US Congress blow to Compass

By Salamander Davoudi
December 8, 2005
Financial Times
Original Source: http://news.ft.com/cms/s/286dc9f8-6822-11da-bfce-0000779e2340.html

The troubles facing Compass, the contract caterer facing multiple legal probes into alleged corrupt buying practices at the United Nations, deepened on Thursday after an influential US congressional committee called for a further investigation into the allegations.
The lawmakers’ urging for further action appears to dash Compass’s hopes that the several investigations now under way into its relationship with UN procurement officials will be concluded quickly.
A report from the House of Representatives international relations committee provides new evidence that a close relationship existed between Eurest Support Services, a Compass subsidiary, and IHC Services, an intermediary company that allegedly leaked details of a UN tender to ESS.
It also raises questions about a bid by ESS for a UN contract in Sudan, suggesting for the first time the scope of the investigations has extended beyond a contract the company secured in Liberia.
Compass said: “We have already discussed the nature of the issue and as a consequence can see no reason to comment on the detail of the report. We continue to co-operate fully and voluntarily as appropriate with all relevant authorities, including the US congressional committee.”
Henry Hyde, chairman of the committee and one of the most senior and powerful Republicans in the House of Representatives, is a well-known critic of the UN.
One person close to the committee said: “This investigation is set to continue.”
Staff on the committee have been investigating these relationships for several months and have based part of their report on documents subpoenaed from IHC.
The report says: “IHC Services, Eurest Support Services and Compass Group – The Committee finds that all three companies must be further investigated for the roles they played with respect to their work with the UN.”
The committee said ESS regularly updated IHC on its progress with contracts with the UN.
“In at least two instances, a field logistics official with a branch of ESS’s parent company, Compass Global Transit Centre in Holland (an ESS official), told his company about bidding information he received from a UN rations contracts officer in Sudan,” it said.
Compass has been suspended by the UN as a registered vendor while it completes its own probe and the Serious Fraud Office has launched a preliminary examination to see whether a full investigation is required. A US federal authority has subpoenaed the company.
Documents emerged in September suggesting a Compass employee possessed financial details of bids made by competing companies before a contract to supply food and water to UN peacekeepers in Liberia had been awarded. ESS won the contract.