TITAN ADMITS MAKING USD3.5M PAYMENTS TO BENIN PRESIDENT'S BUSINESS ADVISER AND ELECTION CAMPAIGN TO BUY OPT

Telecoms

US military and intelligence contractor Titan has been fined USD28m for paying a USD2m bribe to the 2001 re-election campaign of President Mathieu Kerekou of Benin to secure the purchase of state incumbent OPT with a dowry to carry out capital projects. The bribe was to secure a higher price for the deal. There is no suggestion the president of the West African state was himself aware of any wrongdoing.

The deal was part of a disastrous foray by Titan Wireless (now defunct) into the African market at the height of the telecoms boom. It formed a joint venture with Benn's OPT. Under the terms of what was described as a Build, Co-operate and Transfer project, it was to install and operate a GSM cellular network, a rural telephony network, a fibre optic backbone and local telephone switching equipment. Most of these initiatives were delivered by Alcatel.

Titan has admitted making illegal payments (through a former employee of Titan Wireless) and has agreed to pay USD28m in fines.The combined penalties are the largest imposed on a company in the history of the Foreign Corrupt Practices Act. That 1977 law bars American companies from bribing presidents, princes and potentates in the pursuit of overseas contracts.

Titan said in February 1999 that its president and chief executive officer, Gene W. Ray, had met with the president of Benin, Mathieu Kerekou, to announce plans for "a state-of-the-art communications system" for the country. Mr. Ray, 66, has been Titan's chief executive since the company was founded in 1981.

The S.E.C.'s complaint said that, from 1999 to 2001, USD3.5 million flowed from Titan "to its agent in Benin, who was known at the time to Titan to be the president of Benin's business adviser." About USD2 million went to the president's election campaign, the commission said, some of it to buy T-shirts bearing the president's picture. President Kerekou was re-elected in March 2001 with 84.1 percent of the vote in a race against his own minister of state.

A similar payment was made rumoured to have been made to a presidential campaign in West Africa by another company investing in an incumbent telco.

(sources: various including: BBC Online and New York Times)