Ex-employee who claimed firing over opposition to Haiti bribery settles suit against IDT

Ex-employee who claimed firing over opposition to Haiti bribery settles suit against IDT Filed under Blog, Corporate Abuses, Crime & Corruption, Fraud, Haiti, offshore. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry By Lucy Komisar Jan 24, 2011 The lawsuit filed by a former employee against the Newark-based global telecom IDT is over. J. Michael Jewett, who was an IDT executive, claimed in 2004 that he was fired for opposing bribes to Haitian officials. Lawyers for both sides agreed to drop the complaint and counterclaims in an agreement filed with the U.S. District Court in Newark on January 13th. This has not been reported before now. IDT spokesman Bill Ulrey said, "We have no comment…as usual. Thank you." Jewett's attorney William Perniciaro also declined to discuss the matter. When both sides don't talk about an agreement to dismiss a case, that normally means a confidential settlement has been reached. Jewett, who was in charge of IDT's Caribbean business, sued the company in 2004, charging that he was fired because he would not go along with a plan to pay bribes to officials of the Aristide-era Haitian state phone company, Télécommunications d'Haïti (Teleco). The sweetheart deal reduced the fees IDT would pay Teleco to complete international calls. IDT's payments, including kickbacks Jewett said were destined for Aristide, were channeled through a Turks and Caicos shell company instead of being deposited in a Teleco account. The offshore Turks and Caicos practices bank and corporate secrecy which makes it easy for criminals to set up fake companies to hide and move illicit cash. Evidence that backed up Jewett's claims included a contract signed by IDT and Teleco that called for payments lower than the major U.S. telecoms were paying and for fees to be sent to the shell company. Jewett was blocked by federal Judge Stanley R. Chesler from finding out who owned the shadowy firm, called Mont Salem. After nearly seven years of delays allowed by the court, the case of Jewett v. IDT had been scheduled for trial Nov 9th, but was suddenly postponed by the judge, who claimed scheduling conflicts. He never set a new date. Alongside Jewett's civil case, the U.S. Justice Department and the Securities and Exchange Commission have been investigating IDT's alleged bribery under federal anti-corruption statutes. Jean René Duperval, a Teleco official who signed the agreement that diverted IDT payments to the Turks and Caicos, has been indicted by the U.S. for taking bribes from several Miami phone companies. He is scheduled to go on trial in Miami Feb 28th and could provide information on the IDT deal as part of a plea bargain. For more details on the IDT- Haiti Teleco story, see links to articles which I wrote over five years and post here with the most recent first. Click on the links for the full stories. IDT's imaginary "ethics letter" Sept 24, 2010 – Last Saturday, Barron's ran my story in which IDT CEO Howard Jonas admitted for the first time a suspect deal with then Haitian President Jean-Bertrand Aristide that involved sending payments due Haiti to a law firm in the Turks and Caicos. Jonas told me the company had gotten a lawyer's "ethics letter" clearing the deal. But he wouldn't provide it. A day before the story was to run, Barron's got a call from a lawyer of the firm representing IDT in a lawsuit by former IDT executive D. Michael Jewett, who says the company fired him for objecting to the offshore deal. He promised to provide the ethics letter. It was the end of day, Friday. The magazine noted that promise when it published the next day. Days later, the lawyer called to say he couldn't provide the letter because it was sealed. Hard to believe: there is no sealing order for the letter in the case docket. A Lingering Problem for IDT — CEO admits company official met with Aristide on contract Barron's, Sept 20, 2010 - Scoop summary – Howard Jonas, CEO of U.S. telecom IDT, in an interview with Lucy Komisar, acknowledges for the first time that then Haiti President Jean-Bertrand Aristide in 2003 met with an IDT official during discussions about a contract to pay Haiti Teleco for calls from U.S. customers. That contract included agreement for IDT to send payments to a shell company in the offshore Turks and Caicos Islands. Jonas said IDT got an "ethics letter" from a law firm clearing the deal, but the lawyer said in a memo filed with the court, published here for the first time, that he simply told IDT to do "due diligence." IDT signed the contract the next day. A former IDT official, who objected to the deal, was fired and is suing the company; trial is set for Nov 9th. The Justice Department and Securities and Exchange Commission are investigating violation of the Foreign Corrupt Practices Act. Jonas's revelations are likely to have a major impact in the trial and investigations. IDT's Voodoo Economics: Inside Justice Dept's probe of telecom bribes in Haiti The Big Money, March 11, 2010 – When the devastating earthquake hit Haiti in January, IDT, the New Jersey-based global phone company, moved fast to help. It announced it was setting up calling stations at hotels and other sites so Haitians could use its Internet calling-service to reach family and friends around the world. It cut rates on its U.S. prepaid calling-card to 2 cents a minute to Haiti (at least for 12 days), donated 4,000 $2-prepaid calling-cards to Haitian community groups in New York and Florida, and said it would give some proceeds from prepaid calls to Haitian Red Cross relief. Such a warm, fuzzy response from a U.S. corporation often wins plaudits, though, of course, IDT has a business interest in the impoverished island. In 2005, in its latest publicly available figures, the company reported $4 million in profits from $17 million in revenues for routing calls there. Former U.S. Attorney Chris Christie, GOP Candidate for NJ Governor, gets $ from IDT, NJ telcom investigated by Justice Dept for bribing Haitian officials Oct 22, 2009 – Back in 2004, when Chris Christie was the U.S. Attorney for New Jersey, his office first heard allegations that IDT Corporation, a Newark, N.J.-based global telecommunications company, was involved in a case of international bribery. No federal criminal case was ever brought against IDT, in contrast to several successful federal prosecutions in similar cases elsewhere. The company is run by James Courter, a former Republican congressman from New Jersey. Fast forward to the present, and Christie is now the Republican candidate for the governor of New Jersey. And, an examination of campaign finance records shows, Christie has thus far racked up $26,800 in campaign contributions – earning him a total of $80,400 including state matching funds — from 27 individuals who could have a direct interest in the IDT case. Courter to leave IDT; NYSE threatens delisting; stock in free fall Oct 6, 2008 – From alleged kickbacks to Aristide to a company that's tanking. Jim Courter, the former New Jersey Republican Congressman who quit as a McCain national finance co-chair after IDT, the global telecommunications company he heads, was fined $1.3 million by the Federal Communications Commission, now has much bigger problems. IDT announced Friday that Courter will quit the company. IDT's filing with the SEC the same day shows the company in a free fall. Its stock is tanking, and the New York Stock Exchange has threatened to delist it. The FCC fine imposed for IDT's failure to file its contract with Haiti was first reported by the author in July. The contract revealed that IDT was sending Haiti fees to a Turks & Caicos shell company instead of to a Haiti Teleco account. A whistleblower charged kickbacks. The company said Courter would leave as CEO when his contract expires next October. In the meantime, his 2009 salary will be paid entirely in stock, which he cannot cash in till his departure. That could mean paltry pickings. IDT stock has fallen to 69 cents from more than $24 in 2004 and $1.93 in June. IDT could be in for some more trouble with the FCC if a new administration decides to enforce its regulations. According to FCC responses to Freedom of Information Act requests, IDT has never filed its contracts with any of the 140 major international carriers to which it claims to supply service. This violation could bring fines of $7,000 a day for each case, but the agency has given the company a pass on obeying its rules. Palin's campaign operations chief was VP of IDT, telecom investigated for bribery Sept 2, 2008 – Michael Glassner, in charge of Republican Vice-Presidential candidate Sarah Palin's campaign operations, was till April 18th a vice-president of IDT, the New Jersey-based telecom fined $1.3 million by the FCC in July for failing to file its Haiti contract. The contract, effective in 2004, revealed payments to an offshore shell company in the Turks & Caicos which sent only part of the fees to Haiti's phone company. The case is under investigation by the Justice Department and the Securities and Exchange Commission. A former IDT insider, Michael Jewett, who managed the company's Caribbean region, says the missing money represented kickbacks to former Haiti President Jean-Bertrand Aristide. The smoking gun: the IDT-Haiti contract July 29, 2008 – Articles I wrote this month about the resignation of IDT CEO James Courter as John McCain's finance co-chair provoked supporters of former Haiti President Jean-Bertrand Aristide to noisy denials and personal attacks. I wrote that Courter had resigned after I reported that the Federal Communications Commission had fined IDT $1.3 million for failing to file its contract with Haiti. Why would IDT fail to file the contract? Maybe because it shows that in this Aristide-administration deal, payments were below the legal 23 cents a minute set by the FCC (money that would have gone to Haiti) and that IDT payments were ordered sent to a shell company account in the Turks & Caicos instead of to a government account in Haiti. Read the contract. Off the Trail: IDT chief quits McCain campaign Condé Nast Portfolio, July 15, 2008 – Jim Courter, one of Senator John McCain's top fundraisers, has resigned from the McCain campaign just days after Lucy Komisar reported on portfolio.com that Courter's company had been fined by regulators. The Federal Communications Commission last week levied a fine of $1.3 million against IDT, a New Jersey telecommunications company headed by Courter, for failing to disclose its 2003-04 long-distance phone agreements with Haiti. McCain 'Trailblazer' Burned Condé Nast Portfolio, July 11, 2008 – The FCC hits James Courter's IDT with a $1.3M fine for a cloudy deal in Haiti. IDT, the New Jersey telecommunications outfit run by one of John McCain's top fundraisers, Jim Courter, was fined $1.3 million by the Federal Communications Commission for failing to file a contract for telephone service to Haiti in 2004. Courter, a former New Jersey Republican congressman, is one of 20 McCain national finance co-chairs, and joined the campaign in February 2007. He's a "Trailblazer" for McCain, meaning he raised at least $100,000. The IDT PAC has contributed $84,850 in 2008. IDT's work with Haiti has been put under scrutiny since a former employee, Michael Jewett, then IDT's manager for the Caribbean, sued the company. His suit claims he was fired when he balked at negotiating a scheme that routed a portion of the company's long distance revenue from Haiti calls to a shell company, Mount Salem in the Turks & Caicos, which he was told was owned by then-president Jean-Bertrand Aristide. Exclusive: Sealed evidence in the IDT Haiti bribery case is revealed March 8, 2007 – Until now, IDT, the giant U.S. telecom accused of bribing former Haiti President Jean-Bertrand Aristide to get a lucrative phone contract, has managed to keep details of the case under wraps. That is because IDT lawyers succeeded in getting the U.S. District Court Judge, Mark Falk, to gag whistleblower D. Michael Jewett and seal his testimony. But somehow, three weeks ago — unaccountably in the face of Jewett's lawyer's unsuccessful attempts to unblock the court record — the statements of Jewett and of the top IDT officials were posted on Pacer, the US government court website. What interesting reading those documents make, especially Jewett's detailed account of what may happen in a major corporation when a lone employee stands up against corruption. US/Haiti: Top Republicans Leave Telecom Accused of Bribery Inter Press Service (IPS), Nov 6, 2006 – The company is under investigation by the SEC, the United States Attorney in Newark, New Jersey, and a U.S. federal grand jury for allegedly paying bribes to Jean-Bertrand Aristide, former president of Haiti. Five nationally prominent US Republicans, the independent board members of a corporation that has been charged with paying hundreds of thousands of dollars in bribes to get a sweetheart telecom deal in Haiti, are leaving its board. The company is IDT, the world's third-ranked international phone company. IDT is run by James Courter (shown here), a former New Jersey Republican congressman. The other Republicans are Rudy Boschwitz, former senator from Minnesota; James S. Gilmore III, former Virginia governor; Thomas Slade Gorton III, former senator from Washington State; Jack Kemp, former congressman from New York and 1996 vice presidential nominee; and Jeane Kirkpatrick, the former U.S. ambassador to the UN under President Ronald Reagan. US/Haiti: Govt Corruption Suit Stalls for Lack of Funds Inter Press Service (IPS), Oct 26, 2006 – The U.S. Justice Department is withholding agreement to share assets seized from Haitian drug traffickers to finance a lawsuit by the Haitian government charging former President Jean-Bertrand Aristide with taking bribes. The suit is based on allegations by a former executive of the telecom company IDT that before Aristide left the country in 2004, he took hundreds of thousands of dollars in kickbacks from IDT, which is connected to prominent U.S. Republicans. Justice Dept. Criminal Division chief wrote "lawyer's letter" clearing GOP ex-congressman's firm Sept 18, 2006 – Is top Justice official protecting a former client accused of bribery? The Justice Department's Criminal Division, headed by a Bush political appointee who gave legal advice to a company accused of bribing Haiti's former president, is blocking an agreement to share seized Haitian drug money that would help Haiti pursue the bribery case in U.S. courts. The accused company is run by a former Republican congressman. The Criminal Division chief, Alice Fisher, formerly a registered lobbyist for HCA, the healthcare company founded by the father of Republican Senate Majority Leader Bill Frist, is a recess appointee. Her approval was blocked by Senators concerned about her qualifications and about her participation in a government meeting on abusive interrogations at the U.S. military prison camp at Guantanamo. Haiti Telecom Kickbacks Tarnish Aristide CorpWatch, Dec 29, 2005 – Two U.S. lawsuits charge that former Haitian President Jean-Bertrand Aristide and his associates accepted hundreds of thousands of dollars in kickbacks from politically connected U.S. telecom companies. Lawsuits filed this Fall challenge the former priest's image of political purity and raise claims that both he and U.S. corporate executives scammed illegal profits off the hemisphere's poorest population. In one suit, a fired executive charged his former employer, the U.S. telecom IDT (Newark, NJ), with corruption, defamation, and intimidation under the New Jersey anti-racketeering law. In the second, the government of Haiti contends that IDT, Fusion (New York, NY) and several other North American telecoms violated the federal RICO anti-racketeering statute. Both suits allege that Aristide, now in exile in South Africa, and his associates, took kickbacks. Follow Aristide's Money Offshore: How Haiti was looted with the help of tax haven shell companies & secret bank accounts and U.S. citizens & corporations Haiti Democracy Project, Nov 10, 2005 – Add former Haitian president Jean-Bertrand Aristide to the long list of corrupt and repressive officials who have used Western banks and companies and offshore tax havens to plunder their countries and launder the stolen money. Aristide and his associates looted government coffers, wrote checks to front companies for nonexistent purchases, padded invoices to get kickbacks from vendors, secretly owned companies that cheated Haiti of taxes, and laundered the money they stole through shell companies and secret bank accounts set up in the United States and the offshore tax havens of Turks and Caicos and the British Virgin Islands. Nearly $20 million has been documented as stolen between 2001, when Aristide took office as president for the second time, and 2004, when he fled or was forced out of the country according to varying accounts.