Australian former executive returns from French ‘castle’ to quarantine and a criminal investigation

As New Year's Eve approached, the millionaire owner of a French castle flew into Sydney with his wife and prepared to quarantine for two weeks in an airport hotel. As he headed to the Meriton, it's likely that David Savage was a worried man.

The balding former corporate high-flyer has a taste for luxury – his French estate was once the home of the grandson of the King of Spain. But his main concern was probably not the stuffy confines of hotel quarantine. As he passed through airport customs, Mr Savage had triggered an alert set up to identify police persons of interest.

The reason the federal police were circling Mr Savage dated back years before he acquired Chateau de Jalesnes – the home he calls his "beautiful Renaissance castle" – to his time helping run one of Australia's largest and best-known companies, infrastructure giant Leighton Holdings.

Château de Jalesnes in the Loire Valley, France, now owned by David Savage and run as a wedding venue.

Mr Savage had made his career and fortune with Leighton (now named CIMIC), becoming one of the firm’s most influential executives as well as consigliere to its veteran chief executive, Wal King. Both Mr Savage and Mr King left the firm in 2011.

Company records reveal Mr Savage collected $18 million from Leighton between 2007 and 2011 as the firm won many of Australia’s largest infrastructure projects while aggressively expanding into Asia and the Middle East.

But court filings obtained by The Age and The Sydney Morning Herald reveal the Australian Federal Police suspect Mr Savage's time with Leighton was not the success story it once seemed. Rather, police suggest that while he was chief operating officer, Mr Savage helped conceal and alter company documents that threatened to reveal Leighton's corruption.

It was Leighton’s ambitious dealings to secure a nation-building infrastructure project in Iraq that initially triggered the AFP interest in Mr Savage.

Former Leighton chief operating officer David Savage.

The court documents were filed by the AFP in the Brisbane Magistrates Court in November after Mr Savage’s subordinate, former Leighton executive Russell Waugh, was charged with bribery over Leighton's Iraq dealings. The court filings allege that Mr Waugh was part of a conspiracy to pay multimillion-dollar bribes to Iraqi senior officials in 2010 to secure a $2 billion contract to build an oil pipeline.

The launching of the case against Mr Waugh in November was a historic action for the AFP, the culmination of the most exhaustive and important corporate bribery probe in the agency’s history. Yet the case against Mr Waugh also tells a story about Mr Savage.

The files reveal Mr Savage is suspected by the AFP of having engaged in criminal behaviour in late 2010, months before he departed Leighton with a $2 million bonus and made plans to buy his ostentatious French estate.

After serving search warrants on Leighton, detectives discovered several suspicious emails between Mr Savage and Mr Waugh. In one of them, Mr Savage instructed Mr Waugh to “amend” an Iraq project PowerPoint that was to be presented to Mr King, the CEO, and his fellow Leighton Holdings directors in October 2010. According to the AFP allegations, the amendment was sought by Mr Savage to hide a $48.5 million payment that detectives claim was partly a slush fund to pay bribes.

“Obviously, we need everything in the ‘right’ place,” Mr Savage allegedly emailed to Mr Waugh of the need to ensure certain large payments that might raise board suspicions were “buried”.

After the document was altered to conceal the suspicious payments, Mr Savage allegedly emailed the amended version to Mr King, along with a request to provide “copies for the board”.

The court documents also reference a file note made by another Leighton executive in November 2010 and which records Mr Savage allegedly admitting that he knew Leighton was planning to fraudulently inflate a contract with a Monaco consulting firm called Unaoil in order to win the Iraq project.

The court files allege Mr Savage claimed in a 2010 conversation that Mr King also knew of this inflated contract. The Age and Herald do not suggest that Mr King knew of any misconduct, only that Mr Savage’s alleged claims about Mr King are included in the AFP case against Mr Waugh.

The police court files also contain stunning admissions of bribery from the flamboyant owners of the Monaco firm Unaoil, the Ahsani family.

The men behind Unaoil: brothers Saman and Cyrus Ahsani and their father, Ata.

The Ahsanis were Monaco millionaires and members of the global elite who rubbed shoulders with princes, sheikhs and the cream of European and American society. The family’s charities supported children and the arts, and Ahsani family members sat on the boards of NGOs with former politicians and billionaires. Leaked emails obtained by The Age and Herald in 2015, which helped the AFP bring its case against Mr Waugh and also led to the Ahsanis being charged by the FBI, showed they had cash, shares and property worth €190 million ($302 million).

David Savage and his wife, Jenny.

They also showed how the multimillion-dollar fees Unaoil took from its clients were funnelled into an industrial-scale global bribery operation which further entrenched corruption among the powerful few.

In his statement to the AFP that forms part of the case against Mr Waugh, Unaoil owner Cyrus Ahsani alleges that his company “regularly won contracts and other work as a result of bribery” and that Unaoil had “systems in place to get access to confidential and sensitive information” from Iraqi officials “to the benefit of Leighton”.

The court filings fall short of any direct allegation that Mr Savage directed a bribery conspiracy. Rather, they allege that Mr Savage provided false information to Leighton’s board in order to disguise the bribery plot led by Mr Waugh. Such conduct, while not as serious as Mr Waugh’s alleged bribery, is still a corporate offence. If proven, Mr Savage could face time in prison.

If Mr Savage does face Corporations Act charges, as indicated by the court filings against Mr Waugh, prosecutors may request the Ahsanis also testify in Mr Savage's case. Corruption expert Howard Whitton, who has followed the Leighton saga for a decade, said police were likely to also be pursuing a deal with Mr Savage to testify against other suspects in the long-running corruption scandal.

Mr Whitton urged the AFP to keep investigating corruption, amid fears the agency would baulk at taking on similar cases given the time and money needed to combat alleged bribery.

“Australia is still failing to tackle bribery and corruption. The OECD slammed us 12 years ago for having so few corporate bribery prosecutions and despite the successes in this case, far too few matters are being investigated and prosecuted. Without more anti-corruption efforts in Australia, we risk going down the path of India or Indonesia where everything is for sale, including governments.”

Mr Savage did not respond to efforts to contact him.

At least one other former Leighton executive now based overseas, Peter Cox, is also wanted by the AFP over the bribery allegations.

According to official sources, American authorities working with the AFP are also seeking to take action against CIMIC (as Leighton was renamed after the corruption scandal broke) that could result in fines worth hundreds of millions of dollars.

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