Eurest Support Services - U.N. Corruption

U.N. Corruption

News reports in 2005 described a multi-million dollar contract to provide food to U.N. peacekeepers in West Africa awarded to ESS days after Andy Seiwert, a senior executive at ESS, allegedly received confidential bid information. At the time U.N. officials estimated the total value of ESS food contracts with the United Nations in West Africa at $237 million, with renewals and add-ons that could reach $351 million.

Attached to the e-mail were commercially sensitive U.N. documents that no one outside of highly restricted circles within the U.N. was supposed to have access to; and that the contracts committee itself would not ponder for five more days.

• The first document was a draft of the official recommendation by the UN procurement department that a $62 million contract for U.N. peacekeepers in Liberia be awarded to Eurest Support Services.
• The second document was a detailed United Nations evaluation of the technical abilities of 12 different food supply firms to meet U.N. requirements for feeding separate UN peacekeeping missions.
• The third document was a detailed list of the price bids, that three of the five firms had submitted for the UN contract. The document showed that ESS had bested its nearest rival, a food services firm known as ES-KO, by literally pennies per ration unit, and had also underbid its competitors in virtually every other service category.

Such information is considered top-secret by the United Nations, and is submitted in a sealed-bid process that U.N. officials have touted as foolproof.

ESS's business development executive Andy Seiwert had a vital interest in it. Siewert was the ESS/Compass executive described by sources close to the U.N. as having the most frequent day-to-day contact with the scandal-plagued UN procurement department. That contact included frequent meetings with Alexander Yakovlev (UN procurement).

Alexander Yakovlev (UN procurement) pleaded guilty to charges of corruption, wire fraud and money-laundering. Vladimir Kuznetsov Head of the U.N. Committee for Administrative and Budgetary Issues was also arrested and indicted after taking nearly $1 million in bribes from the Compass Group.

Competitors ES-KO and Supreme Food Services AG initiated lawsuits claiming violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act, the Sherman Antitrust Act and New York State's Donnelly Act regulating free trade. Compass settled the claims and said that the total legal, professional and related costs associated with investigation, litigation and settlement was below £40 million although they did not admit legal liability. Federal investigations were announced to be underway and the case was referred to the Serious Fraud Office (UK).