How Rolls-Royce Bribed Its Way Around the World Panorama

Three, two, one...

It is Britain's most iconic brand,

but has Rolls-Royce's success been fuelled by corruption?

Their business model has been based on

the systematic use of agents or middlemen

to effectively try and bribe their way to contracts.

We travel to places where Rolls-Royce

is accused of paying bribes.

He states the names of several companies

that he received bribes from.

One of those companies is Rolls-Royce.

'We find the middleman who reveals how corruption wins business.'

Wouldn't it be reasonable, then, for Rolls-Royce to say,

"We don't know what they were doing"?

They had to have known, they would have known.

It's just the way it works.

Mr Ginger?

'And why would an arms salesman

'pay a bag full of cash into a Swiss bank?'

Was the money that went into your Swiss account a bribe?

Was the money that went into that Swiss account,

-was that a bribe, sir?

-Don't be ridiculous!

CROWD CHANTS

'People are on the streets in Rio.

'The Brazilian President has just been forced from office

'and the country is divided.'

Fora Temer!

'It is a political crisis caused by corruption.

'For years, politicians and state officials have been taking bribes.'

I never saw my countrymen so angry as in the last couple of years.

If you are afraid of losing your job and then you watch TV and you see

all these guys taking millions of dollars in bribes,

you are going to feel angry - very, very angry.

'Now the truth is coming out

'and it doesn't look good for Rolls-Royce.

'It all centres on Brazil's state oil company.

'It's called Petrobras and it's huge.'

This gives you a sense of the scale of the Petrobras operation.

This facility is just off the coast of Rio.

Petrobras is one of the biggest companies in South America,

it produces two million barrels of oil every day

and it does that using equipment

supplied by foreign companies, like Rolls-Royce.

'For Rolls-Royce, this was big business.

'One contract alone was worth 100 million.

'But to win contracts like this, companies were paying bribes.'

TRANSLATION:

'This is Pedro Barusco,

'one of the Petrobras executives who handled the bribes.'

'He's done a deal and named the companies who paid bribes.

'This is the first time

'the prosecutor has spoken about Rolls-Royce and Barusco.'

I could point you towards a deposition

where he states the names of several companies

that he received bribes from. One of those companies is Rolls-Royce.

'And Barusco told the authorities about that 100 million contract.'

Rolls-Royce made some payments.

He does not remember exactly who benefited

from the division of bribes,

but remembers he got at least 200,000 US dollars.

'The Rolls-Royce bribes were paid by a middleman.

'It was the standard way of moving the corrupt money.'

With the foreign companies, the most common means to pay bribes

would be to hire a consultant,

and that person would be responsible to deliver the money

to Petrobras directors or the politicians.

'Prosecutors in Brazil say Rolls-Royce is co-operating.

'But its reputation here has been badly damaged.'

What do you think, then, of a company like Rolls-Royce

that's paying bribes to get contracts?

I think they are a big part of the problem.

Perhaps even a bigger part than the Brazilian government is,

in the sense that... Come on! We're talking about

VERY rich companies, you know, very powerful.

They operate everywhere across the globe.

So they come to Brazil to do that?!

They are just like the bad companies in Brazil.

I mean, that's awful!

'So how has Rolls-Royce ended up in this position?

'The company doesn't make cars any more - that was sold to BMW.

'This promotional video shows what Rolls-Royce is famous for now -

'building engines for aircraft.

'It employs 23,000 people in the UK.'

Every day, aircraft are taking off with British wings,

British landing gear, Rolls-Royce engines.

We can be incredibly proud of this industry.

'Up until a couple of years ago, growth was spectacular.

'In 15 years, the company's sales tripled,

'profits increased fivefold.'

Rolls-Royce is that sort of Great British tradition

of engineering excellence which I think people really respect.

It is a respected and trusted brand.

The company has been through phenomenal growth.

It entered into new markets, it went into new geographic territories

and it became a real global power.

'But serious questions are being asked

'about just how Rolls-Royce managed to grow so quickly.

'Alongside The Guardian newspaper,

'we've been investigating the company.'

We've got evidence that Rolls-Royce was using dubious middlemen

to win contracts in countries where corruption was widespread.

One of Britain's most prestigious companies

was bribing its way around the world.

'In 2013, the Serious Fraud Office in the UK started investigating

'the way Rolls-Royce had won contracts for jet engines.

'A former Rolls-Royce employee

'claimed big bribes had been paid in Indonesia.

'He said 20 million was given

'to the former president's son Tommy Suharto

'to make sure Indonesia's main airline used Rolls-Royce engines.'

The fact that there is credible evidence from inside the company

that the company is paying bribes

to people very closely linked to senior politicians

suggests, in all instances, prima facie evidence of corruption.

'Tommy Suharto has denied the allegations, but in 2011,

'a second whistle-blower, using the cover name Soaringdragon,

'suggested Rolls-Royce had paid bribes

'to win contracts at two airlines in China.

'According to Soaringdragon,

'a middleman paid bribes to a Chinese airline executive.'

The Chinese authorities investigated

and the airline executive involved was convicted of taking bribes.

Now, he has been jailed for life,

but no action has been taken against Rolls-Royce.

'Crucial parts of the case have been kept secret,

'including the name of the company paying the bribes,

'but Rolls-Royce secured contracts worth 2 billion

'from two Chinese airlines

'in the same period that the bribes were paid.'

If one puts the information

that we have been able to glean from the court case,

in which someone was sentenced to a life term for corruption,

if we look at the sort of aircraft involved,

the sorts of engines that that aircraft uses,

if we look at the allegations made by Soaringdragon,

that were instrumental to this court case,

all of those things together point to Rolls-Royce.

'Rolls-Royce says it's fully co-operating with the authorities

'and cannot comment on ongoing investigations.

'It says it completed

'a thorough review of its anti-corruption policies,

'including the use of advisers and intermediaries.

'Rolls-Royce has sold equipment

'in some of the most corrupt countries on the planet.

'It used middlemen to help.

'I've come to the south of France

'to meet someone who knows how it works.'

Right now, I'm probably the only guy that is stepping up to the plate,

kind of giving you a kind of inside look

from my perspective on how it worked when I was there.

'Lindsey Mitchell used to work for a Monaco-based company called Unioil.

'It's also under investigation by the Serious Fraud Office.'

You know, you became the guy that had the connections.

'Unioil worked for Rolls-Royce

'in countries like Iraq, Angola and Kazakhstan.'

Just beyond this FedEx truck, on the right-hand side,

is the Unioil office.

-Just down there?

-Yeah. Right in there.

'This is the first time Lindsey has talked about

'the corruption he saw when he worked here.'

Strange to see it again?

Very strange.

'He is about to make an extraordinary confession.

'He bribed an oil official to try to help a client win business.'

I don't call it a bribe, I call it a facility payment or commission,

but in layman terms, it would be called a bribe.

I...made the payment at the gentleman's house

at 11 o'clock at night, dropped it off.

How heavy was the envelope?

Thick.

-Thick with money?

-Yeah.

I just dropped it off, "Here is your gift," yeah.

And what did he say?

"Thank you, let's have a coffee."

So we had a coffee.

And that's it?

-That's it.

-That how it works?

That's how it works.

But Unioil was happy to pay that bribe?

They were happy to pay the facility payment.

'Rolls-Royce wasn't one of Lindsey's clients,

'but he believes Unioil paid bribes for Rolls-Royce too.'

If they are representing Rolls-Royce,

it would be Unioil's responsibility

to make sure that the commissions, the facility payments,

and/or you want call them bribes,

were made to the proper officials to make the...

er...

the sale.

Would it be reasonable, then, for Rolls-Royce to say,

"Look, we went to Unioil to get us work,

"we don't know what they were doing"?

They had to have known, they would have known.

Someone within the management of Rolls-Royce or any other company

that Unioil represented knew there was facility payments

or commissions being paid to get business.

It's just the way it works.

'There is evidence that appears to support what Lindsey is saying.

'Unioil e-mails that were leaked to the Fairfax Media Group

'suggest paying bribes was commonplace.

'And some involve Rolls-Royce.

'This document shows Unioil put aside 284,000

'for middlemen or sub-agents on a Rolls-Royce job in Iraq.

'And this e-mail shows how gifts were bought

'for an official involved with the contract.'

Mr X is our key contact to obtaining the current contract

valued at 17 million,

and I am pursuing him hard for the next set of turbines

valued in excess of 23 million.

'The e-mails show that Unioil took the official shopping in London,

'spending more than 2,000 on luxury goods.

'They even spell out why they are doing it.'

Spending 2,684 on a key decision-maker

is worth 100 times that value,

without which we would have no contract in our hands now.

The value of that jacket starts to show now.

"Spending 2,700 on a key decision-maker

"is worth 100 times that value,

"without which we would have no contract in our hands now."

-These are all internal Unioil e-mails?

-That's right.

They refer to people who are working on Rolls-Royce accounts.

'We showed the evidence to a bribery expert.'

The e-mail is describing

gifts entirely intended to secure business.

When there's quite clearly stated

the object of giving the gifts is to get access to a decision-maker

who might otherwise not favour your business,

then it plainly is intended to induce a positive decision.

Some of the numbers are quite small, just over 2,000,

things like a leather jacket.

It seems very small amounts.

It doesn't matter.

What matters is the purpose for which the gift is given.

If the expectation is, and plainly what these e-mails reveal,

is that these things were done

with a clear expectation of business being granted,

that's bribery.

'Unioil told us any allegations of corruption are denied

'and it would be inappropriate to make further comment

'because of the ongoing investigation.

'The company...'

Rolls-Royce faces questions around the world

about the way it does business,

but some of the biggest are here in India.

'Rolls-Royce has already been caught out here.

'In 2014, it offered to pay back £1.8 million commission

'that it had secretly paid to a middleman.'

Rolls-Royce actually wrote,

offering the return of the money that it had paid in those deals.

Is the suggestion, then,

that there were bribes involved, that there were kickbacks?

Why was the agent being paid that kind of money

if it was not something illegal?

'The most serious questions relate to the biggest deals

'and, for Rolls-Royce, they're often defence contracts.'

No big defence deal takes place without money changing hands.

Defence deals are big deals.

Most of government consists of small-ticket items,

building a bridge here, or building a road there,

but once you come to defence,

you suddenly get into multi-million dollars,

or 10 billion, 5 billion,

so the payoffs there are huge.

CROWD CHEERS

'Rolls-Royce supplies engines for the Hawk jet used by the Red Arrows.

'The Indian government bought 123 of them

'and that earned Rolls-Royce around £400 million.

'David Cameron was in India to celebrate.

'It's just one of Rolls-Royce's defence deals in India

'and, once again, they are said to involve a secretive middleman.

'He is a London-based billionaire who has built a business empire -

'Sudhir Choudhrie. Here he is,

'picking up a business achievement award from Theresa May.'

The entire community was there, the Asian community,

and everyone was very delightful.

'The Choudhrie family

'has given more than £1.6 million to the Liberal Democrats

'and Mr Choudhrie is now an adviser on India

'to party leader Tim Farron.'

Sudhir Choudhrie is a most important defence agent in India

and he probably is among the world's most powerful arms agents today.

He is a global figure.

We are talking about billions of dollars of money worth of deals.

'But Sudhir Choudhrie

'was not registered as a defence agent in India.

'It is illegal to pay secret middlemen to win defence contracts,

'but that seems to be what Rolls-Royce was doing.'

When the defence scam surfaced in this country,

the ministry and the government banned agents

and they said companies have to deal

through recognised offices opened in the country.

They are not allowed to deal through these little agents, you know,

who represent opportunities for unseen diversion of funds.

'A man who knows India's murky world of agents agreed to meet me.

'He wanted to remain anonymous, but what he told us

'links Sudhir Choudhrie to both Rolls-Royce and the Hawk deal.'

Does Sudhir Choudhrie work for Rolls-Royce?

I was approached by someone from the Sudhir Choudhrie team in India.

They wanted an introduction to government.

It was to do with the Hawk deal.

They were representing Sudhir Choudhrie, it was very clear.

Why would Rolls-Royce hire such a guy?

Why does it need a consultant with a shady background?

'Panorama understands Rolls-Royce secretly paid around £10 million

'to companies owned by the Choudhrie family.

'Now, Mr Choudhrie denies being paid by Rolls-Royce,

'but he hasn't answered our question

'about payments going to family companies.

'We've also found out

'what the Indian authorities think of Mr Choudhrie.

'Rolls-Royce's man in India

'is officially suspected of corrupt or irregular practices.'

We've got hold of the government's secret list

of undesirable contact men.

Now, it warns civil servants and government ministers

to take extra care when dealing with such unscrupulous persons.

Sudhir Choudhrie is on that list.

It's a blacklist of men with whom

government employees or officials should not deal with,

men who should not be given any contracts, and Sudhir Choudhrie

has had a very prominent position in the UCM list for years.

Why is he on the list?

For the fact that he is known and is accused of

manipulating defence procurement.

So why was Rolls-Royce involved with someone like Sudhir Choudhrie?

For a company like Rolls-Royce to be using, as a middleman,

somebody who clearly has a very poor reputation

suggests that they have very few scruples

about the way they go about their practice of business in India.

'Mr Choudhrie's lawyers told us he...

'And on the Undesirable Contact Men list,

'they said he has...

'In 2014, Sudhir Choudhrie was arrested in the UK as part of

'that Serious Fraud Office investigation into Rolls-Royce.

'His son Bhanu Choudhrie was arrested, too.

'Both men were released without charge.

'They both own houses in this exclusive London square.'

We have found evidence that suggests Bhanu Choudhrie

may have helped Rolls-Royce win that multi-million-pound Hawk deal

and it involves paying what on the face of it looks like a bribe.

'It centres on this man, Peter Ginger.

'He played a key role in selling

'military jets with Rolls-Royce engines to the Indian government.

'We've discovered that Mr Ginger visited Switzerland

'with Bhanu Choudhrie in 2007.

'He opened a Swiss bank account under the name of Portsmouth

'and paid in a large quantity of cash.

'His account later showed a million Swiss francs.

'A source at the bank agreed to speak to us anonymously.'

The documents do show one bank account

containing hundreds of thousands of Swiss francs

opened for Peter Ginger.

I understand that Peter Ginger lodged all of this money in one go,

in cash, in Switzerland.

'So did all that cash have anything to do with Rolls-Royce?

'We asked Peter Ginger what he was doing in Switzerland

'with Bhanu Choudhrie, the son of Rolls-Royce's man in India...'

Sorry, sir.

'..but he wouldn't answer the question...'

So, Mr Ginger, I think, is just over here.

'..so I caught up with him for a chat.'

Mr Ginger?

Hiya, I'm Richard Bilton from BBC Panorama.

Can I ask you a quick question?

-You...

-No, I can't talk to you,

you know I can't talk to you, and please take me off camera.

You put cash worth hundreds of thousands of pounds in your Swiss...

-No, I'm not...

-Was that a bribe, sir?

-Don't be ridiculous!

-Was it a bribe? Now's your chance to tell us.

I'm interested. Don't touch that, just tell me the truth.

Did you...? Was that a bribe? Did that money come from...?

I am... Look, you've asked me the questions,

it's now with my lawyer.

I'm not answering any questions, my lawyer will answer the questions.

You've received a letter from him.

'His lawyer has never contacted us.'

-You haven't responded...

-I don't... I will not respond!

Yeah, but you did tell us something that's untrue, because you told us

that you hadn't been to Switzerland with Mr Choudhrie and you had.

-Go away!

-What did Mr Choudhrie want?

-Go away.

-What did Mr Choudhrie want, sir?

I'm getting into a taxi, don't follow me.

Was the money that went into your Swiss account a bribe?

-The lawyer...

-I'm not pushing you.

Was the money that went into that Swiss account,

-was that a bribe, sir?

-Don't be ridiculous!

I've told you that before.

Deal with my lawyer.

'Mr Ginger told us he has never acted for Rolls-Royce

'or had any financial dealings with the company

'and he says he's never taken nor paid any bribes.

'Bhanu Choudhrie's lawyers told us

'he's never been paid to secure deals for Rolls-Royce in India,

'including the sale of Hawk jets.

'They add Mr Choudhrie has...

'..and has no knowledge of Mr Ginger's banking arrangements.

'The Serious Fraud Office

'now has 30 investigators on the Rolls-Royce case.

'There is a separate investigation in the United States.

'Rolls-Royce could face enormous fines.

'Employees past or present could be jailed.'

Why should our viewers care if a company like Rolls-Royce,

an iconic UK brand, is using middlemen to pay bribes?

They should care because Rolls-Royce is, or should be, better than that.

It's an important brand and it's a brand that should be entirely clean.

'Rolls-Royce says it...

'..and has intensified its...

'It says it has...

I think it's extremely unfortunate the way Rolls-Royce has behaved.

I think their business model has been based on

the systematic use of agents or middlemen

to effectively try and bribe their way to contracts.

I think that that makes,

not only United Kingdom, but the world in which we trade,

a more corrupt place, a less democratic place

and a far more volatile and unstable place in which to do business.

'The golden years for Rolls-Royce seem to be over.

'The company has issued five warnings about falling profits

'in the last two years.

'It's now under scrutiny as never before.

'Bribing its way around the world

'is no longer an option for Rolls-Royce.'