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Irregularities in a Royal Dutch Shell tender process

By John Donovan

It is interesting to read the current articles (1) (2) from the Brunei Times highlighted by a contributor to our Shell Blog. They concern allegations of irregularities in a Shell tender process.

Some years ago I stumbled across evidence in Shell’s own internal documents of a rigged contract tender process involving several Shell executives, led by Andrew Lazenby, a then Shell National Promotions executive. I was in the process of suing Shell in the High Court for the fourth time (Shell had already settled the first three cases) when I found the amazing array of evidence in discovery documents supplied by Shell. All of the cases involved the same Shell executive, Andrew Lazenby. All involved IP theft by Shell. The company settled all four claims and paid all legal costs, said to be over a £1 million in respect of the last case.

Lazenby was also a bungler. Two of the promotions secretly produced by Shell without our knowledge or consent and launched by Shell on a national basis, were potentially fatally flawed due to being insecure. Shell staff could potentially identify and remove winning game pieces before they were given out to drivers on Shell forecourts.

THE SHELL SMART CONTRACT TENDER SCAM

PDF file containing selective extracts from cross-examination of retired Shell Executive Frank Leggatt regarding a rigged contract tender for the SMART scheme masterminded by Shell executive Andrew Lazenby, in a conspiracy involving several Shell managers, some of whom still hold senior positions at Shell. The objective was to steal information from several companies lured into confidentiality agreements under false pretenses.

Witness Statement of Mike McMahon, the CEO of one such company, Concept Loyalty Limited.

*RELATED APPROACH LETTER TO Mr McMahon dated 19 March 1999 DETAILING THE DOCUMENTARY EVIDENCE FOUND IN SHELL’S MOUNTAIN OF “DISCOVERY” DOCUMENTS

*Includes examples of two items listed in the letter: (1) a handwritten note dated 23 October 1992 by Shell Manager Andrew Lazenby circulated to his management colleagues notifying them of his intention to deceive companies in the tendering process for the multimillion pounds SMART scheme by keeping them holding as long as possible when in fact he had already decided to reject them (2) a standard letter dated 27 October 1992 subsequently sent by him to Mr McMahon (and other “rejects”) pretending they were ALL still in contention. Lazenby requested considerably more information on the false premise that they were still in the running for a multi-million pounds contract. This caused considerable time and expense to be incurred by all the “reject” companies involved. They were enticed into supplying Shell with commercially valuable information. It was a carefully planned con trick on the part of Shell management.

On the same date, 27 October 1992, Mr Lazenby sent letters to the two companies he had short listed – the sole runners left in the race as Mr McMahon put it, Geoff Howe & Associates and Senior King Limited. Lazenby requested more information from them before ultimately awarding the contract to “Option One”, a company which was NOT IN THE TENDERING PROCESS or as Mr McMahon described it, a horse which was not even running in the race.

Option One was the same company to whom Andrew Lazenby funneled all of our confidential proposals – he had a close personal relationship with Option One directors outside of business activities.

In a Typewritten confidential “SHORTLIST SELECTION RATIONAL” dated 28 October 1992 circulated by Andrew Lazenby to his managerial colleagues, Tim Hannagan and David Watson (both still at Shell), Lazenby provided a “Listing of reasons for rejection” as per his handwritten note of 23 October 1992. It is further proof of double dealing with Lazenby rubbishing the four companies who he had decided to reject, but had written to the previous day pretending otherwise, to “keep rejects holding as long as poss” as per the same handwritten note.

In his Witness Statement, Tim Hannagan confirmed the shortlist process, with what Hannagan described as “the players” being first listed, then “narrowed down” to a shortlist of six, then two, before the remaining “players” were also rejected in favour of Option One, the company enjoying a special relationship with Andrew Lazenby which, was never a participant in the tender. It is notable that in his Witness Statement, Hannagan tried to distance himself from the actions of Andrew Lazenby. He should have disassociated himself at the time from the rigged process.

Several months later, Lazenby was still conspiring with his immediate boss, David Watson, on how to keep Mike McMahon and his company holding on. This is self-evident from a draft letter addressed to Mike McMahon dated 4 May 1993, which Lazenby sent to David Watson (“DW”) for comment, prior to it being mailed. It contained suggested amendments and an additional clause. Lazenby asked McMahon to put Shell in “as the exclusive petrol retailer” in “your smardcard loyalty scheme”. Lazenby stated that “Final commitment” would depend on positive results after extensive consumer testing. The implication being that a commitment had been made, but not a “Final commitment.”

McMahon and his company must have been overjoyed at the news, but were unaware that on the same day, 4 May 1993, Lazenby also sent an email to several Shell colleagues, including David Watson, discussing the sharing out of roles on the “blossoming” Shell SMART project. Shell had not the slightest genuine intention of moving forward with the scheme offered by McMahon. In the email to his Shell colleagues, Lazenby described himself as “machiavellian.”

Some definitions of “machiavellian”:“cunning and unscrupulous: using clever trickery, amoral methods, and expediency to achieve a desired goal”; “Suggestive of or characterized by expediency, deceit, and cunning.“; “using clever but often dishonest methods which deceive people..”:

Some synonyms: plotting; deceitful; sly; cunning; calculating; insidious; unscrupulous; wily; underhanded; contriving; artful; devious

How apt and appropriate given the circumstances.

Lazenby and his colleagues deliberately conned innocent smaller companies to invest time and money and disclose proprietary information, all under false pretenses, after the decision had already been made not to use them.

The mind set of Lazenby is evident from an incriminating email relating to the Shell SMART multi-partner loyalty card project which he circulated to Shell managerial colleagues.

Extract: “NB: To answer your last point: My note of 25/10 is the official position, my note of 9/9 expressed a personal and pragmatic view of how to handle the problem – it is in fact illegal and is certainly unofficial, and if we were discovered then we will enforce the official legal position – which is that all volume must currently be rewarded with promotional points”.

Companies in a tender process for a SMART loyalty card contract were deliberately drawn into confidentiality agreements supplied by Pamela Marsh who worked for Richard Wiseman in the legal department. Proprietary information was extracted from the companies under false pretenses and they were held back from approaching other oil companies in the belief they were still in the running for the SMART contract, when in fact, the decision had already been made to reject them from the tender.

The Smart contract was miraculously awarded to an agency – Option One – which I stress again had not even run in the contract race. As indicated, Lazenby had a close private relationship with senior directors of Option One. His diaries revealed that he also had an offshore bank account in the Channel Islands (Jersey). As far as we could tell, all confidential ideas disclosed to Lazenby and subsequently adopted by Shell were channeled to Option One. This included a series of proposals we put to Lazenby including a rerun of the Shell Make Money game we had devised for Shell and held joint rights with Shell.

Never guessing that his hand-written diary entries would be exposed to scrutiny in a High Court case, Lazenby made entries which revealed that he was a disgruntled employee and was intent to “Set up personal business while @ Shell 35 yrs = exit date.” It was his apparent objective to exploit his position to create enough personal wealth to exit Shell at the age of 35.

Despite his lack of integrity, Andrew Lazenby was given full backing from the highest levels of Royal Dutch Shell senior management, including Malcolm Brinded and Mark Moody-Stuart, even though the evidence of his conniving and unscrupulous predatory treatment of smaller companies was brought to their attention.

That should tell you all you need to know about Shell senior management support for Shell’s claimed business principles, which supposedly includes honesty, integrity, transparency, and respect for people, in all of Shell’s dealings. Pure propaganda BS in our experience.

Detailed information about the SMART contract scam is contained in the article ALARM BELLS RING OVER TENDERING FOR ROYAL DUTCH SHELL CONTRACTS

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