U.S. authorities are investigating whether payments by weapons maker Raytheon Technologies Corp (RTX.N) to a consultant for the Qatar Armed Forces may have been bribes intended for a member of the country's ruling royal family, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.
Raytheon Technologies Corporation is an American multinational aerospace and defense conglomerate headquartered in Waltham, Massachusetts.
According to the report, Raytheon paid Qatari military consultants about 7 million Qatari riyals ($ 1.9 million worth) in a veiled scheme intended for the royal family.
That's what a dual U.S.-UK national named Tarek Fouad alleges, according to the Wall Street Journal, after a March 2015 contract "to advise on the acquisition of an advanced command-and-control system, dubbed the Falcon Project," eventually collapsed about two years later.
Fouad was one of three directors at the Doha-based consulting firm, Digital Soula Systems, which was formed in 2013, and is majority-owned by a brother of Qatar's emir, Sheikh Joaan bin Hamad bin Khalifa Al Thani; another co-director alongside Fouad was an active duty lieutenant colonel in the Qatari armed forces.
The alleged bribes were intended for Sheikh Joaan, according to Fouad, in what his legal complaint described as an "apparent effort" to influence Qatar's acquisition of the defense systems.
According to Fouad, Raytheon paid DSS what was "supposed to be compensation for defense studies that Digital Soula Systems would produce for Raytheon...But metadata extracted from digital files of the studies appear to show that Raytheon itself had created them."
Fouad alleged that Raytheon, between 2014 and 2016, directed a series of payments into bank accounts associated with DSS. Bank statements included in his lawsuit show several such payments from Raytheon in 2014, the former director alleged.
Payments such as those alleged in Fouad's lawsuit would have posed a serious [Foreign Corrupt Practices Act] risk for Raytheon, according to lawyers who reviewed the bribery allegations and documents from his lawsuit.
Fouad's lawsuit was dismissed in a U.S. district court last year; but the case has reportedly "led to inquiries by the U.S. Securities and Exchange Commission and the U.S. Justice Department."
Corruption in Qatar's Defense Sector
Qatar was ranked 30th out of 180 countries on Transparency International's 2020 corruption perceptions index, making it the second best performer among Arab states after the United Arab Emirates. However, Qatar faces critical corruption risk across its defense institutions, with almost no transparency or oversight in operations, finances and procurement.
Transparency International, a German registered voluntary association, released a report in 2015 on Qatar's Government Defence Anti-Corruption Index (GI). It said: "Qatar's overall GI ranking in Band F places it in the highest risk category for corruption in the defense and security sector."
It further stated, "Qatar has no defined process for acquisition planning â the process through which the state identifies what arms it will buy âall Qatari military procurement is exempted from public tender and most contracts are single-sourced."