An Irish company with a registered address in Drumcondra, Dublin, has acted as a sales agent in the Philippines, India and elsewhere for customers that include one of the world’s largest aerospace and defence conglomerates, the leaked files of the Mossack Fonseca (MF) law firm reveal.
The company, Intertrade Projects Consultants Ltd, with a registered address on Botanic Avenue, Dublin, has also entered into subagency agreements with a succession of offshore companies through which it agreed to share the commissions earned from any sales achieved. Such structures are considered controversial in the arms sector because of their potential to facilitate bribery.
The ownership of Intertrade is not clear, nor is how much it earned over the years. Likewise, the ownership of the offshore companies with which it concluded subagency agreements is obscure. However in one instance, a subagency agreement in relation to arms sales in India was signed with an Indian national who has been linked to corrupt sales procurement from the United Nations.
The leaked files of the Mossack Fonseca law firm show that, over two decades, Intertrade negotiated sales promotion agreements with subsidiaries of the Italian conglomerate, Finmeccanica, and other companies, with the products specified in the agreements including military aircraft, torpedoes and electronic warfare equipment. Finmeccanica, which is 30 per cent owned by the Italian government, is one of Italy's largest employers and is used by the Italian government to hold strategically important businesses.
Jet fighters, radar systems, electronic warfare equipment, helicopters and rail infrastructure are among the products produced by the conglomerate. It is currently involved in two ongoing controversies linked to the payment of bribes in India and Panama.
There is no suggestion intended that Intertrade had any link with the Indian and Panamanian scandals and nothing in the leaked files suggests it has been involved in any corruption or improper payments. However, according to Nicholas Gilby, author of Deception in High Places: A History of Bribery in Britain's Arms Trade, the creation of agency and subagency agreements involving offshore companies is a very controversial topic for the arms trade and is often linked to suspicions of corruption.
A spokeswoman for Finmeccanica said it required preliminary due diligence on any advisers or promoters with which it did business, including beneficial ownership, and that this applied irrespective of the country of incorporation. She said no party could sign subagency agreements without Finmeccanica’s consent. “It is not policy of the current Finmeccanica to agree to any assignment to third parties.”
The MF files link Intertrade with a parent company in the Bahamas and a trust in the tiny south Pacific tax haven of Niue. Recent accounts filed by Intertrade in Dublin state the company is ultimately controlled by Claudio Piccinin, a citizen of the Philippines with an address in Manila. Mr Piccinin, in an emailed statement to The Irish Times, said it was normal to hold shares by way of nominees, for practical and confidentiality reasons, and that he was not in a position to give an "informed opinion" on whether using offshore companies in arms deals created transparency problems.
He said Intertrade had never been “operational” in India for a Finmeccanica company, was not a successful venture and was being closed down. He said it was mainly operational in the Philippines, where he has lived for 18 years and where Intertrade was not his main venture.
There was no response from Paky Houriet, a US-Greek lawyer who has acted under power of attorney for Intertrade and who conducts a lot of business with MF for Intertrade and other clients.
The Pegasus Trust, a small trust and corporate services provider based at the Botanic Avenue address used by Intertrade, acts for Intertrade in its dealings with MF. Intertrade uses nominee directors provided by MF in Panama and the leaked files show a succession of emails in relation to Intertrade coming from Piccinin and Houriet to Pegasus, and from there to MF in Panama, in relation to the signing of documents and other matters.
The leaked files show Intertrade negotiated subagency agreements with entities based in the British Virgin Islands, the Bahamas, the Philippines, Hong Kong, and the US. As a condition of these subagency agreements, a large percentage of the commission due to Intertrade as a result of any sale is to go to the counterparty to the subagency agreement. It is also a condition of the agreements that they remain secret. In most cases Intertrade has the permission of the principal company to enter into the subagency agreement.
The files show that the subagency agreements included one in 2002 with Thunderbird Industries, of Georgetown Pike, Virginia, in relation to products produced by Elettronica, an electronics warfare specialist based in Rome in which Finmeccanica is a 30 per cent shareholder.
The products involved electronic warfare and other equipment for helicopters used by the Indian navy and air force, with Thunderbird to get commissions of 15 per cent and 4 per cent respectively of sales achieved in two different categories of product during the following two years.
An Indian national called Nanak Kohli signed for Thunderbird, with Intertrade director Martha Edghill, with an address at the MF offices in Panama City, signing for Intertrade.
Thunderbird and Kohli featured in a United Nations scandal in the mid-2000s in New York that saw UN procurement officer Sanjaya Bahel jailed for eight years for helping Thunderbird and the Kohli family secure contracts worth tens of millions of dollars from the UN. Bahel, who received cash, first-class plane tickets, and reduced prices as a renter and then a purchaser of a luxury New York apartment from the Kohlis, was convicted of bribery in 2006 after evidence was given against him by Nanak Kohli’s son, Nishan.
The beneficiaries of the bribery included an Indian-government-owned company called Telecommunications Consultants India Ltd. There is no evidence in the leaked files that the deal involving Thunderbird and Intertrade involved any bribery and no such suggestion is intended.
Intertrade was first incorporated as a UK company, using MF directors based in Panama, in 1993, and in the following years negotiated several sales promotion agreements. An Irish company of the same name was incorporated in March 1997. When the UK company was dissolved in 2000 a number of the agreements it had negotiated were transferred to the Irish company.
In October 2002 Intertrade, then with an address at Warrington Place, Dublin 2, signed an agreement with Finmeccanica company Alenia Aeronautica Spa, in relation to the sale of radar, command and control, and other equipment to the Philippine government, as well as a second, similar agreement in relation to the potential sale of troop transporters to the Filipino ministry of defence.
In the former agreement, Intertrade confirmed it was familiar with and would comply with provisions of Italian law ratifying the OECD Convention Combating Bribery of Foreign Public Offices in International Business Transactions and agreed neither it nor any of its employees were affiliated with the Filipino government.
In the latter agreement it confirmed that it would maintain close liaison with the Filipino defence ministry and expressly guaranteed it would not bribe any Filipino official.
In another document, Intertrade agreed to help promote the sale of electronic warfare products in India for Elettronica and it signed a subagency agreement with an entity called Sisur Business Corporation of the British Virgin Islands. The MF files include an invoice dated April 3rd, 2000, from Intertrade, seeking €112,399.70 arising from this agreement, and asking that the money be lodged with the Bank of Greece, in Athens.
An undated document in the MF files details proposed co-operation between Intertrade and Eurotorp, a consortium that included Finmeccanica and was based in France. The document was concerned with the possible sale of A244/S light torpedoes to the government of the Philippines.
A fax contained in the files referred to a 1995 sales agreement between Intertrade and Alenia in relation to the sale of air traffic control systems to the republic of Myanmar, and a subagency agreement with a company called Frontier (East) Ltd, with an address in the British Virgin Islands. Frontier was to receive 15 per cent commission on any sales achieved.
Another agreement, from 2002, concerned the construction of an underground railway system in Manila, while another again refers to the upgrading of the Ladag international airport in the Philippines.
The running of Intertrade, which has no employees and very little money going through its accounts, involves a number of entities and persons around the globe. A company in Rome called BSI International Corporate Services acts for it in its dealings with Finmeccanica companies. BSI is controlled by Baron Berthold von Stohrer, whose father was ambassador to Spain for Germany during the 1930s and 1940s.
Instructions in relation to Intertrade come to Pegasus from Houriet and Piccinin, and are passed on to MF, or go directly to MF. For instance in 2002 a fax from Houriet on the headed notepaper of a company based in Geneva called Investment & Financial Consultants Group was sent from Greece to Paul Newman of Pegasus in Dublin, telling him to expect an email from Mossack in Geneva containing a sales promotion agreement which had to be signed by the directors of Intertrade (who are in the Mossack offices in Panama City), and asking Newman to have this done and for a copy to be sent by registered mail to Rome and by fax to her in Greece.
The files contain a reference to a letter from 2000 sent by Baron von Stohrer to Sir Charles Masefield outlining why it would be a good idea to renew an agreement between Intertrade and Alenia. Masefield is a former senior executive of British Aerospace and a former head of the UK's defence export services organisation, which promotes UK arms industry exports. He is also a former marketing director of a BAE Systems, which formed a joint venture with Finmeccanica in 1998.
Slow down assistance
A letter from Intertrade to BSI in November 2005 said that because some contracts were now going to be over a more extended time frame, “we are thus forced to slow down our assistance to our Italian principal”. BSI was informed that its fee would have to be reduced to €90,000 per annum from €120,000.
The MF files indicate that at one stage Intertrade acted as agent for Intertrade Enterprises in the Bahamas, with the Irish company getting 5 per cent of earnings.
When it was incorporated in 1993, Intertrade Enterprises was owned by way of “bearer shares”, a now mostly outlawed form of company ownership where a company belongs to whoever has its share certificate in his or her possession. Later, at about the time the Irish Intertrade company was incorporated, ownership of the Intertrade business appears to have been assigned to a trust in Niue.
The latest filed accounts in the Irish Companies Registration Office for Intertrade said it had accumulated losses of €100 at the end of November 2014, and was controlled by Piccinin. The company’s shares were held by Pegasus Nominees, with an address in the Seychelles, and its latest annual return is signed by Paul McKenna on behalf of Pegasus Secretaries, also owned by Pegasus Nominees. McKenna is business manager of Pegasus Trust.
The latest sales promotion agreement contained in the MF files is from June 2010 and refers to rail and airport projects in the Philippines. The global email traffic in the files continues up to the start of 2015, when Houriet appeared to be winding down her involvement, and Piccinin was telling Botanic Avenue he was considering closing down Intertrade and rebuilding the operation “under a different set-up.”