Following an order from the Supreme Court of Pakistan to investigate corruption in the country, Pakistan’s branch of Transparency International requested that the U.S. Justice Department conduct an investigation of Oklahoma-based Walters Power International, LLC. The company is suspected of having paid bribes to officials in Pakistan to win contracts for building “rental power plants” in the country. The U.S. Foreign Corrupt Practices Act (FCPA) prohibits bribery of foreign offices to obtain or maintain business contracts in foreign countries. If proven true, the allegations against Walters Power International could violate of the FCPA.
In March, Pakistan’s supreme court ruled that the rental power plants are illegal. The court ordered that the National Accountability Bureau investigate all secretaries of water and power as well as all federal ministers since 2006, calling the rental power project a huge financial waste and accusing officials of being involved in corruption.
The rental power plant project was intended to help solve Pakistan’s serious problem with power outages. These smaller rental plants are quick to build and operate on short-term contracts. However, it appears that the rental power project has not been effective in solving Pakistan’s problem of routine blackouts.
Walters Power International and General Electric were two of the first companies to win rental power contracts. Walters Power International retained a 35% interest in the plant, and a 65% interest went to a Pakistani group. The contract called for two rental power plants to be built immediately and planned for a third plant to follow.
The company’s president, former Oklahoma Governor David Walters, has denied the bribery allegations, according to the Wall Street Journal. He claims that the rental power projects were absolutely legitimate and were approved by the entire federal cabinet of Pakistan. Moreover, Walters Power International has suffered a net loss on the projects, according to Gov. Walters, for which the company plans to file a claim for lack of payment and other damages with the London Internation Court of Arbitration. Gov. Walters promised cooperation with the FCPA investigation, however.
Waters & Kraus is a national firm with highly skilled lawyers practicing qui tam litigation in four offices, including Dallas, Los Angeles, San Francisco, and Baltimore. Our attorneys have decades of experience successfully representing whistleblowers in a variety of fraud cases. Contact us or call our attorneys at 800.226.9880 to learn more about our practice and how we can assist.