Thursday, 5th June 2014

Qatar’s World Cup woes: GCC neighbours offer lessons in survival

The positions, or at least the credibility, of some members of the Al-Thani look perilous in the glare of the global scrutiny reignited by The Sunday Times’ investigations into how corruption might have influenced Qatar’s win of the 2022 Fifa World Cup. But this is not the first time Gulf-centred corruption has erupted across the world’s media, and the Gulf’s ruling families appear to have a good survival record.

Saudi Arabia’s Prince Bandar Bin Sultan’s activities surrounding the 1985 Al-Yamamah arms sales appeared – to consumers of western media at least – to threaten his powerbase. Qatar’s Sheikh Hamad Bin Jassim also appeared vulnerable in 2001 and 2002, when investigators in Jersey looked into trust funds he controlled which seemed to have received payments from defence contractors seeking contracts in Qatar (GSN 698/20, 699/6). But both men went on to greater things, suggesting practices unacceptable elsewhere remain entrenched in parts of the Gulf.

As senior Qataris hunker down to weather the latest media storm, they may want to look to Abu Dhabi for an object lesson in the adroit management of, shall we say, difficult circumstances. The 1991 collapse of Abu Dhabi-based Bank of Credit and Commerce International (BCCI), remains the emirate’s most famous scandal (GSN 425/8, 415/15). A $400m lawsuit was filed against one of the bank’s major shareholders, the UAE’s founding president, Sheikh Zayed Bin Sultan Al Nahyan, but eventually, other actors carried the can – BCCI’s co-founder, Pakistani financier Agha Hasan Abedi; auditors Price Waterhouse and Ernst & Young; and the Bank of England as BCCI’s regulator. To this day, what happened at BCCI remains a mystery.

Two decades later, another Al-Nahyan family member was embroiled in a corruption case. In 2012, an Abu Dhabi appeals court upheld a verdict that MGH, an Emirati woman, was guilty of acquiring illicit profits through her position at Abu Dhabi Water and Electricity Authority (Adwea) (GSN 893/13). She said she had been authorised by then chairman, Sheikh Diab Bin Zayed Al-Nahyan, to include her own company among those eligible for contracts. As the case came to light in December 2010, Sheikh Diab was replaced at Adwea, and lost his post as deputy secretary-general of the Abu Dhabi Executive Council. Around the same time, the former chief executive of Adwea affiliate Taqa, Peter Barker-Homek, brought a US lawsuit alleging Sheikh Diab had received an “agency fee” in excess of $1m a year when Taqa bought the rights to operate Abu Dhabi’s Shuweihat power plant from CMS Generation in Michigan (GSN 901/12, 884/1). However, judges in Michigan said they did not have power of jurisdiction over Abu Dhabi. Barker-Homek – or plain Peter Barker as he is in his new guise as senior principal at The Capital Corporation – has presumably not considered bringing a case in Abu Dhabi.

In the World Cup investigations, blame seems currently to be falling on former football official Mohammed Bin Hammam (GSN 939/9, 933/5, 930/7, 929/9), indicating that prominent merchants, often with senior public positions, also become mired in practices that fall short of globally accepted standards. Bin Hammam’s position seems parlous now, but this may not mark his permanent demise. In the mid-2000s, Emirati businessman Hussain Al-Nowais was named by Italian and German courts as a facilitator of bribes involving Italy’s Enelpower and Germany’s Siemens. Court papers showed illegal payments of €6.1m ($8.3m) were channelled through Nowais’ business and personal accounts. But this apparently had little impact on his standing in Abu Dhabi where, alongside extensive private business interests, he holds senior positions in government agencies that often manage the interface between international businesses and Abu Dhabi’s burgeoning non-oil sector.

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