30160: Robert Benodin (article) Exclusive: Sealed evidence in the IDT Haiti bribery case is revealed (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: Robert Benodin <r.benodin@worldnet.att.net>

Exclusive: Sealed evidence in the IDT Haiti bribery case is revealed
By Lucy Komisar

March 8, 2007
Until now, IDT, the giant US telecom caccused of bribing former Haiti President 
Bertrand Aristide to get a lucrative phone contract, has managed to keep 
details of the case under wraps. That is because lawyers succeeded in getting 
the judge 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. And 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.
Excerpts follow, and some of the complete declarations (answers to 
interrogatories) are attached. For more background about the case, see these 
past stories.
Michael Jewett says he was fired by IDT because he objected to a deal to 
provide long distance phone service from the US to Haiti that would grant a 
bargain rate to IDT in exchange for kickbacks to Aristide. The deal was 
constructed to send IDT payments not to the Haitian phone company, TeleCo, but 
to a secret bank account owned by Aristide in the offshore Turks & Caicos 
Islands. T&C is a tax haven where owners of shell companies and bank accounts 
enjoy anonymity, which attracts shady customers and swells the profits of the 
financial services sector.
IDT, which is run by James Courter (shown here), a former Republican 
congressman from New Jersey, is based in Newark, NJ. IDT officials say Jewett 
was fired because he wasn't doing his job.
The IDT-Haiti deal was made in 2003. Jewett, who had been manager for the 
Caribbean, was fired shortly thereafter. He filed suit in New Jersey for 
wrongful dismissal. The company has resorted to years of legal delays to keep 
the case from trial and the details from the public.
Here are excerpts of Michael Jewett's Nov. 2006 answers to IDT interrogatories. 
They detail the general charges he has made in the case. They are followed by 
the responses of IDT officials, all of whom either say they know nothing about 
any corrupt deal or that Jewett only joked about it.
Jewett says:
My objections to the TeleCo Haiti deal appear numbers times in the complaint 
and court papers I have filed in this case.
More specifically, on September 16, 2003, defendant Jack Lerer, Executive Vice 
President for International Business Development for IDT, told me that he 
negotiated a deal with the President of Haiti, Jean Bertrand Aristide, to 
forward telephone traffic to Haiti for 9.5 cents per minute. IDT Telecom would 
deposit the settlement dollars from terminating traffic in Haiti through TeleCo 
Haiti to an offshore account set up on behalf of President Aristide called 
Mount Salem Management, headquartered in the Turks and Caicos Islands. I asked 
defendant Jack Lerer what Mount Salem was and he replied it was the private 
bank account of the President of Haiti, Jean Bertrand Aristide, that had been 
created by legal counsel for President Aristide, Adrian Corr, member of the law 
firm Miller, Simons and O'Sullivan.
I questioned if it was legal for IDT to make settlement deposits into the 
private offshore bank account of the President of Haiti rather than depositing 
the settlement proceeds into the bank account of TeleCo Haiti. Defendant Jack 
Lerer told me it did not matter who got the money as long as IDT was protected 
from TeleCo Haiti alleging that they had not been paid for terminating IDT's 
telecommunication traffic in Haiti.
That same day Mr. Lerer met with me and defendant John Cate, Vice President of 
International Network Development, to explain the particulars of the deal for 
purposes of having us perform work to facilitate the deal. Mr. Cate was 
assigned as technical correspondent and I was to serve as the 'go-between' for 
all commercial correspondence between TeleCo Haiti and Mount Salem. Mr. Lerer 
instructed us not reveal the details of the TeleCo Haiti deal with anyone 
within IDT and I was further directed to work with defendant Alex Schwartz, as 
legal counsel.
At the conclusion of this meeting with defendant Jack Lerer, plaintiff and 
defendant John Cate discussed whether or not it was lawful and or legal for IDT 
Telecom to proceed with the TeleCo Haiti deal, as described above.
Defendant John Cate indicated that at his former employer, ATT, he participated 
in the preparation of submissions far the Federal Communications Commission 
(hereinafter "FCC"). He stated that during his 27 years at ATT, he had never 
once been involved with let alone heard of a telecommunication proposal and / 
or contract being structured in a manner similar to the TeleCo Haiti agreement. 
We further discussed FGG regulations and Mr. Cate stated that TeleCo Haiti was 
an "ISP" country referring to a regulatory policy of the Federal Communications 
Commission called the International Settlements Policy. I was generally aware 
of the International Settlements Policy and its requirement that all U.S. 
carriers conform to a uniform settlement rate with certain countries.
Mr. Cate opined that the contract with TeleCo was set for a price which was 
below the official settlement rate set by the FCC and for that reason the 
contract needed to be submitted to the FCC for approval. We then both expressed 
serious misgivings to one another as to the legality of the proposed TeleCo 
Haiti contract and what the FCC might do to IDT if the FCC were to learn of the 
details involving the payment of TeleCo Haiti's settlement proceeds into the 
private offshore bank account of President Aristide.
I expressed objections to defendant John Cate as to the legality of the TeleCo 
Haiti contract both in terms of its payments to offshore accounts and the fact 
that IDT needed to seek FCC approval of the deal.
In September l6, 2003, defendant David Schropfer, Executive Vice President 
Strategic Management, met with me and John Cate to express his support for the 
TeleCo Haiti deal. On that day I expressed objections to David Schropfer on 
grounds of its payments to offshore accounts and not TeleCo Haiti, it's 
discounted per minute rate being below FCC sanctioned guidelines, and the fact 
that it needed to be filed with and approved by the FCC.
Mr. Schropfer responded to my objections by stating the deal would proceed 
because it was a "Jack deal" and that defendant Jack Lerer had the support of 
the Chairman of IDT, defendant Howard Jonas. He then instructed me to work with 
defendant Alex Schwarz, Esq., Legal Counsel for IDT Telecom, in structuring the 
contracts with TeleCo Haiti and Mount Salem Management.
In or about late September 2003, defendant Jack Lerer provided me via email the 
contact names of Mr. Adrian Corr, signing authority of Mount Salem and Mr. Jean 
Robert Duperval, a Senior Manager of TeleCo Haiti. Additionally, defendant Jack 
Lerer instructed me to only copy "Fred," who purportedly was to act as 
President Aristide's agent.
On or about mid to late September 2003, at the direction of defendant David 
Schropfer and defendant Jack Lerer, I forwarded a draft copy of IDT's standard 
Interconnect Agreement to both Mount Salem Management and TeleCo Haiti, via 
email on behalf of Mr. Lerer as ordered by defendant Mr. Lerer.
On or about mid to late September 2003 and early October 2003, I expressed 
objections to the legality of the TeleCo Haiti Deal to defendants Jack Lerer, 
Alex Schwarz, David Schropfer, and John Cate. All objections occurred at IDT 
offices located at 520 Broad Street, Newark, New Jersey.
At one point when speaking directly to Alex Schwarz in the hallway outside 
Jonathan Levy's office on or about late September 2003, I said to him I did not 
believe the TeleCo Haiti Deal complied with law in that it involved payments to 
an off shore account and that the discounted price and administration of 
payments needed to be disclosed to the FCC. In response defendant Alex Schwarz, 
Esq., stated his doubts about the legality of the deal but said he was just 
doing what he was told to do.
On or about early October 2003, I forwarded, on behalf of defendant Jack Lerer, 
to both TeleCo Haiti and Mount Salem via e-mail, Non-Disclosure agreements 
which were prepared, on information and belief, by defendant Alex Schwarz.
On or about early October 2003, signed Non-Disclosure documents were faxed and 
delivered by courier between the parties.
On or about early October 2003, I and John Cate had lunch with Peter Shore on 
more than one occasion and defendant John Cate and I both expressed objections 
to the TeleCo Haiti Deal. It is believed Mr. Shore resides in Princeton, New 
Jersey.
In early October 2003, defendant John Cate and I described the terms and 
conditions of the TeleCo Haiti deal to Miriam Haskell in IDT's finance 
department. We both expressed concerns over the legality of the deal to her. 
Ms. Haskell was equally concerned about the deal as well and that defendant 
Michael Levine in the Finance Department will never approve the deal. Mr. Cate 
responded by stating that Mr. Jonas is supporting the deal.
In October 2003, I provided administrative support to Alex Schwarz, Jack Lerer 
and David Schropfer concerning the contracts for TeleCo Haiti and Mount Salem 
Management.
In early to mid October 2003, I sent numerous emails on behalf of Jack Lerer 
and Alex Schwarz, between IDT Telecom and TeleCo Haiti and IDT Telecom and 
Mount Salem Management for purposes of negotiating and finalizing the terms and 
conditions of the proposed agreement.
During this time (early October 2003), I repeatedly expressed objection to 
defendants Schwarz, Schropfer, and Lerer as to the legality of the TeleCo Haiti 
Deal in terms of its payments to Mount Salem Management (Aristide) and not 
TeleCo Haiti, and the fact that the discounted deal had to be filed and 
approved by the FCC. In response they stated, on various occasions, that the 
most important thing was to ensure that the agreements tied TeleCo Haiti and 
Mount Salem together so that if something happened to President Aristide, 
TeleCo Haiti could not sue IDT Telecom for non-payment of settlements.
On or about mid October 2003, I heard defendant Jack Lerer and defendant Alex 
Schwarz, engage in a conference call with "Fred" for the purpose of negotiating 
the per minute settlement rate with TeleCo Haiti and Mount Salem Management 
downward.
In or about mid October 2003, at the direction of defendant David Schropfer, I 
prepared the deal profile for defendant Jack Lerer which summarized all the 
salient terms and conditions of the proposed agreement between IDT Telecom, 
TeleCo Haiti and Mount Salem Management. I requested permission from defendant 
Schropfer to include my objections to the legality of the deal directly in the 
deal profile, which request was denied.
At about this time, the IDT defendants who were directly involved in the 
transaction began to exclude me from meetings and discussions concerning the 
Mount Salem Management/TeleCo Haiti deal.
On or about the end of October 2003, defendant David Schropfer stopped me from 
personally circulating the deal profile to and among IDT executives in 
contravention of normal practice at IDT.
He personally circulated the deal profile to explain the deal and obtain 
signatures from Defendant Robert Schiff, Director of IDT Telecom Sales, 
Defendant, Avi Lazar, Senior Vice President of Global Buying, Defendant, 
Michael Levine, Senior Vice President Finance IDT Telecom and Defendant, 
Jonathan Levy, President IDT Telecom.
On or about the mid to end of October 2003, I was excluded from a global 
meeting of the Strategic Management Team that all ARVPs and more senior 
executives were required to attend for the purpose of discussing global and 
regional strategies. I was initially instructed to attend the meeting but a few 
days prior to the meeting I was informed I was no longer permitted to attend. I 
was not provided any explanation why I was the only ARVP excluded.
On or about late October 2003, Miriam Haskell in the IDT Finance Department 
advised me that the deal profile had been approved. Shortly thereafter the 
completed deal profile was available on line as part of IDT's internal 
documentation management system. I was however not informed of the final 
negotiation of the contracts with TeleCo Haiti and Mount Salem Management, in 
contravention of normal practice at IDT.
On or about the end of October 2003, I was not permitted to send out the final 
version of the contracts in contravention of normal practice at IDT. On or 
about November 5, 2003, I learned of the return of the signed contracts from 
Mount Salem Management and TeleCo Haiti through a paralegal in the IDT Legal 
Department, Mark Latourich.
Shortly thereafter I personally confronted Mr. Schropfer with this knowledge 
and repeated my objection that IDT was proceeding with the deal.
Mr. Schropfer gave no response except to ask how I found out about the signed 
contracts. On November 11, 2003, I was terminated without notice.
About John Cate VP of International Network Planning
Mr. Cate indicated that all of his correspondence with TeleCo Haiti and Mount 
Salem Management Ltd required a CC to Mr. Alfonse Inevil, Director General of 
TeleCo Haiti. Mr. Cate was told by Mr. Jack Lerer, SVP International Business 
Development, that Mr. Inevil was the brother-in-law of President Aristide and 
that he would also be receiving personally some of the settlement money IDT was 
depositing with Mount Salem Management Ltd on behalf of President Aristide.
I asked Mr. Cate if in his 27 year employment with ATT, had he ever been part 
of a deal like IDT put together with TeleCo Haiti and Mount Salem Management 
Ltd, to which he replied, "ATT would never get involved in a deal like this. 
The FCC would be all over them." Mr. Cate indicated that the deal in his mind 
was not only illegal but immoral considering how poor Haiti was.
He asked me whether I thought that Jack Lerer may have had something to do with 
my firing.
His notes:
John Cate called Jan 9/04. Aristide impatient to have everything up and running
Michael Bloomberg to be in Haiti. John Cate called on Feb14/04:
Haiti - The interconnect is up and running.
IDT was passing traffic through the interconnect for testing purposes. By the 
end of Feb/04, all of the traffic would be going through the interconnect. I 
asked if they were worried about Aristide being removed or killed.John said 
that IDT felt that the US government would support him and the deal that IDT 
had with him would remain intact. (Jewett's full testimony.)
The company officials respond
IDT President Howard Jonas's testimony is a repetitive declination to answer 
the questions about the TeleCo deal or Jewett's firing as "overly broad" and 
"irrelevant," protected by attorney-client privilege, etc. CEO James Courter 
said the same.
Jack Lehrer, Executive Vice President for International Business Development 
for IDT, said in his interrogatory, "No one communicated any objections to me 
about the TeleCo Haiti Deal." And he said he had nothing to do with Jewett's 
firing. (Lehrer's testimony.)
David Schropfer Executive Vice President Strategic Management said in his 
testimony:
In August 2003, I was asked by Jack Lerer to become involved in the execution 
stage of a possible interconnection with TeleCo Haiti. During this stage, Mr. 
Lerer informed me that TeleCo Haiti requested that a third party administrator 
be used for possible payments related to the deal.
I discussed this structure with others and delegated tasks related to 
implementing the requested structure. During this early stage in putting 
together the prospective TeleCo Haiti deal, I recall at least one person 
questioning me as to whether I thought it was appropriate and/or legal to use a 
third party administrator. In response, I explained that Mr. Lerer told me that 
the deal's structure had already been preliminarily approved by Legal, and that 
the deal would also go to the legal department again for final review before 
the contracts were ever approved or finalized to make sure it complied with all 
legal requirements. I also explained that if there was a problem with the deal, 
the legal department would not "stamp it" approved and we would not do the deal 
without the legal department approving the structure of the final contract.
I have no recollection as to who the person was who questioned me about the 
deal since a number of people were involved in working on different aspects of 
the deal. Those primarily involved included Mr. Jewett, Mr. Lerer, John Cate, 
Alex Schwarz and me. Also, two other support personnel were involved. We all 
met and discussed the deal at various times. The question may or may not have 
come from Mr. Jewett.
There were no questions or comments made to me or in my presence regarding the 
lawfulness or appropriateness of-the TeleCo Haiti deal other than what I 
explained above. I do know that our legal department analyzed the deal to 
confirm its legality and that it was approved by legal before it was executed. 
I also know that the deal was approved by legal and was executed prior to the 
time Mr. Jewett's employment was terminated on November 11, 2003.
Schropfer noted, "I am the person who hired Mr. Jewett on or about April 15, 
2003 and assigned him his job responsibilities. On at least four occasions, 
Jonathan Levy brought up with me the subject of terminating Mr. Jewett." He did 
it the last time, just after the deal went through. (Schropfer's testimony.)
Cate, who shared an office with Jewett, said, "I never heard Mr. Jewett object 
to the Telco Haiti deal as being unlawful during his time at IDT." He recalled 
only that "when we returned to our office following our initial meeting with 
our manager, David Schropfer, where we were provided with an over view of the 
deal and received our assignments, Mr. Jewett did make a wisecrack quip that 
the Telco Haiti deal 'must be Aristide's bank account.' We both laughed."
Cate recalled that, "During the meeting, we were told that we would 
interconnect to the TeleCo Haiti network and that TeleCo's settlement agent was 
in the Turks & Caicos Islands, and that we should meet with Jack Lerer for more 
information. Nothing learned in the meeting with David would support an 
allegation that the deal was unlawful."
He said that "the use of settlement clearinghouses by telecommunications 
carriers is an established industry practice, and it is each carrier's 
prerogative to designate the manner in which its settlements are administered 
and settled. I had seen these arrangements in my career at AT&T."
He said when he and Jewett met with Jack Lerer later that day and heard "a high 
level description of the deal.Mr. Jewett repeated his quip and laughed. Mr. 
Lerer was taken back."
He said that Lerer said that "the settlement arrangement was requested by 
TeleCo Haiti, the government-owned PTT of Haiti; this is what the Haitian 
government wants." Cate remembers commenting that he had seen this type of 
arrangement many times during his career at AT&T.
He said he never heard Jewett raise the issue of the legality of the deal with 
him or their superiors, or recommending that they should not go forward with 
the deal for any reason. Though "on a few occasions Mr. Jewett repeated his 
sarcastic quip, sometimes at lunch or with lower level project management 
employees. Each time he said this, it was in the context of a joke and he never 
argued, stated or presented any facts that would suggest that he thought that 
there was anything illegal with the TeleCo Haiti deal. I never took his joke as 
a serious concern about the TeleCo Haiti deal or as an objection to the 
proprietary or lawfulness of the deal." (Cate's testimony.)