US DOJ joins corruption probe into Garuda’s CRJ1000 deal

The United States Department of Justice has requested documents from Bombardier Aerospace concerning the sale of eighteen CRJ1000s to Garuda Indonesia (GA, Jakarta Soekarno-Hatta) in 2011 and 2012, a transaction which is already under investigation by the UK Serious Fraud Office (SFO), Reuters has reported. Bombardier told the news agency that it “knew nothing about this” until the SFO began its proceedings in late 2020. The Canadian manufacturer has since launched an international audit, which has thus far not revealed any wrongdoing. “So far we’ve been looking at it since the SFO reached out and now the DOJ is reaching out but you know on our side we haven’t found anything. But we will definitely continue to collaborate,” Chief Executive Eric Martel said. Garuda Indonesia acquired the 18 regional jets between 2012 and 2015. It has been trying to retire them for a number of months, citing their poor fit for the Indonesian domestic market. In February 2021, Chief Executive Irfan Setiaputra announced a unilateral return of all twelve aircraft of the type dry-leased from Nordic Aviation Capital, as well as the imminent grounding of the six aircraft under a financial lease from Export Development Canada. The lessor has since challenged the decision which it said, it was not consulted on. Irfan cited the ongoing SFO investigation as proof that the selection of the CRJ1000s a decade ago entailed a breach of law, thus giving the carrier the right to abrogate the leases. However, the SFO has so far not disclosed any wrongdoing concerning the choice of the regional jets. In 2020, the SFO, together with authorities in France and the United States, entered into a deferred prosecution agreement with Airbus imposing a USD4 billion fine on the manufacturer for a number of corruption cases, including during aircraft procurement by Garuda. Former Garuda CEO Emirsyah Satar, who led the company during the CRJ selection process, was sentenced in May last year to eight years imprisonment for corruption related to other procurement proceedings. Bombardier Aerospace has since sold the CRJ programme to MHI RJ Aviation.