By Morara Kebaso
Bribes to former Kenyan government officials could hold the expected merger between the British American Tobacco and and US-based tobacco manufacturer, Reynolds American (RAI) if a petition by a non- governmental organisation advocating for tobacco-free kids succeeds.
Even before the dust settles on a scandal rocking one of Britain’s biggest corporate firms, the Campaign for Tobacco-Free Kids is calling on the US Federal Trade Commission (FTC) to oppose a proposed merger between BAT and RAI until allegations of corrupt and anti-competitive conduct by BAT in Africa Kenya included are fully investigated.
In a letter to the FTC, Tobacco-Free Kids detailed allegations made during 2014-2015 by four BAT insiders – two former BAT employees and two former insiders working on behalf of BAT in South Africa – that included bribery of government officials and corporate espionage against competitors in Africa.
The allegations are reportedly supported by leaked documents, secret recordings and court documents.
“We urge the FTC to oppose the proposed merger until such allegations have been fully investigated and full consideration given to any results from those inquiries in evaluating the legality of BAT’s proposed merger with RAI,” the letter to the FTC’s Acting chairwoman, Maurenn Ohlhausen dated February 2, 2017.
Tobacco-Free Kids also asked the Commission to publicly release any findings by BAT’s external investigations to U.S. Consumers.
In December 2015, Paul Hopkins, who worked for BAT-Kenya for 13 years claimed in leaked documents that, top-ranking Kenya Revenue Authority (KRA) officials received hefty bribes from cigarette maker British American Tobacco to spy on a rival firm, documents used in an international media exposé of the corporate scandal.
Hopkins further says, the kickbacks were paid to the KRA officials to hand over tax files belonging to rival Mastermind Tobacco — maker of the Supermatch cigarettes — to the London-based company.
The KRA officials are also said to have pocketed huge bribes from BAT to make numerous tax demands from Mastermind, a strategy whose aim Hopkins says was to intimidate and damage the reputation of the homegrown Kenyan firm.
“We paid the KRA guy, the right KRA guy a shed load of money. He issued all the tax demands. I mean we have tax demands now,” Hopkins added in a leaked recorded telephone conversation with a former workmate.
The KRA denied the claims and asked those with evidence of any wrongdoing by its officers to present such information to the anti-graft agency for investigation.
In the same year, the leaked expose also claimed that top Kenyan political figures were used by BAT to prevent a rival company supplying Kenya with technology to combat cigarette smuggling in return for the donations, paid in cash via middle men.
In the latest happenings, the Campaign for Tobacco-Free Kids says it is alarming that a company that may have acted with blatant disregard for the law outside U.S. borders may be entering the American market as the largest tobacco company in the world.
On January 17, BAT reached a $49 billion (Sh4.9 trillion) deal to take over the share of RAI it did not already own. If approved, the deal would create the world’s largest publicly traded tobacco company and give BAT full ownership of a U.S. tobacco company for the first time since 2004.
In addition to urging the FTC to consider the recent allegations of foreign corrupt anti-competitive conduct by BAT, Tobacco-Free Kids also called on the FTC to closely scrutinize the proposed merger “because of the leading role played by both BAT and RAI in perpetrating the decades-long conspiracy that has made tobacco the leading preventable cause of death in the United States.”
A lengthy attachment to the letter summarizes additional domestic and foreign misconduct by these companies, including findings by a U.S. federal court of their unlawful conspiracy with other U.S. tobacco companies to defraud the American people about their deadly products.
Tobacco use claims nearly 500,000 American lives every year. Smoking kills more Americans than alcohol, AIDS, car accidents, illegal drugs, murders and suicides combined.