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RCMP charge Canadian in foreign-bribery crackdown Add to ...

At Cryptometrics, an Ottawa high-tech firm that develops facial recognition software for airports and governments around the globe, the engineers are accustomed to dealing with the security industry. But that did not prepare them for the day, more than a year ago, when a team of RCMP officers descended on the company’s suburban office to interrogate them.

The firm, which has gone as far afield as New Zealand and the United Arab Emirates to sell its security gadgets, came face-to-face with one of the Mounties’ latest, but least publicized, priorities – cracking down on Canadians who try to win contracts by bribing foreign leaders.

With little fanfare, the RCMP revealed this week that it had charged Nazir Karigar, a Canadian citizen and a former Cryptometrics official who worked for the company in India, under the seldom-enforced Corruption of Foreign Public Officials Act. It is only the second time the criminal charge has been laid since the act was brought into force more than a decade ago – a batting average that has earned Canada much criticism from international observers. In 1997, the federal government signed onto the Organization for Economic Co-operation and Development’s anti-bribery convention, which obliged the country to outlaw such illicit payments. But the OECD has repeatedly complained that precious little has been done since.

This week’s charges are a direct result of the OECD “holding our feet to the fire,” said Cyndee Todgham Cherniak, an international business lawyer with Lang Michener LLP.

“We’ve got the OECD every few years asking us: How many prosecutions have you had? What are your [police officers]doing? We’ve signed onto the OECD bribery convention. We’ve passed the Corruption of Foreign Public Officials Act. And they’re saying, ‘Okay. What have you done lately?’

“Because you can’t say ‘Canada’s holier than thou – all we have are angels.’ People must be engaging in this behaviour. Why haven’t we found it?”

Part of the reason, legal experts say, is because no one was ever tasked specifically with investigating such crimes. The only other prosecution brought under the act, which was against an Alberta company that pleaded guilty in 2005 to bribing a U.S. immigration official, was a case delivered to the RCMP “with a bow on it” from their counterparts in the United States, sources familiar with the investigation said.

But in the fall of 2007, the RCMP devoted two teams – one in Calgary, the other in Ottawa – consisting of 14 total officers focusing exclusively on international anti-corruption. It is one of the few extraterritorial crimes, in addition to terrorism, torture and sexual exploitation of children, the force is entrusted to probe.

“Basically, we’re making history here,” said RCMP Corporal Brigitte Gauvin, who explained that more charges in the case are expected.

But if the work is ground-breaking, the Mounties have done little to promote it. Last week, almost 24 hours after announcing that they were holding a press conference to discuss the charges, the RCMP cancelled the event. Exactly who Mr. Karigar has been accused of bribing, or intending to bribe, within the Indian government has not been publicly disclosed. The force also refused to identify the company that Mr. Karigar worked for at the time of the alleged offence. Sources close to the investigation, as well as former Cryptometrics employees, confirmed that it was Mr. Karigar’s work in India, where he represented the company, that is the focus of the probe.

“If they want to see the business community adjusting to the new reality of this legislation, they probably need to be a bit more forthcoming about criminal charges that they bring,” said Milos Barutciski, a partner at Bennett Jones LLP and an expert on the law.

Cryptometrics has not been accused of any wrongdoing. The company’s officials did not respond to requests for comment, nor did Mr. Karigar.

The company is headquartered in Tuckahoe, N.Y., which could expose it to questions from the FBI. The United States, which was the first country in the world to outlaw foreign bribery, has been particularly aggressive about enforcing its Foreign Corrupt Practices Act. In the same time it has taken Canada to secure one conviction, the U.S. has recorded about 200. Siemens AG, the German-based engineering company, was hit with $1.6-billion in fines in 2008 after an FBI-led investigation.

Mark Mendelsohn, a former U.S. Department of Justice lawyer who recently headed enforcement of his country’s foreign anti-bribery law, said one of the keys to his country’s clampdown on foreign corruption was the introduction of specialized teams within the FBI to complement the specialist prosecutors.

“In a similar way, the RCMP’s creation of two dedicated teams ... now appears to be bearing fruit,” said Mr. Mendelsohn, who became a partner at Paul, Weiss, Rifkind, Garrison & Garrison LLP in Washington in April.

He declined to comment specifically on the case of Mr. Karigar and whether the United States was playing a role.

Speaking generally about both countries, he said: “It would not be surprising if the specialized FBI and RCMP units began collaborating given the many connections between U.S. and Canadian commerce.”

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