Ex-Trafigura COO Perhaps Negligent But Not Criminal, His Lawyer Says

(Bloomberg) — Mike Wainwright, the former chief operating officer of Trafigura Group, may have been negligent but didn’t know the payments he was authorizing were bribes allegedly paid to secure lucrative Angolan oil and shipping contracts, his lawyer told a Swiss court. 

On the eighth day of the landmark bribery trial at the Swiss Federal Criminal Court in Bellinzona, lawyer Daniel Kinzer mounted his defense of Wainwright, a protégé of Trafigura’s late founder Claude Dauphin. During Wainwright’s almost three-decade career, the quietly spoken English accountant was one of the company’s most powerful figures.

The trial has shone a light on how Trafigura used companies set up by former employees as intermediaries, with prosecutors alleging that an Angolan official was bribed in return for lucrative contracts. Kinzer said while Wainwright authorized a payment to a shell company called Wyland — set up by the Angolan official Paulo Gouveia Junior — that didn’t mean he knew it was a bribe.

“I concede that at most perhaps Mr. Wainwright was negligent for that payment to Wyland” made by others, Kinzer said. “But no one could ever point to him knowing of and being willing to pay that bribe.”

Swiss prosecutors have alleged that Gouveia Junior received more than $5 million in payments and cash gifts.

Kinzer also sought to dismiss the prosecutors’ case that Wainwright was criminally negligent and should have acted to stop what he must have known were bribes — what’s known in Swiss law as commission by omission. Kinzer referred to Mariano Ferraz, the former Trafigura executive whose testimony underpins the Swiss indictment.

“Imagine if Mike Wainwright had asked Mariano Ferraz, what are these payments for?” said Kinzer “Do you think Mariano Ferraz would have responded ‘oh, these are for bribes.”

Trafigura says the evidence from Ferraz is deeply compromised as it was given in exchange for a reduced sentence in a separate criminal case in Brazil. The court last week rejected a request by Trafigura to have the testimony from the convicted Ferraz thrown out.

On Tuesday, Gouveia Junior’s lawyer said the Angolan official was a tool of Ferraz’s bribery scheme.

Trafigura has rejected the charges and said that its compliance programs at the time were robust. 

Wainwright also reject the charges. Under Swiss law, all defendants are considered innocent until a final judgment has been rendered.

The behavior of commodity traders has been in the crosshairs of global prosecutors for several years, but this month marks the first time that senior leadership of a major commodity trading house stands trial for bribery and corruption. Switzerland is home to many of the world’s biggest traders of oil, gas, metals and grains.

Lawyers for Trafigura began their defense shortly before midday on Wednesday. 

Prosecutors are targeting Trafigura through a clause in the Swiss Criminal Code introduced in 2003 that allows them to indict a company if it didn’t take reasonable steps to prevent acts such as bribery or money laundering.

(Adds detail on handling of Wyland payment in fourth paragraph)

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