COURT FILE NO.: CR-21-90000590-0000 DATE: 20230307
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
HIS MAJESTY THE KING - and - DAMODAR ARAPAKOTA
Counsel: Lisa Csele and Yael Pressman, for the Crown Patrick McCann and Nabila Malik, for Mr. Arapakota
Heard: September 12-16, 19-23, 27-29; and October 3, 2022
R. MAXWELL J.
REASONS FOR JUDGMENT
Overview
1The accused, Mr. Arapakota, is charged with one count under s. 3(1)(a) of the Corruption of Foreign Public Officials Act (S.C. 1998, c. 34) (the “CFPOA”).
2It is alleged that, between December 14, 2015 and January 2, 2016, he directly or indirectly, in order to obtain or retain an advantage in the course of business, gave or offered to give an advantage, reward or benefit to a public foreign official, as consideration for an act or omissions by the official in connection with the performance of the official’s duties or functions.
3The foreign public official the Crown alleges Mr. Arapakota gave an advantage, reward or benefit to Dr. Omponye Coach Kereteletswe, an official with the Government of Botswana (“GOB”).
4The “advantage, reward or benefit” said to have been given or offered to Dr. Kereteletswe was a trip from New York City to Orlando, Florida and back for Dr. Kereteletswe and his family, including paying up front for flights and hotel stays, and paying for dinners, visits to attractions, and shopping trips. The Crown alleges the reward, in total, had a cost of $40,000 (the “US Trip”).
5The “act or omission” said to have been done by Dr. Kereteletswe was providing letters confirming the termination of a contract between the GOB and the Public Sector Transformation Group (“PSTG”) and stating the GOB’s intention to engage Mr. Arapakota’s company, Imex Systems Inc. (“Imex”) to provide various e-services.
6The “advantage in the course of business” that Mr. Arapakota is said to have obtained or retained through the letters was added assurance of the GOB’s intention to retain Imex to provide e-services in Botswana and the ability to include projected revenue from the prospective contract as unbilled revenue in its financial statements.
7Much of the Crown’s case was introduced through Sergeant Benjamin Bertrand of the Royal Canadian Mounted Police (the “RCMP”), who was the lead investigator in the matter. The Crown’s case rests heavily on documentary evidence obtained through search warrants executed on Mr. Arapakota’s home and office in 2019, as well as production orders for banking records.
8The Crown also called numerous former employees and/or board members of Imex, most of whom were either called to provide evidence about Imex’s financial circumstances between 2014, when Imex began working with the GOB, and 2018, when Mr. Arapakota resigned as Chief Executive Officer of Imex, or who were directly involved in working in Botswana.
9The Crown called the following witnesses:
- Haji Makki – the bookkeeper and financial controller overseeing finances at Imex from 2003 to 2018;
- Krzytopher Sobkowicz – a program and system developer employed with Imex from the spring of 2014 to the spring of 2016;
- Krishna Parthiban – a member of Imex’s board of directors from 2015 to 2018 and the interim Chief Executive Officer of Imex after Mr. Arapakota resigned in 2018;
- Daniel Crandall – an external Chief Financial Officer of Imex from September of 2015 to October of 2017;
- Avneet Malhotra – a Chartered Accountant and Imex’s auditor from 2014 to 2016;
- Michael Frank – a consultant who worked with Imex from September of 2014 until August of 2015 when he was terminated; he returned as a consultant intermittently until 2017/2018;
- Kitsio Serumaga – a business systems analyst who worked with Imex in preparing its bid for the Botswana Project in March/April of 2016.
10The Defence called Agal Ziskind (a former Imex employee), Piyush Sharma (a lawyer in Botswana), Dr. Kereteleteswe, and the accused as witnesses.
11On January 16, 2023, I advised the parties that on careful review of the evidence, I was not satisfied that the Crown had proven Mr. Arapakota’s guilt on the charge beyond a reasonable doubt. I indicated that my written reasons for judgment would follow. These are my reasons.
Factual Background
Background on Imex
12Imex is a software development company specializing in developing and implementing software for e-government solutions. Imex developed and implemented software called “iGov” to facilitate the digitalization of government services such as online payments and electronic billing systems.
13Mr. Arapakota founded the company in 1997. He is an engineer with a high degree of technical skill. He developed the iGov technology. Imex was a successful company in Canada, providing e-government solutions for federal and provincial governments in Canada with some work in the United States.
14At the relevant time of the alleged offence, he was the Chief Executive Officer and Chief Technology Officer of Imex. His family trust owned 100% of the shares in Imex.
15Imex sought to expand its business internationally. The Botswana Project was its first foray into bringing its products to an international client.
Imex Enters Into a Subcontract with PSTG to Provide E-government Solutions to the GOB
16On December 9, 2013, the GOB entered into a contract with PSTG to provide e-government expert advisor and implementation management services to the GOB. [1] The contract provided that PSTG would provide advice on the development of the functional and business requirements for e-services in Botswana, re-platforming the e-government portal, overseeing content development, and business management (the “Botswana Project”).
17The contract permitted PSTG, with the approval of the GOB, to hire subcontractors in relation to the services which formed part of the agreement. Imex had been working with PSTG, providing the software and technical expertise on the needs of the GOB and its e-government portal. As the provider of the software and technological expertise on the project, Imex was approved as a sub-contractor on the Botswana Project.
18Imex entered into a subcontract with PSTG in late 2013. A copy of a subcontract between PSTG and Imex was entered as an exhibit on the trial. [2] Although the copy of the subcontract filed on the trial was signed only by Mr. Arapakota, there is no dispute that Imex had a sub-contractual agreement with PSTG to provide the software and implementation expertise for the Botswana Project.
19It was around the time of Imex entering into the sub-contract with PSTG that Mr. Arapakota first met Dr. Kereteletswe.
20Dr. Kereteletswe has spent his entire career in different roles within the GOB. In 2013 until the summer of 2015, he was the coordinator of e-government services for the GOB and was in charge of the Botswana Project. He signed the contract with PSTG on behalf of the GOB. David Little, President and CEO of PSTG, signed on behalf of PSTG. Mr. Arapakota was present in Botswana for the signing of the contract between the GOB and PSTG.
The Dissolution of the Contract between PSTG and the GOB
21Work on the Botswana Project progressed well through 2014 into 2015.
22However, the Project began to falter, mainly related to resource shortages. The GOB did not have sufficient services and infrastructure to install the software and the necessary systems. PSTG had few people working in Botswana and those who were there had limited technological experience.
23In or around May or June of 2015, as a result of a change in the government, Dr. Kereteletswe was removed as director of e-government services for the GOB and moved to another role in the Ministry of Transportation. His former deputy, Kitso Kithakwa, assumed responsibility for overseeing the Botswana Project on behalf of the GOB.
24The relationship between PSTG and the GOB deteriorated. PSTG served notice that it wished to terminate the contract with the GOB. In August of 2015, the GOB terminated its contract with PSTG.
25The Crown asserts that, around the time of the GOB terminating its contract with PSTG, Imex began to lobby the GOB to award the work remaining on the Botswana Project directly to Imex.
26As will be discussed in greater detail below, securing the Botswana Project was of great importance to Imex and its Board, and particularly, Michael Frank, who exerted pressure on Mr. Arapakota to finalize the contract.
27The Permanent Secretary to the President made a recommendation to grant Imex sole sourcing of the contract and referred the matter to the Public Procurement and Development Board (“PPADB”). The PPADB approved the “direct appointment process” to retain Imex for the Bostwana Project on November 26, 2015. [3] In early December 2015, the GOB circulated a draft Memorandum of Agreement between the GOB and Imex. [4]
28Sometime on or before December 10, 2015, Mr. Arapakota requested a letter from Dr. Kereteletswe, confirming the decision of the PPADB to offer Imex the sole source bidding rights to the Botswana Project through its “direct appointment” procedure. Dr. Kereteletswe provided the letter, dated December 10, 2015, to Mr. Arapakota, on December 10, 2015.
29Shortly thereafter, in December of 2015, Dr. Kereteletswe and Mr. Arapakota went on the US Trip with their families. While they were in on the US Trip, Mr. Arapakota requested two additional letters – the first confirming the GOB’s intention to retain Imex for phase II of the Botswana Project and the second, stating of value of the Botswana Project. Dr. Kereteletswe provided these letters, dated January 8, 2016, after Mr. Arapakota returned to Toronto.
30Once the bid was recommended by the PPADB, finalizing the agreement stalled in the Permanent Secretary’s Office due to turnover in staffing. Imex was ultimately granted the contract on December 22, 2016, [5] after submitting its proposal through a “two-envelope” proposal process [6] to the PPADB. A letter confirming the bid was issued in or around January of 2017.
31Had the Draft Memorandum of Agreement within the RFP been signed, it would have entitled Imex to a 10% deposit on the value of the contract, approximately $1.5 million. However, the negotiations that followed failed to produce a signed contract and ultimately, Imex’s involvement in the Botswana Project came to an end.
The Investigation
32Following the failed negotiations, the relationship between Mr. Arapakota, the Board, Mr. Frank, and his associate, Mr. Saltsman was further strained. In the fall of 2017, Mr. Frank sent numerous hostile emails to Imex executives concerning Mr. Arapakota, [7] which will be reviewed in greater detail below.
33On or about March 1, 2018, Mr. Arapakota resigned as Chief Executive Officer of Imex. He was replaced by Mr. Parthiban.
34Thereafter, Mr. Frank and Mr. Saltsman arranged a private placement of Imex shares. [8] As a result, Mr. Arapakota lost majority shareholder control over Imex.
35Mr. Arapakota brought an application to the British Columbia Securities Commission in July of 2018 seeking a halt to trading in the private placement of Imex shares. The BCSC made an interim order halting the trading.
36After his departure, Mr. Arapakota requested he be repaid funds he maintained he had loaned to Imex. At this time, Imex had $3 million of debt. The expenditures on the US Trip came to light and led Imex to conduct an internal investigation into Mr. Arapakota’s expenses. Mr. Parthiban contacted the RCMP to report the company’s concern about the $40,000 expenditure on the US Trip, given Imex’s significant debt.
37Ultimately, Imex referred the matter to the RCMP. Sergeant Beltrand led the investigation into the matter. He interviewed various former Imex employees. He also obtained and executed search warrants, which resulted in the collection of voluminous documents. He obtained production orders for Mr. Arapakota’s email accounts.
38Sargeant Beltrand testified that the RCMP made a tactical decision not to investigate in Botswana.
39As a result of the investigation, Mr. Arapakota was charged with one count of violating s. 3(1)(a) of the CFPOA.
Position of the Parties
40The Crown submits that the overall circumstances give rise to an inference that the US Trip was arranged and financed as consideration for Dr. Kereteletswe providing three letters which Mr. Arapakota believed would benefit his company’s business dealings. Further, the Crown argues that Mr. Arapakota would not have given Dr. Kereteletswe such an extravagant gift if it was not in consideration of something Dr. Kereteletswe had done for him. This, the Crown argues, is underscored by the incidental expenses for food, shopping, attractions, and other expenditures incurred, on top of the flight, hotel, and insurance expenses.
41The Defence concedes that Dr. Kereteletswe was a foreign public official and that he, in writing the letters of December 10, 2015 and January 8, 2016, was performing an official function. There is also no dispute that Mr. Arapakota knew that Dr. Kereteletswe was a foreign public official.
42The Defence submits that the US Trip was arranged in the manner it was as a matter of convenience and was reimbursed. The Defence further submits that the evidence does not establish that the US Trip was consideration for the letters Dr. Kereteletswe provided, or that Mr. Arapakota knew or intended that the US Trip be consideration for the letters. Finally, he submits that the evidence does not establish that Mr. Arapakota arranged the US Trip for Dr. Kereteletswe for the purpose of gaining or retaining a business advantage. The letters did not result in any real or potential business advantage. The only potential advantage identified in the evidence – boosting of Imex’s unbilled revenues in its financial statements by including projected revenue from the Botswana Project – was something Mr. Arapakota expressly opposed.
The Applicable Legal Principles
General Principles
43Mr. Arapakota is presumed to be innocent of this charge. The Crown bears the burden of proving the elements of the offences charged beyond a reasonable doubt.
44The reasonable doubt standard is a high standard. It is not sufficient to prove that the defendant is probably guilty. However, the Crown is not required to prove its case to the point of absolute certainty, which would be impossibly high.
Elements of the Offence
45Section 3(1)(a) of the CFPOA states:
- (1) Every person commits an offence who, in order to obtain or retain an advantage in the course of business, directly or indirectly gives, offers or agrees to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official (a) as consideration for an act or omission by the official in connection with the performance of the official’s duties or functions […]
46Canada enacted the CFPOA in 1998 to fulfill its obligations as a member of the Organization for Economic Co-operation and Development (“OECD”) and as a signatory to the Convention on Combatting Bribery of Foreign Public Officials (“the Convention”).
47The mandate of the Convention, and the CFPOA, is to combat bribery in international business practices. The importance of this mandate was recognized in World Bank Group v. Wallace, 2016 SCC 15, [2016] 1 S.C.R. 207, at para. 1:
Corruption is a significant obstacle to international development. It undermines confidence in public institutions, diverts funds from those who are in great need of financial support, and violates business integrity. Corruption often transcends borders. In order to tackle this global problem, worldwide cooperation is needed.
48Although not binding on the court, the language in the Convention provides helpful guidance in interpreting the elements of the offence under s. 3(1) of the CFPOA: R. v. Karigar, 2017 ONCA 576, at paras. 40-41.
49Article 1(1) of the Convention provides:
Each Party shall take such measures as may be necessary to establish that it is a criminal offence under its law for any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business. [9] (emphasis added)
50The Commentaries to Article 1(1) stipulate that it is open to state parties to adopt different approaches to fulfil their obligations, provided that conviction of a person for the offence does not require proof of elements beyond those which would be required to be proved if the offence were defined in Article 1(1). [10]
51Distilled down to its parts, the elements of the offence contemplated under Article 1(1) of the OECD Convention are:
(1) the accused intentionally offered, promised, or gave (whether directly or indirectly) any undue pecuniary or other advantage; (2) the intentional offer/promise/giving of advantage is made to a foreign public official, for that official, or for a third party; (3) the intentional offer/promise/giving of advantage was given in order that the foreign public official act or refrain from acting in relation to the performance of official duties; and, (4) the intentional offer/promise/giving of advantage was in order to obtain or retain business or other improper advantage in the conduct of international business.
52The second source which assists in identifying the elements of the offence under s. 3(1) of the CFPOA is s. 121 of the Criminal Code, which addresses bribery of Canadian government officials.
53Section 121(1) of the Criminal Code states:
Every one commits an offence who (a) directly or indirectly (i) gives, offers or agrees to give or offer to an official or to any member of his family, or to any one for the benefit of an official […] a loan, reward, advantage, or benefit of any kind as consideration for cooperation, assistance, exercise of influence or an act or omission in connection with […] the transaction of business with or any matter of business relating to the government…
54In its report to the OECD in 1999, following the enactment of the CFPOA, Canada confirmed that the wording in s. 3(1) of the CFPOA reflects a combination of both Article 1(1) of the OECD Convention and s. 121(1)(a) of the Criminal Code.
55When read together and contrasted, there are similarities between the offence contemplated in Article 1(1) of the OECD Convention, the offence set out in s. 3(1) of the CFPOA, and the offence captured in s. 121(1) of the Criminal Code.
s. 121(1)(a) of the Criminal Code
directly or indirectly gives, offers or agrees to give or offer to an official or to any member of his family, or to any one for the benefit of an official, ... a loan, reward, advantage or benefit of any kind as consideration for cooperation, assistance, exercise of influence or an act or omission in connection with the transaction of business with or any matter of business relating to the government.
Section 3(1)(a) of the CFPOA
In order to obtain or retain an advantage in the course of business, directly or indirectly gives, offers or agrees to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official as consideration for an act or omission by the official in connection with the performance of the official’s duties or functions.
56I therefore conclude that the elements of the offence set out in s. 3(1)(a) of the CFPOA, and which the Crown must prove beyond a reasonable doubt, are:
(1) the accused, directly or indirectly, gives, offers, or agrees to give or offer a loan, reward, advantage, or benefit of any kind; (2) the accused makes the offer of a loan, reward, advantage or benefit of any kind to a public foreign official or to any person for the benefit of the public foreign official; (3) the accused makes the offer of a loan, reward, advantage, or benefit in order to obtain or retain an advantage in the course of business; and (4) the accused makes the offer of a loan, reward, advantage, or benefit as consideration for an act or omission by the official in connection with the performance of the official’s duties or functions.
Mens Rea Under s. 3(1)(a) of the CFPOA
57Both the Crown and the Defence made submissions concerning whether the offence under s. 3(1)(a) of the CFPOA is an offence of general or specific intent. The Crown’s position is that the offence set out in s. 3(1)(a) of the CFPOA is a general intent offence, requiring only an intention to do the acts making up the actus reus and does not require proof of a further motive or corrupt purpose.
58She relies on the comments in R. v. Cogger (1997), 116 C.C.C. (3d) 322 (S.C.C.), in which L’Heureux-Dube J. stated that an offence under s. 121(1)(a) of the Criminal Code does not require the Crown to prove that the accused intended to do something wrong, or have a “corrupt” purpose in accepting a benefit while he was a government official. Rather, it is sufficient that the accused knew that he was an official, intentionally demanded or accepted a reward or advantage, and knew that the reward was given as consideration for his assistance or exercise of influence in connection with a transaction with the government.
59The Crown further points out that there is no language in s. 3(1)(a) of the CFPOA, such as “corruptly” or “wilfully”, to support a conclusion that the offence requires a mens rea beyond the intention to do the acts which make up the actus reus.
60I agree with the Crown that, like s. 121(1)(a) of the Criminal Code, s. 3(1)(a) of the CFPOA does not require proof that Mr. Arapakota intended to do wrong by arranging the US Trip for Dr. Kereteletswe, in the sense of having a “corrupt intention”: Cogger, at para. 31.
61With that said, the more salient issue is what is the applicable mens rea for the offence?
62In my view, on a plain reading of s. 3(1)(a) of the CFPOA, s. 3(1)(a) requires proof of subjective fault as the requisite mens rea for the offence.
63The Convention contemplates the criminalization of intentional offers/promises/giving of advantage by a person in order that the foreign public official act or refrain from acting in relation to the performance of official duties and in order to obtain or retain business or other improper advantage in the conduct of business.
64Parliament’s intention to incorporate a subjective fault element to the offence under s. 3(1)(a) of the CFPOA is reflected in Canada’s comments in the report on the implementation of the OECD Convention. At pg. 2 of its report, Canada stated:
Section 3(1) is silent with respect to intent. However, Criminal Code offences are presumed to import mens rea unless there is a clear indication to the contrary. Given the nature of the offence, and given how section 121(1) of the Criminal Code has been interpreted, it is expected that the courts would read in a mens rea of intention and knowledge for this offence (see, for example, R. v. Cogger (1997), 116 C.C.C. (3d) 322 (S.C.C.) and R. v. Cooper (1977), [1978] 1 S.C.R. 860). The mens rea of intention and knowledge would include wilful blindness. It would not include the “should have known” standard, which is not to be equated with intention. The “should have known” standard amounts to negligence or lack of due diligence. The words “in order to” imply that there is a purpose underlying the giving etc. of the benefit. (Emphasis added)
65A comparison to the mens rea requirement for s. 121(1) of the Criminal Code also supports a conclusion that the offence under s. 3(1)(a) of the CFPOA requires proof of subjective mens rea. In R. v. Cogger, [1997] 2 S.C.R. 845, the Supreme Court of Canada held, at para. 14, that in order to have the necessary mens rea for an offence under s. 121(1) of the Criminal Code, the trier of fact must find that the accused possessed an intention to commit a prohibited act, while having subjective knowledge of the circumstances.
66Finally, R. v Barra, 2021 ONCA 568, the Court of Appeal for Ontario held that the accused must know that the person being bribed or offered a bribe is a public foreign official, as part of the requisite mens rea for the offence under s. 3(1)(a) of the CFPOA: paras. 74, 78-81. The court addressed only the question of whether, to be guilty of the offence, the Crown must prove that the accused knew the recipient of the advantage was a foreign public official. It did not address other aspects of the actus reus and what mental element is associated to the acts. However, its application of a subjective “knowledge” mens rea to this element of the offence is consistent with a conclusion that a subjective fault element applies to all the elements of the offence.
67Reading these sources together, I am satisfied that s. 3(1)(a) of the CFPOA has a subjective fault element of intention or knowledge. That is, to be guilty of the offence, the Crown must prove that the acts performed by Mr. Arapakota were done with intention and while having a subjective knowledge of the relevant circumstances. The Crown must prove Mr. Arapakota:
(i) intentionally offered or conferred a benefit, reward, or advantage to Dr. Kereteletswe, (ii) that he did so knowing that Dr. Kereteletswe was a public foreign official; (iii) that he knowingly or intentionally bestowed the benefit on Dr. Kereteletswe as consideration for official acts done by Dr. Kereteletswe; and (iv) that he did so for the purpose of, or in order to obtain or retain an advantage in the course of his business (regardless of whether a business advantage was actually realized, or whether the business advantage would have been received without the consideration).
The Meaning of “Advantage” under s. 3(1)(a) of the CFPOA
68In s. 3(1)(a) of the CFPOA, the word “advantage” appears twice – first in relation to the accused seeking to “obtain or retain an advantage in the course of business”, and second, in relation to the advantage or benefit given to the public foreign official.
69The word “advantage” is not defined in s. 3(1) of the CFPOA; however, the jurisprudence under s. 121(1) of the Criminal Code offers an interpretation of the term “advantage or benefit” from that section. Given the parallels between s. 3(1) of the CFPOA and s. 121 of the Criminal Code, the jurisprudence which considers the meaning of “advantage or benefit” under s. 121 of the Criminal Code is instructive.
70The term “advantage or benefit”, in the context of bribery, is meant to capture benefits which are not trivial. In R. v. Hinchey (which is R. v. Cogger), the Supreme Court of Canada, recognizing that without any qualification, an act as simple as giving or buying a cup of coffee for an official could be interpreted as a “benefit”, narrowed the potential scope of the terms. The court stated, at para. 59:
Given the absurd consequences of adopting an unlimited wide meaning of the term ‘advantage or benefit’ it is incumbent to search out an interpretation which avoids these consequences. In my view, many of these can be avoided by a stricter reading of the term, and a recognition that it requires the beneficiary to have secured a material or tangible gain before falling into the confines of this section. (Emphasis added)
71The court cited language from Hoefele v. The Queen, 94 D.T.C. 1878 of the Tax Court of Canada, in which the court found that, to constitute a benefit worthy of measurement, the benefit needed to be a “material economic advantage” and would exclude benefits which do not “advance the recipient’s position in any material sense”.
72Trivial advantages do not satisfy and a benefit which does not advance the recipient’s interests in a material way may not amount to a benefit within the confines of the law.
73The court in Hinchey endorsed Doherty J.A.’s comments in R. v. Greenwood, in which he enumerated relevant considerations in determining whether a gift received by a government official constitutes a benefit or advantage. Doherty J.A. stated, at pp. 252-53:
In considering whether the gift constitutes a benefit or advantage, the nature of the gift, the prior relationship if any, between the giver and the recipient, the manner in which the gift was made, the employee’s function with the government, the nature of the giver’s dealings with the government, the connection, if any, between the employee’s job and the giver’s dealings, and the state of mind of the giver and the receiver would all have evidentiary significance, as no doubt would other factors which may arise in any given case.
74While the cases cited in Hinchey arise in the context of charges under s. 121 of the Criminal Code, the interpretation of the word “advantage” is equally applicable in the context of the CFPOA. In my view, the “advantage in the course of business” and the “advantage” to the public foreign official under s. 3(1)(a) of the CFPOA must be a material or tangible gain, or a material economic advantage.
The Meaning of “As Consideration For” under s. 3(1)(a) of the CFPOA
75I turn now to the meaning of the phrase “as consideration for” in s. 3(1)(a) of the CFPOA.
76I agree with the Defence submission that the requirement that the benefit be “as consideration for” actions undertaken by the foreign public official requires a quid pro quo, or “something for something”. I come to this conclusion based on an analysis of s. 121(1)(a) of the Criminal Code, which contains nearly identical language to s. 3(1)(a) of the CFPOA.
77Section 121(a) of the Criminal Code reads:
121 (1) Every one commits an offence who (a) directly or indirectly (i) gives, offers or agrees to give or offer to an official or to any member of his family, or to any one for the benefit of an official, or (ii) being an official, demands, accepts or offers or agrees to accept from any person for himself or another person, a loan, reward, advantage or benefit of any kind as consideration for cooperation, assistance, exercise of influence or an act or omission in connection with (iii) the transaction of business with or any matter of business relating to the government, or (iv) a claim against Her Majesty or any benefit that Her Majesty is authorized or is entitled to bestow, whether or not, in fact, the official is able to cooperate, render assistance, exercise influence or do or omit to do what is proposed, as the case may be […]
78In contrast, s. 121(1)(b) of the Criminal Code provides a broader basis for liability by requiring that the benefit be “with respect to” dealings with an official but omitting the requirement that the benefit conferred be “as consideration for” the acts or omissions of an official.
79This is a meaningful distinction, as the Court of Appeal for Ontario outlined in R. v. Greenwood, [1991] O.J. No. 1616, at para. 67, in which it distinguished between offences under s. 121(1)(b) and (c) and offences captured under s. 121(1)(a), (d), (e), and (f), all of which include the “as consideration for” requirement:
A comparison of the language in s. 121(1)(c) with the other offences created by s. 121, save s. 121(1)(b), reveals a clear distinction between those offences and s. 121(1)(c). Broadly stated, s. 121(1)(a), (d), (e), and (f) all require that a benefit be given or received as consideration for doing something in connection with the affairs or business of government. For example, s. 121(1)(a)(ii) provides in part that an official who receives a benefit as consideration for his or her co-operation in connection with the transaction of business with the government is guilty of an offence. Each of the offences created by these subsections requires proof of a quid pro quo and involves corruption in its most obvious form. (Emphasis added)
80The court went on to state, at para. 70:
S. 121(c) does not contain the phrase ‘as consideration for’ or any equivalent language. The absence of such language clearly indicates to me that the fault requirement in s. 121(1)(c) differs from that found in those other sections: see Dore v. Canada (Attorney General) [citation omitted]. The difference rests in the absences of any requirement in s. 121(1)(c) that the recipient of a benefit intends to do something in return for the benefit. The corrupt state of mind inherent in the ‘something for something’ nature of the offences created by s. 121(1)(a), (d), (e), and (f) is not present in s. 121(1)(c).
81Justice L’Heureux-Dube identified the same distinction in Hinchey (i.e., Cogger), indicating, at para. 22, that the essence of s. 121(1)(a) of the Criminal Code is the quid pro quo arrangement, which is not required under s. 121(1)(c): see also Cogger, at para. 24.
82In my view, the language of “as consideration for” in s. 3(1)(a) of the CFPOA should be interpreted in a manner that is consistent with the manner in which similar language has been interpreted in s. 121(1)(a) of the Criminal Code, given the similarity in language and the type of conduct the provisions are meant to capture. Importantly, s. 121(1)(a) of the Criminal Code sets liability on a narrower basis than subsection (c) by using the distinguishing phrase “as consideration for”.
83Similarly, s. 3(1)(a) of the CFPOA, properly interpreted, sets a quid pro quo requirement for liability by including the words “as consideration for”.
84In contrast, s. 3(1)(b) of the CFPOA arguably casts the net wider than subsection (a) by requiring only that the accused “induce the official to use his or her position to influence any acts or decisions of the foreign state or public international organization for which the official performs duties or functions” (emphasis added).
85On a plain reading of this section, it is sufficient, under s. 3(1)(b) of the CFPOA that the accused induces, or attempts to induce, the foreign public official to use their position to influence the acts of the foreign state, whether the foreign public official has done anything or not. In this sense, s. 3(1)(b) of the CFPOA captures a different, broader scope of conduct.
Analysis and Factual Findings
86For the reasons that follow, I find that the evidence establishes that, in planning and paying upfront for various expenses, Mr. Arapakota conferred a benefit or advantage to Dr. Kereteletswe.
87However, I am not satisfied that the evidence establishes, beyond a reasonable doubt, that the benefit was conferred “as consideration for” Dr. Kereteletswe providing the letter dated December 10, 2015, or the letters dated January 8, 2016. Nor am I satisfied that the evidence establishes that Mr. Arapakota knew or intended for the US Trip to be consideration for the letters requested.
88Finally, while the letters of December 10th and January 8th may have put Mr. Arapakota in a better position, vis-à-vis the Board of Imex by giving the Board and auditors added comfort that a formal contract, of a certain value, would be forthcoming, this “advantage” does not rise to the level of a material or tangible economic advantage falling within the meaning of “obtain or retain an advantage in the course of business” under s. 3(1)(a) of the CFPOA.
89With respect to one of the two letters of January 8th which specified a value for the contract, I accept that this letter bolstered the documentation supporting Imex’s declaration of unbilled revenues in its financial statements, and to that extent, had the potential to advantage Imex by strengthen the appearance of its financial circumstances. However, I am not satisfied that this amounts to a material economic advantage, or that Mr. Arapakota arranged the US Trip for Dr. Kereteletswe in order to obtain this advantage.
Did Mr. Arapakota Give an Advantage or Benefit to Dr. Kereteletswe in Arranging and Making Upfront Payments for the US Trip?
a. Evidence of Arranging and Making Payments for the US Trip
90In my view, in planning and paying upfront for the US Trip, Mr. Arapakota conferred a non-trivial benefit to Dr. Keretelestwe. The outlay of money to cover the flight and hotel expenses of Dr. Kereteletswe and his family cannot be characterized as ordinary “hospitality”, as the Defence suggests.
91Banking records, [11] emails, and receipts [12] were filed, and there is no serious dispute that the following occurred:
- Mr. Arapakota reserved and paid for hotel accommodations at a Hilton Hotel in New York City from December 20 to 23, 2015; [13]
- He booked and paid for return flights departing from New York’s JFK Airport on December 23, 2015 to Orlando, Florida, returning to New York on December 31, 2015, for Mr. Kereteletswe, his wife, and their two children; [14]
- He reserved and paid for hotel accommodations at a Hilton Hotel in Orlando, Florida from December 23 to 31, 2015; [15]
- He reserved and paid for hotel accommodations at a Hilton Hotel at the JFK Airport in New York from December 31, 2015 to January 1, 2016. [16]
92Mr. Arapakota appears to have also flown from Toronto to New York on December 20, 2015 [17] and then to Orlando with Mr. Kereteletswe and his family. [18] Mr. Arapakota also booked return flights for his wife and daughter, departing from Toronto on December 24, 2015 to Orlando, Florida and returning to Toronto on December 30, 2015. [19] Mr. Arapakota returned to Toronto on January 1, 2016. [20] Dr. Kereteletswe returned to Dubai on January 1, 2016. [21]
93There were also significant expenses for shopping and food. Statements for Mr. Arapakota’s American Express Business card and a BMO Business Mastercard were filed as exhibits on the trial. [22] Original receipts for the purchases were also located during the execution of a search warrant on Mr. Arapakota’s office. [23]
94Several receipts for different New York restaurants reflect meals for a party of five people. Mr. Arapakota accepted that while he was in New York, he met with Dr. Kereteletswe and his family and they ate some meals together, which he paid for.
95The receipts also included five tickets to the National September 11 Memorial & Museum. Again, it is reasonable to infer that Mr. Arapakota paid for Dr. Kereteletswe and his family to visit the attraction.
96Among the receipts were several receipts for retail shopping at various stores in New York, including purchases at an Apple Store totaling approximately $2,000.00; purchases at a Dr. Martens shoe store totaling $448.22; and purchases at a Nike store totaling $646.31.
97Mr. Arapakota testified that he did some shopping in New York, although he could not recall specifically what he purchased. He testified that he bought a Christmas gift for his daughter at the Apple store. He denied buying any gifts for Dr. Kereteletswe or members of his family while in New York. He stated that, on one occasion, Dr. Kereteletswe’s son wanted to buy something but did not have sufficient money with him, so he made the purchase for him but was reimbursed by Dr. Kereteletswe later that day.
98There is otherwise no evidence of who received any of the other items purchased on shopping trips in New York.
99In comparison to the visit to New York, there were many more purchases made on Mr. Arapakota’s credit cards in Orlando. I need not recite all the purchases that were made, but they included purchases at a Calvin Klein clothing store totaling $745.04; five tickets to the Kennedy Space Station for $266.25; and purchases from the gift shop at the Kennedy Space Station totaling $207.92; a car rental at the Orlando airport in the amount of $1,121.85; hundreds of dollars for sunglasses at the Sunglass Hut; and shopping at several outlet clothing and shoe stores.
100There were also numerous meal receipts for a party of five and various receipts for smaller purchases of food items, cosmetics and sundry items, and souvenirs.
101Again, the Florida receipts do not disclose who received any of the items purchased, but it can be inferred that at least some of the expenses were incurred on behalf of Dr. Kereteletswe and/or members of his family, although Mr. Arapakota’s family was also present in Florida. In particular, the receipts for meals for a party of five were likely for Dr. Kereteletswe and his family. Similarly, I am prepared to infer that it was Dr. Kereteletswe and his family that visited the Kennedy Space Station and made purchases at the giftshop.
102Moreover, Dr. Kereteletswe testified that, during the Orlando Trip, his children received sportswear and his wife received perfume from Mr. Arapakota as gifts, which were given after Dr. Kereteletswe and his family gifted Mr. Arapakota a number of collectibles from Botswana, including a painted ostrich egg, a flag, and several woven baskets. Mr. Arapakota also testified that his wife purchased gifts for Dr. Kereteleswe’s family while in Orlando.
103The Crown submits that it is reasonable to infer that the bulk of the retail shopping was done by Dr. Kereteletswe and his family using Mr. Arapakota’s credit cards. The Crown points to the significant amount of money spent and numerous stores visited. The Crown also points to receipts for the purchase of luggage while in Orlando and extra baggage allowance on Jet Blue airlines. The Crown argues that it can be inferred that these items were purchased so that Dr. Kereteletswe and his family could transport some or all of the items purchased.
104While I accept that it can be reasonably inferred that at least some of the receipts for meals and attractions relate to expenses incurred on behalf of Dr. Kereteletswe and his family, in the absence of evidence that the retail purchases were made by, or for, Dr. Kereteletswe and/or members of his family, I am not able to infer that the purchases were made for him and his family.
105There is uncontroverted evidence that Mr. Arapakota’s family was also in Orlando. I accept Mr. Arapakota’s evidence that his wife and daughter made many purchases in Orlando. There is no evidence that the families went shopping together. There is no evidence that Mr. Arapakota gave Dr. Kereteletswe or members of his family his credit card(s) to use at their discretion.
106I do not accept the Crown’s argument that I should infer that the luggage and extra baggage allowance was for Dr. Kereteletswe and his family. While that may be possible, it is equally possible that it was Mr. Arapakota’s family that required extra luggage and baggage allowance. The suggestion that Dr. Kereteletswe needed extra luggage to transport his family’s purchases was never put to Dr. Kereteletswe, or Mr. Arapakota.
107Therefore, while I conclude that Mr. Arapakota incurred expenses, including flights, hotel, insurance, attractions, and meals for Dr. Kereteletswe in both New York and Orlando, I do not accept that the total expenses of approximately $40,000 should be attributed to costs incurred on behalf of Dr. Kereteletswe and his family. The Crown submits that the flights and hotels accounted for approximately $20,000 of the $40,000, which I accept. With or without the retail purchases, I find that the expenses Mr. Arapakota incurred for flights, hotels, meals, attractions, and insurance were significant and amounted to a material advantage for Dr. Kereteletswe.
108The Defence argues that because Dr. Kereteletswe reimbursed Mr. Arapakota for expenses he incurred on his behalf, the arrangement did not amount to a benefit or advantage for Dr. Kereteletswe. I do not agree.
109I will first comment on the evidence concerning the reimbursement. The evidence that Dr. Kereteletswe reimbursed Mr. Arapakota by paying him US$15,000 in cash at the end of the US trip is somewhat puzzling and begs the question of why Dr. Kereteletswe would have US$15,000 in his possession on the US trip, and if he did, why did he not pay for his own meals and visits to tourist attractions?
110However, I cannot entirely reject the evidence that it was more convenient that meals be charged to one bill and paid by credit card, rather than Dr. Kereteletswe carrying around cash to cover the meals and other expenses.
111Similarly, I cannot entirely discount Dr. Kereteletswe’s evidence that, from 2012 to 2018, Botswana experienced rolling electricity black outs, making it difficult to access bank accounts and that he therefore saved US$15,000 in cash to make sure that he had sufficient funds to repay Mr. Arapakota for the flights, hotels and insurance, in the event that there were electrical blackout periods once he returned to Botswana.
112I accept Mr. Arapakota’s evidence and Dr. Kereteletswe’s evidence that they had a clear understanding, before the US Trip started that they would do a reconciliation of expenses at the end of the trip and that Mr. Arapakota would be reimbursed for expenses he incurred on Dr. Kereteletswe’s behalf.
113As such, I accept that Mr. Arapakota was reimbursed in cash based on Dr. Kereteletswe’s best estimate of the costs which were incurred on the US Trip.
114That being said, the fact that Mr. Arapakota was reimbursed for some of the expenses incurred does not, in my view, mean that the arranging the US Trip did not amount to a “benefit or advantage” to Dr. Kereteletswe. First, I find that based on the receipts for hotels, flights, food, and attractions alone, it is unlikely that US$15,000 covered the total expenses incurred for Dr. Kereteletswe and his family. Moreover, Dr. Kereteletswe received a tangible benefit by having Mr. Arapakota handle all the logistics of planning the US trip, including researching flights and available hotels. On Dr. Kereteletswe’s evidence, he was unable to make those arrangements himself, in part because he did not have a personal credit card.
115As such, I am satisfied that the outlay of funds to cover the flights, hotels, food, attractions, and possibly some shopping for Dr. Kereteletswe and his family, even if Dr. Kereteletswe partially reimbursed Mr. Arapakota after the fact, is nevertheless a material or tangible benefit which was given to Dr. Kereteletswe.
116However, the fact that Mr. Arapakota gave Dr. Kereteletswe a benefit while Imex was in the process of trying to secure a contract with the GOB does not establish, on its own, that Mr. Arapakota contravened s. 3(1)(a) of the CFPOA. The act of conferring a benefit to a foreign public official forms part of the actus reus of the offence, but does not constitute a completed offence, in the absence of sufficient evidence, direct or circumstantial, to prove a nexus between the benefit given and the business dealings, as well as the necessary mens rea for the offence.
Did Mr. Arapakota Arrange the US Trip for Dr. Kereteletswe as Consideration for Official Acts Undertaken by Dr. Kereteletswe in Order to Obtain or Retain an Advantage in Business?
117The Crown submits that the only reasonable inference which can be drawn from the evidence, taken as a whole, is that Mr. Arapakota arranged and paid for the US Trip for Dr. Kereteletswe as consideration for the letters dated December 10, 2015 and January 8, 2016.
118The Crown points to the following circumstantial evidence to support its position:
The relationship between Mr. Arapakota and Dr. Kereteletswe – Mr. Arapakota had a strong working relationship with Dr. Kereteletswe which involved each doing favors and/or giving advice to the other. For example, Mr. Arapakota helped Dr. Kereteletswe explore solutions to the problem that many Botswanans do not possess personal bank accounts and credit cards by introducing him to e-Pula, a form of electronic currency. He arranged meetings between Dr. Kereteletswe and companies such as Mastercard and IBM to explore the issue further. The visit with Mastercard in June included taking representatives of the GOB to a baseball game. In addition, Mr. Arapakota and Dr. Kereteletswe had conversations about personal matters, such as family.
Dr. Kereteletswe did things for Mr. Arapakota as well. He helped him to collect payments from PSTG after the PSTG/GOB contract was cancelled. According to the evidence, he had “insider knowledge” of government business, including how to approach soliciting business from the GOB. He was Mr. Arapakota’s main, if not only, point of contact with the GOB and Mr. Arapakota was the only person at Imex who had regular contact with Dr. Kereteletswe.
The timing of the US Trip – The Crown relies on the timing of the December 10th letter and the improbability of coincidence that Mr. Arapakota and Dr. Kereteletswe were exchanging emails related to trip planning on the same day that Dr. Kereteletswe sent the letter dated December 10, 2015. To summarize the facts underpinning the Crown’s position, Mr. Arapakota sent Dr. Kereteletswe an email on December 10, 2015, enclosing the details of the hotel reservation in New York commencing December 20th, in Orlando commencing December 23rd, and back in New York commencing December 31st. Dr. Kereteletswe (or his wife) sent scanned copies of the family’s passports the same day. Mr. Arapakota forwarded the passport information on to a travel agent and requested that plane tickets be purchased for himself and four for Dr. Kereteletswe and his family from New York to Orlando. [24] That same day, he received the letter from Dr. Kereteletswe confirming the GOB’s commitment to retain Imex for the Botswana Project. The Crown submits that the timing of the letter and the trip planning leads to a strong inference that there is a nexus between the US Trip as a benefit, and the letter of December 10th.
The nature of the advantage or benefit given to Dr. Kereteletswe – The flights, hotels, insurance, food, and other expenses in New York and Orlando was a significant cost and was not a legitimate business expense. The receipts support an inference that Mr. Arapakota took Dr. Kereteletswe and his family out for dinner and attractions on several occasions in New York and Orlando. The expenditures raised concerns for Imex’s bookkeeper, Mr. Makki, who raised his concern with Imex’s auditor, Mr. Malholtra. The Crown submits that Mr. Arapakota would not have given Dr. Kereteletswe such an extravagant benefit if it was not in consideration of something Dr. Kereteletswe had done for him, or would do for him.
The situation at Imex – Imex was a modestly successful company which was in need of a significant contract for its financial health. Phase II of the Botswana Project would have been the largest contract Imex had ever had. Success with the Botswana Project would have advanced Imex’s goal to attract more international business, as well as the goal of taking the company public. The entire board and Mr. Frank were very anxious to receive a signed contract. The letters he requested were used, among other documents, in justifying Imex’s reporting of unbilled revenue in its financial statements, which would make Imex’s financial situation appear more attractive to investors. Mr. Arapakota was under significant pressure to finalize a contract between Imex and the GOB.
119I accept the Crown’s position that Mr. Arapakota and Dr. Kereteletswe had a close working relationship that was mutually beneficial, dating back to 2014 when Imex became involved in the PSTG/GOB contract as a subcontractor. Evidence was introduced at the trial which reflects that throughout 2014, Mr. Arapakota had contact with Dr. Kereteletswe or GOB staff. He attempted to arrange for members of the GOB to visit the Imex headquarters, and arranged for disbursements and visits to attractions for members of the GOB when they visited Canada. [25]
120In 2015, he arranged at least twice for Dr. Kereteletswe to visit Canada. [26] As a general matter, Mr. Arapakota benefited from having Dr. Kereteletswe as a contact with the GOB, as someone who carried a degree of influence with the Permanent Secretary and others.
121I accept that Mr. Arapakota extended himself to Dr. Kereteletswe by arranging meetings and trying to facilitate solutions to Botswana’s technological challenges in bringing e-services to its people. He acknowledged that, in late 2015, he began having discussions with Dr. Kereteletswe about logistical obstacles in implementing Imex’s software. Because Imex’s software was meant to facilitate e-services by creating platforms for on-line payments for government services, he and Dr. Kereteletswe discussed the fact that the government needed to explore solutions to address financial inclusion in Botswana. In particular, they discussed the fact that many people in Botswana did not possess credit cards and 30% to 40% of people did not possess a bank account.
122He also raised the suggestion of using the electronic currency e-Pula as a possible solution for how Botswanans could make on-line payments for government services without credit cards. He gave Dr. Kereteletswe information and materials about e-Pula and arranged for Dr. Kereteletswe to meet with representatives of Visa, Mastercard, and IBM in the United States. [27]
123I also accept that Dr. Kereteletswe made himself available to Mr. Arapakota and acted as his primary point of contact with the GOB, even after he was no longer managing the Botswana Project.
124He was an important source of information and guidance to Mr. Arapakota as Imex moved forward with its proposal in 2016, as described in the evidence of Kitsio Serumaga. Mr. Serumaga, who was hired by Imex in March or April of 2016 to assist Imex in preparing a response to a request for a quotation for the Botswana Project when it reached the stage of releasing a request for proposals (“RFP”), testified that Mr. Arapakota relied on Dr. Kereteletswe to guide Imex on how to best package the solution to address the GOB’s needs and expectations. In particular, Mr. Arapakota sought advice from Dr. Kereteletswe about any trouble spots in the proposal and the GOB’s budgetary limits/expectations. Mr. Serumaga never spoke directly to Dr. Kereteletswe but was aware that whenever he had questions or needed information for the RFP, Mr. Arapakota spoke with Dr. Kereteletswe to get the necessary information.
125He also testified that Dr. Kereteletswe, although not leading the project for the GOB, continued to guide the GOB about how to avoid losing costs already incurred on the Botswana Project in phase 1. However, to the best of his knowledge, he had no influence over the team which eventually negotiated the terms of agreement with Imex.
126I find that Dr. Kereteletswe’s involvement in Imex’s proposal process in 2016 reflected the role he played throughout his involvement with Mr. Arapakota and Imex. He was a trusted and knowledgeable advisor to Mr. Arapakota.
127Further, there is no question that securing phase II of the Botswana Project was very important to Imex’s financial stability and its future viability.
128Although Mr. Arapakota denied that Imex was in financial trouble in 2015 with regular revenue from its various projects and work that had been done in phase 1 on the Botswana Project, I find that Imex was struggling financially by 2015.
129Mr. Makki, the finance manager for Imex, testified at the trial. I found him to be a credible witness who had knowledge of Imex’s financial circumstances, given his long-standing role as the company’s bookkeeper, and who testified frankly about circumstances at Imex.
130He testified that, by 2015, Imex was experiencing financial difficulties because it did not have sufficient clients and had spent millions of dollars developing software.
131He testified that when the GOB terminated its contract with PSTG in August of 2015, Imex began making efforts to get the main contract without PSTG. He testified that Mr. Arapakota advised him in September of 2015 that the GOB wanted to create a full eportal for the Botswanan people and that there would be a big contract for implementation of the eportal.
132He testified that securing the contract with the GOB was very important to Imex because the company was trying to expand its clientele and “go international”. The expectation was that if Imex was able to secure the contract with the GOB, other countries would be interested in the product as well. He understood that the plan to improve Imex’s financial picture also included attracting new investors and taking the company public.
133Mr. Makki testified that he understood once a contract with the GOB was signed, Imex would be paid $18 million upfront. Mr. Arapakota told him that the GOB would have to pay Imex $3 million for non-performance if the contract fell through, as well as damages.
134Moreover, in 2014, financial consultant Michael Frank was hired by Imex to assist the company with marketing and sales. He raised $2 million in private funding from investors on the basis that Imex was expanding internationally and would become a publicly traded company.
135Both Mr. Serumaga and Mr. Crandall also testified that the Botswana Project was important, particularly later in 2016, when Imex began experiencing cash flow problems.
136Given Imex’s financial situation in 2015 and the significance of the Botswana Project, I accept that Mr. Arapakota was under pressure in late 2015 to secure phase II of the Botswana Project for Imex.
137The evidence of Mr. Arapakota’s relationship with Dr. Kereteletswe, the importance of the Botswana Project to Imex, Imex’s financial circumstances, and the temporal connection between the US Trip and the request for the letters is clearly relevant in assessing whether the US Trip was arranged and paid for as consideration for the letters which were requested.
138However, what inferences can be drawn about the nexus between the US Trip and the letters requires consideration not only of the general context, but of the specific circumstances which existed at the time the letters were requested.
(i) The Letter of December 10, 2015
139When put in its full context, I am unable to conclude either that the US Trip was arranged as consideration for the December 10, 2015 letter, or that in arranging and initially paying for the US Trip, Mr. Arapakota knew or intended the US Trip to be consideration for the December 10th letter.
140First, I find that the arrangements for a US Trip began well before the PPADB announced its intention to offer Imex exclusive bidding rights over phase II of the Botswana Project through the “direct appointment” procedure.
141It is uncontested that on November 26, 2015, the GOB issued an official announcement through the government Gazette announcing it was seeking approval from the PPADB to use the “direct appointment” method to engage Imex for the provision of e-government expert advising and implementation manager services. [28]
142I accept Mr. Arapakota’s evidence that when Dr. Kereteletswe came to the United States in June of 2015 for the meeting with Mastercard, [29] he told Mr. Arapakota that he was planning a visit to the United States because his children were considering applying to universities in the United States. Mr. Arapakota mentioned that his daughter attended an Ivy League school.
143In November of 2015, Dr. Kereteletswe contacted him via email to advise that he was planning a trip with his family to New York and Boston in order to visit schools in the area and attached a travel itinerary.
144Mr. Arapakota testified that Dr. Kereteletswe expressed interest in their daughters meeting to discuss schools. Mr. Arapakota testified that he already had vacation plans for his family to travel to Orlando, Florida in December. Dr. Kereteletswe then decided to change his travel plans and visit New York and then Orlando, in order for their daughters to meet each other.
145Mr. Arapakota testified that Dr. Kereteletswe asked him to make hotel reservations for him and his family so that the two families could stay together in Florida.
146Mr. Arapakota testified that, on or about November 15, 2015, he made a reservation for Dr. Kereteletswe and his family at a Best Western Hotel in Orlando, Florida because it was the best hotel he could find at a reasonable rate. Documentation was filed on the trial confirming that Mr. Arapakota received a reservation confirmation through Expedia for a stay at a Best Western Hotel in Orlando, Florida from December 21 to 28, 2015. [30]
147He testified that he later changed the reservation to a Hilton Hotel, where he collected loyalty points and made several reservations. [31]
148Dr. Kereteletswe’s evidence about the US Trip was largely consistent with Mr. Arapakota’s evidence. He testified that both of his children were academically gifted and interested in applying to schools in the United States. In August of 2015, he started to look into flights and hotels in New York because he and his family intended to visit a university in New York. He also planned to visit schools in the Boston area. He booked his travel from Botswana to New York but was having trouble making hotel bookings in New York and Boston because he did not have a personal credit card.
149In November of 2015, he reached out to Mr. Arapakota and told him he planned to visit New York and Boston with his family. He stated that Mr. Arapakota advised him that his daughter attended a prestigious school in San Francisco. Mr. Arapakota then advised him that he would be in New York in December on business and planned to vacation with his family in Orlando, Florida after the New York Trip. Dr. Kereteletswe testified that he then suggested to Mr. Arapakota that the families meet up so that their children could be introduced and discuss schools.
150On November 12, 2015, Dr. Kereteletswe purchased flights for himself, his wife, and his two children to fly from Botswana to New York, arriving on December 20, 2015. The purchase was made in Botswana. [32] On November 15, 2015, Mr. Arapakota sent him an email attaching a reservation for the Orlando Gateway Hotel from December 21 to December 28, 2015. [33] He did not recall Mr. Arapakota later changing the booking.
151Therefore, while it is true that travel documents were exchanged and plans were finalized on December 10, 2015, the discussion and planning of the US Trip occurred at a time when Mr. Arapakota could not have contemplated asking for a letter confirming that Imex had been granted exclusive bidding rights over the Botswana Project, given that Imex had no commitment from the GOB of any kind until November 26, 2015.
152Second, I accept Mr. Arapakota’s evidence that he did not know that the PPADB was considering Imex as the sole source proposal for the Botswana Project until after the PPADB made its announcement on November 26, 2015.
153Mr. Arapakota testified that when the contract between the GOB and PSTG terminated, Imex’s work also came to an end. All of Imex’s staff who were located in Botswana returned to Canada. Mr. Arapakota’s evidence that the Imex team left Botswana when the contract between PSTG and the GOB terminated was corroborated by Agal Ziskind, who testified that it was “tools up” after the PSTG/GOB contract ended and that he returned to Canada when the contract was cancelled. Similarly, Krzytopher Sobkowicz, a former employee of Imex who was called as a Crown witness, testified that he worked on the Botswana Project from September 2014 until July of 2015, when the project came to a stop and he returned to Canada.
154Mr. Arapakota testified that, at this time, he was most focused on collecting money PSTG owed Imex for work completed in phase 1.
155He stated that he had no discussions with any government official about the possibility of Imex taking over the Botswana Project and heard nothing from any government official, other than in October of 2015 when the procurement director asked him for a copy of the sub-contract between PSTG and Imex, without further explanation for why the document had been requested.
156He testified that he was unaware that the GOB intended to continue with the Botswana Project, or that the GOB was considering engaging Imex to complete phase II of the Botswana Project until he received an email from Dr. Kereteletswe advising him that the government intended to offer Imex a sole source contract for the Botswana Project. He testified that he was surprised by the news, but also felt the GOB had no choice but to offer the work to Imex, having paid $5 million for Imex’s system and another $7 million in fees to PSTG.
157There are some aspects of Mr. Arapakota’s evidence about his knowledge of the status of Imex vis-à-vis the Botswana Project after the termination of the PSTG/GOB contract which I do not accept.
158I find it is implausible that Mr. Arapakota was not at least contemplating the possibility that the GOB might continue with the Botswana Project, given the significant investment they had made in phase 1 of the project. His evidence suggesting that, in his mind, once the PSTG/GOB contract was cancelled, the Botswana Project was over (at least as far as Imex was concerned) is not credible.
159It also seems unlikely that he would have been complacent to Imex losing this important opportunity without making some effort to find out where Imex stood, in terms of future work. This was an important project for Imex.
160Finally, it is unlikely that Mr. Arapakota did not speak to Dr. Kereteletswe to inquire about what was happening with the Botswana Project after the PSTG/GOB contract was cancelled. Even if Dr. Kereteletswe was no longer managing the Botswana Project, he continued to consult with GOB officials about the Botswana Project and how to best protect the investment. Dr. Kereteletswe testified that when PSTG decided to terminate the contract with the GOB in mid-2015, although he was no longer managing the Botswana Project, he continued to consult with the Permanent Secretary about how the government could best preserve the investment it had already made in the Botswana Project (approximately $12,000,000, another $2,000,000 in procuring and services, and the investment of other resources).
161As his only significant contact with the GOB, Mr. Arapakota would have spoken to Dr. Kereteletswe about the future of the project after the PSTG/GOB contract was cancelled.
162I do, however, accept Mr. Arapakota’s evidence that he was unaware, until receiving a communication from Dr. Kereteletswe, that the GOB intended to engage Imex for phase II of the Botswana Project through its “direct appointment” procedure. There is no evidence to contradict him on this point. Rather, other evidence supports his evidence that he did not know the GOB was contemplating giving Imex exclusive bidding rights over phase II of the Botswana Project, or that the “direct appointment” procedure had been approved by the PPADB.
163Piyush Sharma, a witness called by the Defence, sat on a panel of legal advisors to the PPADB from 2017 to 2020 and gave evidence about the purpose and procedures of the PPADB in awarding government work. I found Mr. Sharma to be a credible, independent witness.
164He testified that the PPADB was set up to deal with the method of tendering and deciding competitive bids for government work. The main purpose of the PPADB is to insulate the government’s procurement process from corruption or any outside interference. There is an independent complaints review committee to address any complaints raised about the decisions of the PPADB. There is also recourse to the courts to review the decisions of the PPADB.
165He testified that the PPADB is well insulated from outside influence.
166Further, although Dr. Kereteletswe was present for the meeting in mid-September 2015 between the Permanent Secretary and a team assembled to make recommendations to the Permanent Secretary to keep the proprietary technology and protect the investment, he did not form part of the team. I accept his evidence that it was the Permanent Secretary and the President who approved the proposal to have Imex continue with the Botswana Project and that he played no role in the decision. I also accept his testimony that he had no discussions with Mr. Arapakota about the meeting with the Permanent Secretary and the President.
167Once the proposal to have Imex continue with the Botswana Project was approved by the Permanent Secretary and the President, the matter shifted to the PPADB for approval. I accept Dr. Kereteletswe’s evidence that he had no contact with the PPADB or Mr. Arapakota while the matter was under consideration before the board.
168When the PPADB approved using the direct appointment method to engage Imex, Dr. Kereteletswe testified that he called Mr. Arapakota to advise him that Imex had been approved as the sole source bidder for the contract.
169Therefore, I find that at the time that he began arranging the US Trip, the PPADB’s intentions were not known to Mr. Arapakota. I would add, parenthetically, that even if Mr. Arapakota knew or suspected Imex was being considered for phase II of the Botswana Project, the Crown does not argue that the US Trip was arranged as consideration for obtaining the GOB and/or the PPADB’s approval of the direct appointment method to engage Imex. There is no suggestion, nor is there evidence, to suggest that Mr. Arapakota arranged the US Trip as consideration for Dr. Kereteletswe undertaking actions to have Imex engaged for phase II of the Botswana Project.
170Third, I accept Mr. Arapakota’s evidence that the letter he requested and received on December 10th was a standard form letter of the type he routinely received after a government issues an announcement related to government contracts.
171I accept his evidence that once Dr. Kereteletswe advised him of the decision of the PPADB and that it was public, he found the official announcement, dated November 26, 2015, on-line in the government’s Gazette and that he expected a letter from the GOB confirming the government’s intention to engage Imex for phase II of the Botswana Project, based on the public announcement.
172I accept his evidence that it is customary, when a decision is approved, that the government issue a letter. Indeed, Mr. Arapakota received a very similar letter a year later, in December of 2016, when Imex was awarded the contract. [34]
173When he did not receive the letter, he asked Dr. Kereteletswe for a letter stating the PPADB’s decision.
174His evidence is consistent with that of Dr. Kereteletswe, that the letter was a formal acknowledgement, prepared by the Permanent Secretary’s Office, and extended as a courtesy. He testified that, as a result of discussions with the Permanent Secretary about the importance of retaining Imex’s proprietary technology, a decision was made to send Imex a letter confirming that the company had been approved to provide the services, subject to going through the PPADB’s tendering process and arriving at mutually agreeable terms.
175Dr. Kereteletswe was also asked in cross-examination why he sent the December 10th letter from his private email address, rather than his government email account. He accepted that it is not common practice to use private email accounts for official business but stated that there are instances during which the government experiences system shutdowns, necessitating the use of private accounts. He could not say whether this is what happened in this instance.
176In my view, nothing turns on the fact that Dr. Kereteletswe used a private account to send the December 10th letter to Mr. Arapakota.
177The content of the December 10th letter supports a conclusion that it did nothing more than confirm the GOB’s intention to engage Imex for the Botswana Project, a fact that had already been disclosed publicly in the GOB’s announcement in the Gazette indicating that Imex had been approved as the sole source bid through the “direct appointment” procedure. The letter [35] reads as follows:
To whom it may concern:
You may be aware that Government of Botswana (GoB) has terminated its agreement with Public Sector Transformation Group (PSTG) to (sic) e-Government services. The GoB wishes to engage Imex Systems for a period of 3 years to implement various e-services on iGov technology platform, subject to executing a mutually acceptable agreement.
The procurement process is at an advanced stage, hoping to have Imex Systems onsite by February, 2016.
Thank you.
Yours faithfully,
Dr. Ompony C. Kereteletswe Coordinator: e-Government
178It is unclear why Dr. Kereteletswe signed the letter, since he was no longer the manager for the Botswana Project. However, no evidence was elicited on this point either in examination-in-chief or in cross-examination. In addition, Dr. Kereteletswe testified that although he was no longer manager of the Botswana Project when his position within the government changed, he continued to have a role as a coordinator and therefore remained connected to the project.
179The Crown suggests that it would be illogical for Mr. Arapakota to have provided the benefit of the US Trip if it was not in consideration for something Dr. Kereteletswe had done for him. However, it is also implausible that Mr. Arapakota would have provided the benefit to Dr. Kereteletswe for a standard form letter which did nothing more than confirm the substance of what was printed in the government’s public Gazette.
180Finally, I consider the evidence of Mr. Arapakota and Dr. Kereteletswe about why the US Trip was arranged in the manner it was. The Crown argues that the evidence of Mr. Arapakota and Dr. Kereteletswe on this point is not credible and should be rejected.
181I have some reservations about Dr. Kereteletswe’s evidence that his lack of a personal credit card posed such an impediment to planning his trip to the US that he needed Mr. Arapakota to make the reservations and pay for the flights, hotels, and insurance upfront. This was not the first time Dr. Kereteletswe travelled with his family (although there is no evidence that he travelled with his family to the US prior to this occasion). Presumably, he figured out how to make his own reservations and pay for flights and hotels without the assistance of someone else making the arrangements and paying upfront.
182On the other hand, it is not implausible that Dr. Kereteletswe did not have a personal credit card, given his evidence that many people in Botswana do not possess personal credit cards and that, by and large, when he traveled it was usually on government business and was arranged through the government. His evidence on these points was not contradicted on cross-examination. The Crown points out that he was a senior government official and argues it is unlikely that he did not have a personal credit card to use for his bookings, however there is no evidence on this point, as it was not put to Dr. Kereteletswe in cross-examination.
183I also accept the evidence of both Mr. Arapakota and Dr. Kereteletswe that because the families were going to meet, it made some sense to book their travel and accommodations together. I accept their evidence that it was Dr. Kereteletswe who changed his original travel plans in order to travel with Mr. Arapakota and his family so that their daughters could meet and discuss schools.
184I am therefore unable to reject the explanation for the US Trip offered by Mr. Arapakota and Dr. Kereteletswe.
185In my view, it does not follow that simply because Mr. Arapakota asked Dr. Kereteletswe for a letter confirming the GOB’s intention to engage Imex for phase II of the Botswana Project in the same general timeframe that he was discussing and planning the US Trip, that Mr. Arapakota arranged the US Trip as consideration for the December 10th letter. Nor does it follow that because Mr. Arapakota was trying to do business with the GOB and Dr. Kereteletswe had been advising him on business matters related to the Botswana Project, that the US Trip was arranged as consideration for the letter of December 10th, or that Mr. Arapakota knew or intended for the US Trip to be consideration for the December 10th letter.
186I am also not satisfied that the evidence establishes that the December 10th letter amounted to an “advantage in business”, or that Mr. Arapakota perceived the December 10th letter to give him an advantage in business. As I have stated, the letter did nothing more than confirm information which was in the Gazette.
187Mr. Arapakota acknowledged that the value of the letter was to be able to provide some confirmation to the Board of Imex that the Botswana Project would proceed.
188However, the letter did not bind the GOB to its commitment any more than its public announcement in the Gazette did. The letter did not settle any terms of the agreement or advance Imex’s business interests in any way. In my view, it cannot be said that the December 10th letter benefited Mr. Arapakota, or Imex, in a material way, so as to constitute an “advantage in business”, real or perceived.
189For the same reasons, it cannot be inferred that Mr. Arapakota believed the December 10th letter provided him with an “advantage in business”. Imex had already obtained the GOB’s commitment to have Imex bid on phase II of the Botswana Project on November 26, 2015. As they had exclusive bidding rights, there is no basis to conclude that Mr. Arapakota believed, without more, Imex would not retain the advantage it had.
(i) The Letters of January 8, 2016
190On December 25, 2015, while Mr. Arapakota was still in Orlando with Dr. Kereteletswe, Mr. Frank sent an email to Mr. Arapakota and others noting the need to boost the company’s financial statements. Mr. Frank wished to have Imex’s auditor include unbilled revenue from future work in the company’s year-end financials.
191In an email to Mr. Frank dated December 25, 2015, Mr. Arapakota advised Mr. Frank that “Botswana agreed to give us a letter indicating the new contract value after holidays. That will make (a)uditors happy and be confident about the numbers for 2016.” [36]
192Thereafter, on January 7, 2016, Mr. Arapakota wrote an email to Dr. Kereteletswe with the subject line “Letters – Urgent Please”, requesting that he issue two letters to him, proposing specific wording for each letter. [37] He accepted, on cross-examination, that Imex’s in-house counsel, Sudha Berry, prepared draft language for the two letters. He also agreed that Ms. Berry circulated the proposed language to a distribution list that included Mr. Malhotra and Mr. Crandall, and Ms. Moscone, soliciting their input.
193The next day, on January 8, 2016, Mr. Arapakota received two letters, sent from the email account of Matshidiso Kereteletswe, Mr. Kereteletswe’s wife. [38] The letters stated, verbatim, the language suggested in Mr. Arapakota’s email of January 7, 2016.
194The first letter, [39] also dated January 8, 2016 and signed by Dr. Kereteletswe in his capacity as “Coordinator: e-Government”, and appearing on official stationery from the Republic of Botswana, read:
To whom it may Concern
This is to confirm that Government of Botswana (GoB) has terminated its agreement with Public Sector Transformation Group (PSTG) for the “Provision of eGovernment Expert Advisor and Implementation Services” with effect from 14th August 2015.
Thank you.
195Mr. Arapakota testified that the letter of January 8, 2016 which confirmed the termination of PSTG’s contract with the GOB and the GOB’s intention to retain Imex, was duplicative of the letter they had already received on December 10, 2015 and was, from his perspective, not necessary.
196The second letter, [40] dated January 8, 2016 and which Mr. Arapakota stated to Dr. Kereteletswe was “only for our board and audit purpose to approve our proposed budget”, was signed by Dr. Kereteletswe in his capacity as “Coordinator: e-Government” and appeared to be on official stationery of the Republic of Botswana. The letter read:
To whom it may Concern
We hereby confirm that the Government of Botswana intends to award and execute a software licence/maintenance and services agreement in February 2016 with Imex Systems Inc. with a total contract value of $30 million USD payable monthly over life of a three-year term.
Thank you.
197Mr. Arapakota testified that the second letter of January 8, 2016 was also unnecessary. He testified that he was strongly opposed to Mr. Frank’s proposal of including projections of $10 million of unbilled revenue for three years. He testified that, in his experience, it is ill-advised to rely on projections and expectations in the absence of a signed contract. He testified that he agreed with the philosophy of a former Chief Financial Officer, who once told him that “only cash is reality”. He testified that he wanted to go into the process of going public using projections of net income and profit without figuring in the projected unbilled revenue from the Botswana Project of $30 million over three years.
198Moreover, the $30 million figure was unnecessary for preparing Imex’s financial statements and ultimately, was not used in the quarterly and year-end financial statements, nor was it used in the investor update which was circulated in January of 2016.
199Nevertheless, he sent both letters to the executives of Imex via email and wrote that Dr. Kereteletswe hoped the contract would be signed by January 9th.
200Mr. Arapakota testified that his only purpose in asking Dr. Kereteletswe for the letter dated was to get Mr. Frank to stop “harassing” him and Ms. Berry for a letter which specified a value to the contract. He testified that the letters served no other function.
201Mr. Arapakota testified that asking Dr. Kereteletswe for the letters on January 8, 2016 had nothing to do with arranging the US Trip or purchases made on the US Trip. There was nothing special, unusual, or secret about the letters.
202Turning to the first of the January 8, 2016 letters, it cannot be inferred, in my view, that the US Trip was arranged as consideration for this letter. The letter does no more than confirm information already provided in the December 10, 2015 letter and which was otherwise available in the public domain. It is implausible that Mr. Arapakota spent time and money on the US Trip in consideration of Dr. Kereteletswe providing this letter, given its content. Nor did this letter give assist Mr. Arapakota in obtaining or retaining an advantage in business.
203With respect to the second letter of January 8, 2016, the Crown submits that it can be inferred, based on the evidence, that Mr. Arapakota arranged and paid for the US Trip, and continued to spend money on Dr. Kereteletswe while on the US Trip, because he needed a document which stated the value of phase II of the Botswana Project.
204The Crown points to the fact that Mr. Frank was pressuring Mr. Arapakota to boost Imex’s financial statements by including, as unbilled revenue, the value of phase II of the Botswana Project. A strong valuation of the Botswana Project would allow Imex to show profitability in its financial statements, which would assist in the endeavor to take Imex public. The Crown argues that it can be inferred that Mr. Arapakota arranged the US Trip for Dr. Kereteletswe in order to obtain this letter and advance his business interest in taking Imex public.
205I accept, based on the evidence, that by late 2015, there was pressure on Mr. Arapakota to boost the company’s financials.
206Mr. Makki testified that there was a lot of tension between Mr. Arapakota and the Imex Board about the need for a significant contract in order to show a positive balance sheet. In particular, Mr. Frank was concerned about Imex’s financial status for the third quarter of the fiscal year and that he wanted to include unbilled revenue in the financial statements.
207Mr. Arapakota and Mr. Frank had an acrimonious relationship, stemming from Mr. Arapakota initially resiling from his agreement to take Imex public. In August of 2015, Mr. Arapakota advised Mr. Frank and others via email that he was not happy that Mr. Frank told investors that the company would go public without having first obtained the board’s approval, and that he had changed his mind about taking Imex public. [41] Mr. Saltsman and his holding company, Baba Capital Inc., then threatened to sue Mr. Arapakota. [42] In October of 2015, the parties settled the litigation and an agreement was again reached to take Imex public. [43]
208In numerous email communications in October and November of 2015, Mr. Frank wrote to Mr. Arapakota and others to express concern about Imex’s financial statements for the third quarter and expressed his view that Imex’s financial picture needed to be boosted by including unbilled revenue in the financial statements. [44]
209Recognizing that Mr. Frank (and to a lesser extent, the Board) were putting pressure on Mr. Arapakota to boost the “bottom line” figures with the Botswana Project, there are several points within the evidence which do not support the inference that Mr. Arapakota arranged the US Trip as consideration for getting a letter with a valuation.
210First, there is no evidence that, prior to arranging the US Trip, Mr. Frank or anyone asked or told Mr. Arapakota to get a letter from Dr. Kereteletswe setting out the value of the contract. There were discussions of boosting the numbers, but nothing more specific than that. The issue of getting a letter from Dr. Kereteletswe arose as a result of Mr. Frank’s email on December 25, 2015, well into the US Trip.
211Second, there is also no evidence upon which it can be inferred that, at the time of planning the US Trip, Mr. Arapakota believed a letter specifying the value of the contract was necessary, either for Imex’s financial reporting or for taking the company public.
212With respect to taking the company public, I accept Mr. Arapakota’s evidence that he was not in favour of taking Imex public, which was corroborated by Mr. Makki’s testimony. His evidence is also supported by the evidence that his hesitation to take the company public caused great discord within Imex and resulted in Mr. Saltsman commencing a lawsuit against him until the matter was settled.
213In terms of financial reporting, I accept his evidence that he was opposed to “boosting” the bottom-line figures in the financial statement by including the value of the phase II work on the Botswana Project as unbilled revenue. He stated his position in an email to Mr. Makki on November 18, 2015, in which he stated, “I just do not want to boost up any figures. Let us stick to what we said.” [45]
214Moreover, the credibility of his evidence that, in his mind, the letters were not necessary for Imex’s financial reporting is bolstered by the evidence of Imex’s auditors, Mr. Crandall and Mr. Malholtra.
215While both Mr. Crandall and Mr. Malholtra testified that the January 8, 2016 letters were included in a package of documentation to support the reporting of Imex’s unbilled revenues and helped to justify the figures, both also testified that the letter was unnecessary and that unbilled revenues could have been declared without the letter.
216Mr. Crandall testified that the letter, together with the announcement in the GOB Gazette was the main support for reporting the unbilled revenue associated to the Botswana Project, in the absence of a signed contract. He testified that without a letter, Imex would have needed to estimate the amount of unbilled revenue arising from the anticipated work on the Botswana Project. With a letter specifying the value of the contract, reporting Imex’s unbilled revenues related to the Botswana Project was more “concrete”.
217In cross-examination, he testified that showing profit was not necessary in order for Imex to be taken public. He also accepted that with input from Mr. Arapakota about the work being done in Botswana, together with the Gazette announcement dated November 26, 2015, and the letter dated December 10, 2015, there was support for reporting unbilled revenues in Imex’s financial statements. He testified the letter of January 8, 2016 was not necessary to report unbilled revenues, but that it helped justify the figures reported.
218Mr. Malhotra also testified that the letter of January 8, 2016 was one of several documents provided to him to support Imex’s reporting of revenue in its financial statements. He testified that the letter of January 8th, on its own, would not carry much weight in supporting Imex’s reporting of unbilled revenues and that, without the letter, the auditing team still had other documents to rely on in justifying the revenue figures. He further testified that having a dollar value for the contract specified in the letter of January 8, 2016 gave some comfort in showing Imex’s revenues, but that neither the letter of January 8th nor the letter of December 10th were of much assistance in supporting the financial statements. He testified that the financial reporting could have been done without the letter of January 8, 2016.
219Finally, the evidence supports an inference that it was Mr. Frank, not Mr. Arapakota, who was pushing to boost Imex’s financials and who wanted something in writing to satisfy investors’ concerns about Imex’s financial state. Notwithstanding Mr. Frank’s efforts to downplay the consequences to him personally if Imex did not go public, it is clear from the evidence that once Imex had spent all of the $2 million he raised from private investors, there was pressure on him from investors to see their investment show returns. His professional reputation was at stake. Mr. Crandall testified in cross-examination that it “would be standard” for Mr. Frank to be anxious about showing profit.
220I find, based on the totality of the evidence, that Mr. Frank attached importance to boosting the financials, not Mr. Arapakota.
221When taken together, the evidence does not support an inference that Mr. Arapakota arranged and paid for the US Trip as consideration for either of the January 8th letters.
222Further, the evidence does not support an inference that Mr. Arapakota perceived the January 8th letters as something which would assist him in obtaining or retaining an advantage in business. The figure set out in the letter reflected Imex’s financial proposal which would be put before the PPADB in the tendering process. The figure was known to those involved in the bidding process.
223Mr. Serumaga, who was hired by Imex in March or April of 2016 to assist Imex in preparing a response to a request for a quotation for the Botswana Project when it reached the stage of releasing the RFP, testified that a figure for a financial bid is determined by estimating hours, labour, parts, travel costs, and supplies for implementing a project. Imex obtained quotes from all its subcontractors. The pricing of Imex’s software was set at Mr. Arapakota’s discretion. He testified that he received information that if Imex set its bid at approximately $30 million over three years, the bid would be within an acceptable range.
224It is reasonable to infer, based on Mr. Serumaga’s evidence, that Dr. Kereteletswe played a role in Imex arriving at the figure of $30 million for the bid. Mr. Serumaga testified that Mr. Arapakota sought advice from Dr. Kereteletswe about any trouble spots in the proposal and the GOB’s budgetary limits/expectations.
225That being said, the ultimate determination of whether the GOB would agree to Imex’s proposal was determined in the “two-envelope” process of the PPADB. Mr. Arapakota, and Imex, did not gain an advantage, in terms of securing a signed contract with finalized terms and values, by getting a letter, nor could Mr. Arapakota have perceived there to be a business advantage in getting the letter, knowing that the decision would be made through the “two envelope” process. Indeed, as Mr. Seramuga testified, Imex’s initial bid of $30 million was rejected by the GOB. Once negotiations resumed later in 2016, the GOB and Imex agreed on a bid of approximately $15 million.
226The letters also did not serve to give Mr. Arapakota an advantage vis-à-vis his own company, and its ability to go public, for the reasons I have already stated, nor do I find that Mr. Arapakota believed the letters would serve an advantage in the course of his business.
Conclusion
227Assessing the evidence in its totality, I am not satisfied that the Crown has established each element of the offence under s. 3(1)(a) of the CFPOA beyond a reasonable doubt. The evidence of Mr. Arapakota and Dr. Kereteletswe leaves me in reasonable doubt on several elements of the offence. Specifically, I am left in reasonable doubt that the benefit of the US Trip was conferred “as consideration” for the letters provided, and/or that the benefit was conferred in order for Mr. Arapakota to obtain or retain an advantage in business: R. v. W.(D.), [1991] 1 SCR 742.
228There are other reasonable inferences, inconsistent with guilt, that arise from the evidence. As stated in R. v. Villaroman, 2016 SCC 33, [2016] 1 S.C.R. 100, at para. 20, where proof of one or more elements of the offence depends exclusively or largely on circumstantial evidence, a trier of fact must be careful about too readily drawing inferences of guilt. An inference of guilt drawn from circumstantial evidence should be the only reasonable inference that the evidence permits.
229That is not to say that Mr. Arapakota actions were purely altruistic, or that he did not have his own interests in mind when he arranged the US Trip for Dr. Kereteletswe. It is possible, and even probable, that Mr. Arapakota arranged the US Trip in the hopes of keeping Dr. Kereteletswe motivated to assist Imex, in whatever way he could, in securing the contract for work on phase II of the Botswana Project.
230Whether this conduct might fall within the scope of s. 3(1)(b) of the CFPOA, given the arguably broader scope of conduct it captures, is beyond the scope of the issues to be decided in this case, as Mr. Arapakota was not charged with an offence under s. 3(1)(b) of the CFPOA.
231However, the quid pro quo requirement under s. 3(1)(a) requires proof of a link between the advantage given to a public foreign official and a specific act (or omission) undertaken by the public foreign official. In my view, there is an insufficient link between Mr. Arapakota arranging the US Trip and Dr. Kereteletswe providing the three letters. A temporal connection, and the fact that the letters were generally helpful to Mr. Arapakota and Imex, does not establish the element of “as consideration for” specified in s. 3(1)(a) of the CFPOA. Further, the evidence does not establish that Mr. Arapakota perceived the letters as giving him an advantage in business, such that it can be inferred that the letters were obtained in order to obtain or retain an advantage in business.
232For these reasons, I find Mr. Arapakota not guilty.
R. Maxwell J.
Released: March 7, 2023