.

In response, an SFO spokesperson said: “The judge in this case found no evidence that the SFO acted in bad faith, nothing unlawful and nothing to prevent the case proceeding to trial,” adding, “We accept his criticisms of the way a contact was handled. A review will be conducted into this matter, and a protocol covering contact with non-legal representatives has been put in place.”

The review, which is not a disciplinary procedure, will relate only to the specific concerns raised by Judge Beddoe in relation to the Unaoil case—primarily Osofsky’s conduct, as well as some of her team—but the exact scope and terms of reference will be finalized once the agency appoints independent counsel to conduct it.

It has no fixed timeframe and will not take place until after Bond’s retrial. Osofsky will continue to act as director while it is being conducted.

Iskander Fernandez, an expert in white-collar crime at law firm BLM, believes the judge’s criticisms in his ruling are “serious” and are “made all the more serious given the role Osofsky holds and the ongoing criticism the SFO has received to date.”

Leigh Crestohl, a partner at law firm Zaiwalla & Co, says the case “is something of a bittersweet success for the SFO.”

“The agency has gone through a period of scrutiny and concern about its efficacy and to now have a success tainted by allegations of misconduct and some judicial criticism may only shift the perception slightly,” he says, adding that the judge’s rebuke may force the SFO to re-evaluate how it works with external intelligence services providers in future.