SYDNEY BRIBERY CASE

Evening Star, Issue 20060, 28 December 1928, Page 5

SYDNEY BRIBERY CASE

THOUSAND FOUNDS FINE BABCOCK AND WILCOX TO PAY REFUND OF £10,600, ORDERED. The hearing of the charge under tho Secret Commissions Act against Babcock and Wilcox, Ltd., in connection with a Sydney City Council contract, was 'heard before Mr Oates, C.S.AI. The charge was that Babcock and Wilcox, “did corruptly give to Silas Maling, then being an agent of the Municipal Council of Sydney, the sum of £10,600 as a reward for having recommended the council to accept an offer made by Babcock and Wilcox, Limited, in connection with a steamraising plant for Bunnerung power station.” Arthur James Arnot, general manager for Babcock and Wilcox, Lid., said that bis company bad been tendering successfully for municipal contracts for many years. The late Sir James Kemncl was managing director of the company in London in 1926-27. Sir James was previously known as James Rosenthal, but changed bis name to Kemncl, and was afterwards knighted. Witness said be used to communicate on intimate questions regarding the company with Sir James Kemncl. Alter the 'Bunnerong tender had gone in witness had frequent discussions with Maling. Ho was informed by Maling that bis company’s tender would be accepted if £7.SUL) were paid by the company. Maling said that £5,000 of that sum was for the “gang” and £2,500 for himself. 'THE DEMAND FOR. £IO,OOO. “.1 pointed out,” said witness, “ that wo had the lowest tender, and the contract was ours by right, and if wo bad to pay anything, it amounted to blackmail. Maling said be could not help that. I did not agree, to pay the money then, nor did I refuse to pay it.” “ Later,” said Arnot. “ I received a communication from Alderman Holdsworlb, who telephoned me, and also a mps-''T‘ : to visit bis flat. When I got there Maling told .me that the International Combustion Company bad offered £15,001) to get the'contract, and that my company would have to pay £IO,OOO if wc wished to secure the order. He said that the £15,000 was in the hands of a third party. “ I protested and told Mating that it was nothing less than blackmail. He said be was sorry but could not help it. The ‘gang’ be said, bad held a, meeting and was not prepared to accept our tender unless wc paid £IO.OOO. I believe that Mating said be wanted £2,000 or £2.500 for himself. Eventually I said that I would recommend to my managing director or directors' to pay the blackmail. “1 told Maling,” s ‘d wilnc: s, “ that Alderman Moldswortb bad demanded £I,OOO, and Maling told me that I was not to pay Hnldsworth anything, as bo would get bis 'share with the rest of the ‘gang.’” L UTTER TO MAX AC INC DIRECTOR. A week or two after the signing of the contract tor the tender, witness said, ho saw Maling and told him that he himself would have nothing to do with the payment, and that Maling would have to nominate some one to reroive the money “ I told Maling,” said witness, “ that I would pass the name on to the managing director of the company, and let him pay it. Three weeks later I saw Maling, and ho said be had a man who would receive the money on bis behalf. He said the man’s name was Frank Buckle. Maling told me that flection upon it. He wrote that be bad Buckle would want £6OO for bis expenses, and I agreed to pay that extra sum.” Witness said that in bis letter to Sir Janies Kemncl be mentioned the history of the affairs connected with the contract, and said that if the company did not get the order it would be a reflection upon it. He wrote at be bad made every 'l'ort to get the business without blackmail, but made it clear that be personally would have, nothing to do with the payment of the bribe. This, ho said, could be paid into tbo account of Buckle at tbo ITS. and A. Bank. Arthur Herbert Albert, a diver, was sworn, and the evidence ho had given at Maling’s trial was read over to him and affirmed by him. “ THUMBSCREWS APPLIED.” Mr Mitchell, K.C., who appeared for the defendants, contended that no offence in law bad been proved against the company. Alternately, if it was bold that an offence, had been committed, he would ask that, section 11 of the Act bo applied and the information dismissed. It was clear that the money was extorted' .under pressure and was obtained by organised blackmail. Whatever may navo been done to redeem A mot’s promise to pay the money bad been done from London, apparently without the consent ot tbo board of' directors, and therefore the company bad not in law committed an offence in this State. If, however, the company had done anything corrupt in a highly technical sense, it was not corruption under the popular acceptation of the term. “ It was a matter of common knowledge,” said Mr Mitchell, “ that if a tenderer for City Council contracts was honest it was utterly impossible for him to do business with the council. The present case was an instance of the thumbscrews being applied, to Arnot, who, anxious to secure the contract, bad such mbed to tbo blackmailing demands made upon him.” A THOUSAND POUNDS’ FINE. Mr Sliand, K.G., who appeared for tbo Crown, said tbo matter could not bo glossed over as a trifling or technical offence, as bad been suggested. Jn fact, be could not conceive a worse case, of bribery, and owing to the difficulty in establishing the guilt of persons in such cases be considered that the punishment should be such that it would be a strong deterrent. He, suggested that the penalty in the case of a conviction be that the company bo ordered to refund to the City Council £10,600, the amount of the bribe. Tbo court, he said, was permitted by tbo Act to make such an order, and also had the power to deal with Arnot. its general manager, as well as impose a fine on the defendants. The magistrate, Mr Gates, in finding the defendant company guilty, said bo should have thought that a company with a world-wide reputation such as Babcock and Wilcox, Limited, would never have been associated with such an offence. Only the maximum penalty would be fitting in the circumstances. He' fined defendants £I,OOO and ordered them to pay to the City Council within six months £10,600, the amount of the bribe, which be found the company had paid to secure a contract from the council. Mr Mitchell announced that there probably would be an appeal.