Windward Trading Sentencing Conclusions

1.
1
Attorney
General
-­‐‑v-­‐‑
Windward
Trading
Ltd.
Prosecution
Sentencing
and
Confiscation
Conclusions
In
Summary
1. Windward
Trading
Ltd.
[Windward]
received
and
held
the
proceeds
of
criminal
conduct
perpetrated
by
its
controlling
mind
and
beneficial
owner,
Samuel
Gichuru.
The
company
knowingly
enabled
Gichuru
to
obtain
substantial
bribes
paid
to
Gichuru
while
he
held
public
office
in
Kenya.
The
company
played
the
vital
role
without
which
corruption
on
a
grand
scale
is
impossible:
money
laundering.
2. Gichuru’s
was
the
chief
executive
of
Kenya’s
power
utility,
the
Kenya
Power
&
Lighting
Company
[“KPLC”]
from
November
1984
until
February
2003.
He
accepted
bribes
from
foreign
businesses
that
contracted
with
KPLC
during
his
term
of
office
and
hid
them
in
Jersey.
3. Windward
has
pleaded
guilty
to
four
separate
money
laundering
offences
(counts
2,
4,
5
and
6)
that
confirm
the
scale
of
the
criminal
activity:
A
total
of
£2,599,050
and
US$2,971,743
that
was
acquired
or
possessed
by
Windward
from
29th
July
1999
until
19th
October
2001.
4. The
Prosecution
respectfully
invites
the
Royal
Court
to
first
consider
making
a
confiscation
order
in
this
case
before
moving
to
sentence:
see
Article
3(1)
of
the
Proceeds
of
Crime
(Jersey)
Law
1999.
The
prosecution
applies
to
the
Royal
Court
for
a
confiscation
order
of
£3,281,897.40
and
US$540,330.691
for
the
reasons
set
out
in
the
Attorney
General’s
confiscation
statement.
It
is
understood
that
the
defence
do
not
seek
to
challenge
the
confiscation
order
sought.
1
As
valued
by
the
Viscount
on
23rd
February
2016.

2.
2
5. Ordinarily,
the
Crown
would
then
move
for
a
substantive
fine
to
reflect
the
seriousness
of
the
company’s
offending
but
the
proposed
confiscation
order,
if
made,
will
strip
the
defendant
of
all
its
assets.
If
the
company
is
left
with
no
assets,
then
no
further
penalty
will
be
sought.
6. It
is
respectfully
submitted
that
it
is
of
paramount
importance
that
the
company’s
assets
are
confiscated
and
thereby
transferred
to
the
Criminal
Offences
Confiscation
Fund.
This
process
will
permit
the
repatriation
of
assets
to
Kenya,
the
victim
of
the
offending.
In
detail
7. As
chief
executive
of
KPLC,
Gichuru
was
a
public
officer,
and
his
acceptance
of
bribes,
had
it
occurred
in
Jersey,
would
have
constituted
misconduct
in
a
public
office.
That
was
not
his
only
criminal
conduct.
Contractors
passed
on
the
cost
of
the
bribes
to
KPLC
by
inflating
their
charges
by
disguised
means.
Gichuru
and
the
contractors
defrauded
KPLC.
Windward
laundered
the
proceeds
of
fraud
and
fraudulent
conversion
as
well
as
misconduct
in
a
public
office.
8. Windward
served
as
a
bank
account.
It
received
money,
and
dealt
with
it
according
to
instructions
given
to
it
by
Gichuru
and
his
agents.
Windward
formed
a
barrier
between
the
foreign
contractors
that
paid
the
bribes
and
the
personal
accounts
of
Gichuru
and
others
who
benefitted
from
the
corrupt
payments.
It
disguised
the
fact
that
the
money
paid
to
Gichuru
came
from
contractors
of
KPLC.
This
is
a
classic
money
laundering
technique
called
layering.
Windward
provided
a
layer
between
the
bribe
payers
and
the
recipients.
9. Gichuru’s
control
of
Windward
Trading
Limited
during
the
period
of
the
indictment
–
29th
July
1999
until
19th
October
2001
-­‐‑
was
total.
The
company’s
appointed
directors
did
take
back
control
of
the
company
in

3.
3
2002
to
the
extent
that
the
directors
filed
a
Suspicious
Activity
Report
with
the
States
of
Jersey
Police
when
it
became
apparent
that
Gichuru
was
unwilling
to
answer
their
questions
about
the
provenance
of
the
company
assets.
The
current
directors
assumed
office
in
2011,
some
nine
years
after
the
event
and
well
after
a
criminal
investigation
had
been
triggered
by
the
filing
of
the
SAR.
No
criminality
or
any
other
wrongdoing
is
alleged
against
the
current
directors
who
were
simply
not
involved
in
the
events
set
out
in
this
case
summary.
10. The
guilty
pleas
to
the
charges
on
the
indictment
(counts
2,
4,
5
and
6)
reflects
the
illicit
payments
made
to
Windward
by
the
following
companies:
i. Knight
Piesold
(Camargo)
ii. Mott
McDonald
iii. Wartsila
iv. Kvaerner
v. Motorola
Israel
(Coburg)
vi. Union
Fenosa
(Ashdene)
vii. Geothermal
Energy
viii. W
Lucy
ix. Capitan
Europe
x. Gapco
Tanzania
xi. Leopard
Systems
Knight
Piesold
11. KP
was
a
civil
engineering
consultancy
firm.
The
firm
worked
extensively
in
Kenya
from
the
1970s,
including
on
very
large
projects
for
KPLC.
KP
used
its
Jersey
company,
Camargo,
to
make
payments
to
Windward.

4.
4
12. Payments
to
Camargo
from
Knight
Piesold
were
justified
by
vague
invoices,
the
terms
of
which
were
dictated
by
KP
when
Camargo
was
told
that
money
was
being
sent
to
it.
Camargo’s
payments
to
Windward,
with
one
exception,
were
not
justified
by
invoices
at
all.
13. Two
of
the
KP
directors
have
provided
witness
statements
in
this
case.
Peter
Garratt
of
KP
is
frank
about
the
nature
of
these
payments:
“It
was
impossible
to
do
work
in
Kenya
without
paying
commissions
to
important
political
figures.
It
was
like
a
tax.
KP
paid
such
commissions
to
various
people.
Without
doing
so,
we
would
never
have
been
able
to
work
there.
One
person
we
paid
……
was
Samuel
Gichuru”.
14. Mr
Illes’
evidence
is
in
similar
terms.
Both
state
that
Gichuru
was
paid
when
KP
was
paid
by
KPLC,
and
that
the
cost
of
paying
Gichuru
to
make
him
KP’s
agent
was
passed
on
to
KPLC,
in
the
form
of
inflated
budget
estimates
and
then
invoices.
Mott
MacDonald
15. KP
was
close
to
another
English
company
that
made
payments
to
Windward.:
Mott
MacDonald
“MM”
16. MM
was
a
mechanical
and
electrical
engineering
consultancy
business,
providing
the
same
services
as
KP
within
its
field.
The
two
businesses
worked
together
on
many
projects
for
KPLC.
17. MM
made
payments
to
Windward.
Mike
Durham
was
a
director
of
MM.
In
his
statement
he
is
frank
about
the
purpose
of
these
payments:
“I
knew
that
[MM]
had
arrangements
to
look
after
Gichuru.
Gichuru
was
not
an
agent
in
the
proper
sense
of
the
word.
He
was
our
client.
He
was

5.
5
the
distributor
of
work,
although
I
don’t
know
what
KPLC’s
internal
processes
were,
and
he
was
good
to
us.
Gichuru
was
not
doing
anything
for
[MM]
apart
from
being
our
client.
The
only
purpose
of
these
payments
was
to
help
Gichuru
to
give
us
contracts,
and
to
help
us
have
a
good
relationship
with
him.”
18. One
MM
filenote
graphically
refers
to
these
payments
being
made
to
the
“SG
Mafia”:
“….
All
arrangements
with
SG
are
handled
via
WLPU.
The
current
“levels”
are
8%
to
the
SG
mafia
and
5%
to
ANO
(who
happens
to
be
both
a
Minister
and
part
of
the
mafia)
–
the
other
mafia
members
are
not
aware
of
the
separate
5%
figure
apparently.”
19. Mr
Durham
confirmed
that
the
cost
of
making
the
payments
to
Gichuru
was
passed
on
to
KPLC.
It
was
incorporated
in
the
price
that
MM
bid
for
a
project,
although
the
payments
were
not
identified
as
payments
to
Gichuru.
They
were
incorporated
by
inflation
of
the
hourly
rate
charged
by
MM.
20. The
arrangement
for
passing
on
the
cost
of
bribes
to
KPLC
was
obviously
systematically
applied
by
Gichuru.
We
have
seen
it
already
with
KP
and
MM.
It
also
happened
with
John
Brown/Kvaerner
Energy,
as
will
be
seen
below.
21. Payments
to
Windward
were
accounted
for
in
MM’s
books
as
agency
payments
for
Gichuru.
“Payment
requisition”
forms
requesting
transfers
to
Windward
in
the
early
1990s
allocate
the
payment
to
particular
KPLC
projects,
and
describe
the
payment
as
“agency
fees”.
By
the
late
1990s,
the
fees
were
justified
as
“computer
charges”.
Plainly
Windward
had
provided
no
such
services.

6.
6
Wartsila
22. Wartsila
is
a
Finnish
group
of
companies
with
companies
incorporated
in
many
countries.
Wartsila
won
a
tender
from
KPLC
in
the
late
1990s
to
construct
a
diesel
power
station
that
was
built
at
Kipevu,
a
site
near
Mombassa.
The
construction
contract
was
worth
£57
million.
MM
advised
on
the
tender
process.
23. Wartsila
NSD
Nederland
BV
paid
Windward
£3
million
between
January
1998
and
October
2001.
It
did
so
pursuant
to
a
false
“consultancy
agreement”.
The
first
payment
of
£900,000
was
made
to
Windward
before
Wartsila
officially
knew
it
had
won
the
contract.
24. The
consultancy
agreement
provided
that
Windward
was
to
be
paid
£3
million
in
stages,
with
payments
to
be
made
at
certain
milestones
along
the
way
to
completion
of
the
project.
In
return,
Windward
was
to
“act
as
the
agent
for
the
conclusion
and
performance
of
the
contracts
between
[Wartsila]
as
one
party
and
KPLC
(‘the
client”)
for
[Kipevu
II]”.
Windward
was
duly
paid
in
accordance
with
the
terms
of
this
agreement.
25. This
consultancy
agreement
was
a
cover
designed
to
justify
Wartsila’s
corrupt
payments
to
Windward.
Windward
could
not
provide
any
of
the
services
outlined
in
the
agreement.
Gichuru,
as
chief
executive
of
Wartsila’s
client,
could
not
also
act
as
its
agent
with
respect
to
this
business.
John
Brown
Engineering/Kvaerner
Energy
26. John
Brown
Engineering,
later
acquired
by
Kvaerner
Energy
Ltd.,
paid
Windward
£451,037.
The
first
payment,
of
£65,037,
was
made
in
1986,

7.
7
when
John
Brown
installed
a
gas
turbine
for
KPLC
at
the
Kipevu
power
station
(see
statement
of
McPherson).
27. That
turbine
broke
down
in
the
mid
1990s,
whereupon
John
Brown
first
installed
a
replacement
turbine
for
KPLC,
then
refurbished
and
re-­‐‑
installed
the
damaged
turbine.
John
Brown/Kvaerner
Energy
paid
Windward
£386,000
in
return
for
this
business.
28. Witness
evidence
comes
from
Iain
McPherson,
John
Glover,
senior
sales
manager
at
John
Brown/Kvaerner,
and
John
Gillespie.
Mr
McPherson
explains
how
the
payments
began
with
a
request
from
Mr
Gichuru
for
John
Brown
to
increase
its
contract
price.
Gichuru
then
asked
Mr
McPherson
for
a
consultancy.
Mr
Glover
describes
the
payments
to
Windward
as
bribes
for
Gichuru.
He
adds
that
Gichuru
had
asked
for
the
payments.
Gichuru,
he
says,
was
not
interested
in
the
progress
of
the
project.
He
was
only
interested
in
his
money.
Gichuru
instigated
the
bribes,
and
the
passing
on
of
those
costs
to
KPLC,
so
defrauding
it.
29. In
May
2000
John
Gillespie
of
Kvaerner
Energy
wrote
to
colleagues
about
these
payments
that
“the
award
of
the
contract
involved
a
written
agreement
with
the
Managing
Director
(S
Gichuru)
of
Kenya
Power
&
Lighting
to
pay
a
commission
sum
of
£380K
to
his
off-­‐‑shore
company
–
Winward
Trading…”.
Motorola
Israel/Coburg
Investments
30. Coburg
Investments
was
owned
by
Gichuru.
It
paid
$779,000
to
Windward.
Documents
obtained
from
Coburg
reveal
that
these
payments
came
from
Motorola
Communications
Israel.
The
payments
were
justified
by
“Finder
Agreements”
pursuant
to
which
Coburg
Investments
were
purportedly
paid
for
finding
contracts
for
Motorola
with
KPLC.
The
agreements
provided
for
Coburg
Investments
to
be
paid

8.
8
17%
of
the
fees
paid
to
Motorola
Communications
Israel
by
KPLC.
The
specific
nature
of
the
contracts
to
be
found
should
be
noted.
Plainly,
these
contracts
had
already
been
“found”,
if
not
agreed.
Gichuru
could
not
legitimately
help
Motorola
Communications
Israel
to
find
contracts
with
KPLC.
31. Coburg
Investments
was
a
BVI
company
administered
from
Jersey.
It
provided
Gichuru
with
anonymity,
as
its
administrators
advised
a
previous
owner.
Gichuru
was
plainly
interested
in
anonymity.
The
administrators
of
Coburg
Investment
noted
that
Gichuru
was
to
be
referred
to
only
as
SG,
and
didn’t
want
anything
in
writing.
Union
Fenosa/Ashdene
32. Ashdene,
a
company
administered
in
Luxembourg,
sent
$554,000
to
Windward.
Ashdene
obtained
its
money
from
Union
Fenosa,
a
Spanish
construction
company,
that
did
work
for
KPLC.
Geothermal
Energy
W
Lucy
Capitan
Europe
Gapco
Tanzania
Leopard
Systems
33. These
companies
all
made
payments
to
Windward
and
all
secured
contracts
with
KPLC.
Howard
Sharp
QC
Central
Chambers
23rd
February
2016

9.
9