The foreign bribery case involving Haiti’s state-owned telecommunications company, a long-running drama that has already sent several South Florida businessmen and former Haitian officials to prison, may have still more ugly secrets to give up.
A recent securities filing by a telecommunications company called IDT Corporation — a New Jersey company that is central to the intrigue – reminds us that the Justice Department and Securities and Exchange Commission probes are “still ongoing.”
We therefore thought now would be a good time to recap for our readers the origin and history of the probe of foreign bribery at Telecommunications d’Haiti S.A.M., known as Haiti Teleco.
The trail winds from the politically connected IDT Corporation to former Haitian president Jean-Bertrand Aristide, with a suspected assassination along the way.
Fired employee alleges bribes
The story begins in 2004, when a former IDT employee, D. Michael Jewett alleged in a lawsuit that the company had made improper payments to then-Haitian president Aristide in connection with receiving a below-market telecommunications contract. In April 2004 Jewett sent a complaint against the company to the U.S. Attorney’s office in New Jersey.
The suit claimed that Jewett was fired for objecting to alleged bribes to Aristide to be funneled through a shell company called Mount Salem Management in an arrangement between the companies and Telecommunications d’Haiti S.A.M.
Mout Salem was by a Turks and Caicos law firm that has denied to journalist Lucy Komisar, who has dogged the story for years, that the shell company was a front for Aristide. Komisar found sealed testimony from Jewett that had somehow gotten posted on Pacer, the federal courts database of cases, and wrote a full account of it here.
U.S. firm gets sweetheart deal
IDT was well connected politically — to put it mildly. Its chief at the time was Jim Courter, former Republican member of Congress from the Garden State. Other prominent Republicans were once found in the ranks of IDT executives and board members. They included former Minnesota Sen. Rudy Boschwitz; Jack Kemp, the former congressman from New York and one-time GOP presidential candidate; former Sen. Slade Gorton of Washington state; and Jeane Kirkpatrick, the former U.N. ambassador in the Reagan administration.
And, as Komisar noted, the U.S. Attorney in New Jersey at the time of Jewett’s complaint was Chris Christie, whose office declined to pursue a case against IDT after receiving the complaint in 2004. Christie’s successful gubernatorial campaign in 2009 benefited from contributions by people linked to IDT, Komisar reported. She also reported that a high IDT official once met personally with Aristide to discuss business in Haiti.
To be sure, as Komisar noted, a telecom dominated by Democrats, Fusion Telecommunications of New York, also benefited from “some suspicious below-market deals with Teleco from 1997 to 2004.” Fusion was run by Marvin Rosen, former Democratic Party finance chief, Joseph P. Kennedy II, and other prominent party figures. But Komisar speculated that IDT and people associated with it are more inviting targets for the DOJ.
The Federal Communications Commission in 2008 found the IDT had violated the Communications Act of 1934 by “willfully and repeatedly” failing to file a copy of its contract with Haiti Teleco with the federal agency.
The full regulatory story is complicated, involving rules regarding foreign state telecom monopolies, and if you wish to know the details, the FCC document is here.
But for our purposes, the relevant information is that IDT was able to negotiate much lower rates for handling U.S.-Haiti phone and wireless calls than other carriers, such at AT&T. The suspicion is that because IDT didn’t have to pay Haiti Teleco as much money to handle those calls as other U.S. carriers, it was kicking back some of its windfall profits to Aristide and other officials who may have facilitated the sweetheart deal.
Cooperator’s father gunned down
The Haiti Teleco case has seen 12 individuals charged under the Foreign Corrupt Practices Act so far. It has blighted lives and careers. It has given rise to important legal questions.
And, as we mentioned at the beginning, it has even been marked by a suspected assassination.
On March 6, Venel Joseph, the former governor of Haiti’s Central Bank during the administration of Aristide, was shot to death in Port-au-Prince by two gunmen on motorcycles while in a vehicle with another man. Joseph was the father of Patrick Joseph, former head of Haiti Teleco, who pleaded guilty in February to a money-laundering conspiracy charge and agreed to cooperate with the Department of Justice in the investigation of former Haiti Teleco officials and Miami-based companies.
Joseph pleaded guilty in February and agreed to cooperate with prosecutors.
One does not have to be a conspiracy buff to imagine dark forces at work. Venel Joseph was slain two days after The Herald reported that his son was ready to testify about sharing millions of dollars in bribes with Aristide and other senior Haitian officials.
“Regardless of who is responsible for this tragedy, a message has been sent,” Miami attorney David Weinstein, former chief of the narcotics section in the Miami U.S. Attorney’s office, told The Miami Herald.
The “message,” intended or not, was delivered as Jean Rene Duperval, a former high official for Haiti Teleco, was on trial in Miami federal court on charges he took about $500,000 in bribes from two Miami businesses in exchange for the alleged sweetheart long-distance phone contracts with Haiti Teleco. Duperval, the first foreign official to go to trial on FCPA charges, was convicted on March 12 and sentenced to nine years in prison. He is appealing his sentence, as Just Anti-Corruption reported, and his lawyer still insists that the charges against him were unjust.
So, the assassination of Venel Joseph did not help Duperval. But was it meant to help Aristide — who was ousted by a military coup in 2004 and then spent years in exile before returning to Haiti last year — by persuading Patrick Joseph to suffer memory lapses about his dealings with the former president? People familiar with the case have told The Herald that Patrick Joseph is a crucial witnesses in the still-unfolding investigation of Aristide, a former Catholic priest whose 2004 ouster was speeded by suspicions he’d abandoned his vow of poverty along with his clerical garb.
The ‘ongoing’ probe
Meanwhile, two Miami businessmen convicted in the Haiti Teleco mess, and sentenced to terms of 15 years and seven years in prison, are appealing to the U.S. Court of Appeals for the 11th Circuit, as Justice Anti-Corruption reported. Thus, the 11th Circuit becomes the first appellate court to rule on the critical question of who should be defined as a “foreign official” under the FCPA. (Jurors had expressed confusion over the definition, as we noted.)
Only insiders deeply familiar with the Haiti Teleco case can speculate intelligently about the prospects that the former president of Haiti will one day be in the dock. Or why no officials of IDT Corporation have been charged to date.
But there is no doubt that the DOJ is willing to use carrots as well as sticks to encourage cooperation from witnesses. Two years ago, ex-Haiti Teleco official Robert Antoine was sentenced to four years in prison after pleading guilty to a money-laundering conspiracy charge.
In April, the DOJ moved to cut his sentence in half, as Just Anti-Corruption noted. The reason? Antoine’s “substantial assistance” to law enforcement. Has the message been lost on others who may be sweating out the Haiti Teleco case?
Below is the text from IDT’s most recent SEC filing this month, which describes the DOJ/SEC investigation as “ongoing.” This language has been unchanged since last June:
On April 1, 2004, D. Michael Jewett, a former employee with whom the Company entered into a confidential settlement agreement in November 2010, sent a copy of the complaint he had filed against the Company to the United States Attorney’s Office. In the complaint, Jewett had alleged, among other things, that improper payments were made to foreign officials in connection with an IDT Telecom contract. As a result, the Department of Justice (“DOJ”), the SEC and the United States Attorney in Newark, New Jersey conducted an investigation of this matter. The Company and the Audit Committee of the Company’s Board of Directors initiated independent investigations, by outside counsel, regarding certain of the matters raised in the Jewett complaint and in these investigations. Neither the Company’s nor the Audit Committee’s investigations have found any evidence that the Company made any such improper payments to foreign officials. The Company continues to cooperate with these investigations, which the SEC and DOJ have confirmed are still ongoing.