A Princess, a Poisoning and an Oil Fortune The Bizarre Corruption Scandal at Bilfinger

Bilfinger has long been plagued by accusations of corruption.
DPA

Bilfinger has long been plagued by accusations of corruption.

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Part 2: Why the Princess Was Poisoned


Livschitz had had enough. Hardly any progress was being made and he extended the monitoring program by two years, a clear message to the company which seemed only to be counting the days until it could rid itself of its American overseer. Once again, Bilfinger needed to make a statement that it was serious about combatting corruption. And in April 2016, a woman who seemed to fit that bill had her first day at work: Marie-Alix von Meiningen.

Originally from Switzerland, Meiningen had spent nine years in the pharmaceuticals sector, the first six in the legal department of Novartis before spending the next three at Hoffmann La Roche, where she was responsible for internal investigations. She is a woman not to be crossed and, beyond that, she is also a princess of Sachsen-Meiningen and a duchess of Saxony. Befitting a royal, she has the standard collection of names (Marie, Alexandra, Beatrice, Elisabeth).

Perhaps due to her attractive appearance, some men might be tempted to believe that she could be installed as a showroom prop making it look as though Bilfinger was finally clearing out the sleaze. In truth, though, they wanted nothing of the sort. She was apparently paid a salary of 173,000 euros per year to conduct internal investigations. Today, though, the company is demanding she pay 1.8 million euros in damages - because she apparently moved too fast, launched too many investigations and was too ruthless in pursuing the truth.

'I Want Results'

Meiningen has declined to speak with DER SPIEGEL. But according to court documents, when she started at Bilfinger, she and a colleague found themselves confronted with 80 unsolved cases. Bilfinger says it was 38. Shortly after she got going, she compared her job to a hospital emergency room. "She can only focus on the most pressing matters at this point," wrote Livschitz.

Still, in case Livschitz were to stumble across anything suspicious, Bilfinger had already retained an American law firm and the auditing company KPMG. They examined the books, looked through computer hard-drives and interviewed Bilfinger employees. But Meiningen wanted to go far beyond that: She wanted real investigators who could snoop around in countries like Nigeria, Libya, Russia and China. She didn't just want to investigate inside Bilfinger subsidiaries, but also on the other side - in places where suspected bribery payments may have ended up. It was a job that could become dangerous - and it wasn't for back-office types in their nice suits.

Private investigators, on the other hand, are perfect for such special operations. Often, they are former intelligence agents who have a network of informants they can rely on. The best-known company is Control Risks. Orbis Business Intelligence in London is another. At the time, Orbis was something of an insider tip, but today it is famous for the fact that its founder, Christopher Steele, wrote the dossier about the alleged links between U.S. President Donald Trump and Russia.

According to Bilfinger company rules, however, even sensitive expenses such as hiring external investigators had to make their way through company bureaucracy, including a public call for bids, which could take weeks. Such a procedure, of course, would have obviated the need for sensitive investigations in the first place. So in May 2016, Meiningen met with Axel Salzmann, the company's new CFO and interim CEO. Salzmann allegedly said something along the lines of: "Forget it. I want results!" The U.S. monitor, he added, was pressuring the company to finally clear everything up. Salzmann declined to respond to a request for comment from DER SPIEGEL.

Later, he drew up memos pertaining to most of the private investigator contracts. Whether he signed off on everyone and everything is a matter for the court. Notably, the company isn't going after Salzmann, who is likewise no longer with the company. Only the princess.

This too creates an impression that Bilfinger indignantly denies: Namely, that this isn't only about money and company regulations. That it could in fact be about Oman and about a deal that now needs to look totally unimpeachable because it represents the future of Bilfinger and its new CEO Tom Blades - a man who claims to be able to make clean deals even in dirty countries.

A tough, fit triathlete who shows up in the office every morning before 7:00 a.m., knows the Middle East well. He spent years working in the region for the American company Schlumberger in the oil industry, and then for Siemens' oil-and-gas division. At Bilfinger he declared that the Middle East would be the company's new growth market, joining the U.S. and Europe.

But if the Oman deal turns out to have been corrupt, this new strategy will be a non-starter.

PART V

Oman is a country full of sand, rocks and scorching heat - one of those sultanates where oil, not water, makes the desert bloom. It rains petrodollars. The money has changed the country: large airports, eight-lane highways and lots of Rolls Royce, Porsches and Bentleys on the streets. Otherwise nothing has changed there since nomads were herding their goats. The sultan is still all-powerful, the extended family is the network that holds everything together and business relationships still largely depend on the degree of kinship. First the family, then the tribe, then the state.

Oman scores 44 on the Corruption Perception Index. "There is no deal in Oman without, first, a side-deal," is how a local businessman explains the rules in an investigation report filed by Orbis. Another manager says: "You need to be partnered with people who have the ear of the royal family."

But compliance rules? If you talk to someone here about compliance rules, "they might raise their eyebrows and say: What are you doing that for?"

Tebodin & Partner is at home in this world. The company specializes in the maintenance of oil and natural gas facilities, and since 2012, Bilfinger has owned half of the Oman-based branch of the company, whose revenues and employee-numbers have shot upwards in recent years. Globally, Bilfinger's Tebodin has about 3,000 employees in 37 offices. There are 900 in Oman alone.

Is this because the company is so good at what it does and is so cost-effective that the state oil company PDO can't do anything but throw one contract after another its way? Or, rather, because the company slogan - "Always close" - is especially true of two men in particular: Basil Macki and Salim Al Kindy?

Kindy is the head of Tebodin's branch in Oman about whom a friend once said: "Salim knew how to get things done." That was particularly true when it came to the state-owned oil company PDO, where Kindy used to work himself. And then there is the Macki family, which is part of the "oil aristocracy," as they say in Oman - one of the most respected families, with a patron, Salim Macki, who also once held a senior job at PDO.

On Oct. 25, 2010, the Macki family company founded a 50-50 joint venture with Tebodin. Basil Macki signed on behalf of the Macki family while Kindy signed for Tebodin. Just two days later, this joint venture received one of PDO's biggest contracts, an exclusive maintenance contract for the northern oilfields.

A Not-So-Recent Verdict

Macky and Kindy have not responded to requests for comment from DER SPIEGEL.

It took a few weeks for the newly hired investigator in Mannheim to discover Oman. But in October 2016, Marie-Alix von Meiningen booked her plane ticket to the country. Just one day later, the U.S. monitor Livschitz likewise indicated that he intended to take a closer look at the company's operations in Oman. It was a delicate announcement: Oman is Tebodin's cash cow and Tom Blades, in need of a quick success, had taken the reins of Bilfinger in Germany.

That same October, the compliance department in Mannheim informed Meiningen that unfortunately a problem had cropped up in Oman. After taking a closer look at the Mackis' company - years after Bilfinger subsidiary Tebodin had formed a joint venture with it - the compliance officers determined that a court had sentenced Basil Macki to a two-year suspended sentence for bribery of PDO, the state company responsible for the large contract for the northern oilfield. The verdict wasn't recent. It had been handed down in 2014.

Bilfinger supposedly hadn't known about this for years. Or did Bilfinger prefer not to know about it? That, after all, is how things have worked since the Siemens scandal: A company founds a joint venture with a local partner, which makes it more difficult for German authorities to monitor and the German parent company's books remain clean.

An email sent by Basil Macki in 2012 is revealing. He wrote that he had just come back from his "rounds" at PDO. One of the managers had begged his joint venture to please stop sending so many presents to the PDO people, and that once a year was enough. "His opinion was that we are giving too many (gifts) and this could raise issues of ethics ... I told him that his predecessor had a different view."

Basil Macki pled guilty in court to regularly bribing a high-ranking PDO employee. In a country like Oman, such corruption was hardly a surprise. Indeed, the true surprise was the Macki had been convicted at all.

The country had seen unrest in 2011 and the Arab Spring had frightened the sultan into promising to address his country's corruption problem. The result was a great show of compliance, at least according to economic analysts. Starting in late 2013, the sultan had 30 managers charged for collecting bribes for years at PDO or, conversely, bribing people at PDO. Macki was one of them. After the verdicts came pardons: Today, Omani managers claim bribes are still being paid, just not as obviously.

Finding Kindy

But for Bilfinger, the news in fall 2016 that that the younger Macki had been convicted of bribery was a catastrophe: Would the trail lead to the enormous 2010 deal? And what would it mean for the contract extension with PDO on which Blades was currently working? And all of this was taking place in front of the monitor, who was on his way to Oman himself.

Macki, however, was only the second-largest problem. Kindy was worse. The head of Tebodin Oman had been missing since February 2016. Inside the company, it was claimed that he had gone on the Hajj, the pilgrimage to Mecca that every Muslim should complete once in their life. Since then, they said, he had disappeared.

It was a nice story, if only the monitor hadn't come up with the idea of going to Oman. Marie-Alix von Meiningen hired the private investigators from Orbis to look into the Macki issue and to find Kindy before the monitor himself learned more and accused the company of hiding things. In late October, Meiningen informed the new head of Bilfinger, Blades, and in early November, she flew to Oman, and again in December.

There, she discovered that Kindy wasn't actually on a pilgrimage. Almost everybody seemed to know he was in jail or under arrest for bribery involving PDO. He had been convicted in February 2016 before being pardoned by the sultan in November. He had been locked up following the failure of his appeal. After all, it was his second offense, Kindy having earned jail time back in 2014 as well. Still, he kept his job - even in 2016 when he didn't show up to work for months because he was serving his sentence. It wasn't until October 2016 that Bilfinger fired the corrupt manager, just as the monitor was on his way to Oman.

Today Bilfinger says those two things are not connected. The Bilfinger version: Headquarters in Mannheim unfortunately only heard in October of 2016 that Kindy had been charged with corruption and that he was fired immediately. How, though, could Bilfinger not have realized was what going on in Oman, given its importance to the company? Did it simply ignore the situation so as not to have to say anything to the monitor? The company denies this, and also denies that it was trying to avoid putting its next Oman deal at risk. Why then, almost two years later, has the company not filed any kind of legal complaint against Kindy? Bilfinger says it is still looking into the matter.

And what makes the company so sure that Kindy didn't also commit bribery to land the big contract from 2010? The company points to the fact that his conviction was for incidents of bribery in 2012 and 2013. And notes that by the time the contract was extended in 2017, Kindy was already gone.

The fact that the company's top manager in Oman was in prison wasn't the only cause for concern to Meiningen on this trip. She and the private investigators from Orbis had found indications of the existence of a slush fund at Tebodin Oman. They suspected that Tebodin was charging PDO for too many hours and then using the extra money to bribe PDO decision-makers in exchange for even more contracts for Tebodin. According to a company insider, a large maintenance contract in the southern oil field was likewise at stake.

Part VI

Meiningen came back from Oman having done what she had been hired to do: shed light, deliver the results of an investigation. That's what she thought. After all, the new leadership team surrounding Blades never tired of insisting that transparency was now paramount. In truth, however, the machinations behind the Meiningen's back had already begun: She was suddenly no longer wanted.

On December 2, according to the court records, Bilfinger hired Wiesbaden-based lawyer Alfred Dierlamm to undertake "Project Brunnen," which was to take a close look at everything that Meiningen had done. Allegedly, there were two whistleblowers who had spoken out against her. Dierlamm had her office and computers searched and rummaged through her personnel file. Meiningen knew nothing about it.

On Dec. 14, 2016, CEO Blades discovered what she had unearthed in Abu Dhabi and Oman: indications of corruption. Shortly thereafter, she was subordinated to General Counsel Olaf Schneider, who had maligned her weeks earlier as being incompetent. Schneider denies this. Meanwhile, Dierlamm began looking through her travel expenses.

When the new year began, Meiningen seemed to figure out what was going on. She told colleagues that she had allegedly been warned from outside that she was in the center of a conspiracy. The core of the company's new business strategy was to be gas and oil, which is where Bilfinger intended to invest, it was said. As such, other business divisions were to be sold off. But if corruption was discovered in Nigeria and elsewhere, then these branches couldn't be sold. And if it was found in Oman, it would kill the cash cow. Meiningen was putting everything in danger. She told colleagues that she had been told that what was being done to her was "a total double-cross, but you are the scapegoat."

Today, Bilfinger says there is nothing to this. No intrigue. Nobody tried to impede her, to silence her. They claim the monitor had been informed about all cases anyway, including those in Oman.

On Jan. 20, 2017, Meiningen sat down with Dierlamm after he had finally summoned her to interrogate her. In his report, he would later accuse her of having given contracts to detectives without following company rules. He also claimed her private investigators abroad had obtained highly confidential information. He said that bribes must have been involved to get civil servants to talk, but he had no proof. Orbis and other private detective agencies involved deny that bribes were paid. He also claimed that the investigators had gone too far in Oman and elsewhere and had overstepped their mandate - by interviewing former employees of Tebodin and the state-owned PDO. Dierlamm claimed that, by allowing all of this to happen, Meiningen had violated her duty to the company.

Two days later, Meiningen flew to the Persian Gulf to continue her investigation. She landed in Abu Dhabi, intending to continue on to Oman. But that trip almost became her last. Meiningen held meetings in Abu Dhabi, asked around about Kindy and planned her trip to Oman to find out more about the alleged slush fund used to secure a deal for the southern oil field. At some point, someone offered her a cup of tea.

Part VII

In November 2017, the labor court in Mannheim ruled that Bilfinger's termination of Meiningen was legally void. It was merely the first ruling in the case of Marie-Alix von Meiningen vs. Bilfinger and the court came to the conclusion that whatever Meiningen may have done wrong, a warning would have sufficed.

Meiningen admitted that, given how fast she had been required to work, she hadn't always paid attention to the formalities. But she insisted that she hadn't pocketed any of the fees for the private investigation agencies nor had she handed out contracts to friends, as Bilfinger had accused her of doing. Orbis and others had likewise assured her they never obtained information via dirty methods.

The court agreed, ruling that Meiningen "had not acted unlawfully." If even Dierlamm only spoke of having "initial suspicions" of a breach of trust in his 158-page report, the court found, then it was clear that little evidence had been found. And the alleged illegal methods used by the private investigators? "mere conjecture," said the court.

Bilfinger could easily have put the matter to rest at this point and offered Meiningen a settlement with a confidentiality clause. That's what companies do when their odds in a trial are looking bad and delicate internal issues are at stake. So why are Marie-Alix von Meiningen and Bilfinger once again appearing in the labor court in Mannheim on Thursday?

Bilfinger doesn't just want to follow through on the termination, it wants up to 1.8 million euros from Meiningen - the sum total of the money she paid to the private investigation agencies, which, the company claims, were far too expensive. And they want the 157,000 euros charged by Dierlamm. Meininger, in other words, is to pay for the report the company commissioned to put her under pressure.

So why are they doing this? Confidentiality clauses become invalid when public prosecutors are conducting an investigation. And Meiningen knows too much. Is it about making her seem untrustworthy? The "new Bilfinger" wants a new, squeaky clean image. It congratulates itself for its new "first-class compliance system" and highlights the fact that it has had "no systematic compliance violations since 2016." That it looks thoroughly into each violation. Things are different, they claim, the internal warning system now works. And in December, the company is certain, the monitor will issue a positive report and finally leave.

But what if Meiningen interferes with this image, or even destroys it? What if a German state prosecutor puts her on the stand, or a U.S. investigator? Then she would need to talk. And she would tell a story about suspected bribery and about how the new Bilfinger leadership dealt with it. Were that to happen, a conviction against Meiningen from the Mannheim labor court for breach of trust would be quite useful. It would help make Meiningen look like a woman who could not be believed. It would make her story look as though it had been invented. Even though, as far as can be determined, it appears to be true.

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