Pacific Consultants International of Japan has allegedly spent about 100 million yen (S$1,270,347) a year since 1990 to win contracts in Southeast Asia for government projects funded by official development assistance from Japan, The Yomiuri Shimbun has learned.

PCI, a Tokyo-based major consulting firm, is at the center of a bribery scandal in connection with a government ODA project undertaken in Vietnam.

In the Vietnam scandal--unlike many other ODA projects in which PCI allegedly paid gratuities to local government officials via local agents--the chief and other PCI officials based in Ho Chi Minh City allegedly directly handed money to the head of the city's project supervisory authorities. The money allegedly was handed over directly because PCI had not established a middleman in Vietnam.

According to sources close to PCI, the consulting firm found its way into Southeast Asia in the 1970s. Around 1990, it started spending about 100 million yen ($925,369) a year to win ODA-related contracts in the region, the sources said.

Such funds were pooled at PCI's head office in Tama, Tokyo, the sources said, adding the funds were carried in cash by PCI officials to local offices in Vietnam, the Philippines, Thailand and Indonesia.

"We gave top priority to Southeast Asian countries because there were many ODA-related projects there. [Those projects] provided the most profit for PCI," a former PCI executive said.

There were two ways PCI allegedly paid bribes to local government officials--directly, by local PCI officials, and through local agents.

In view of the fact that PCI was investigated in 2002 in connection with an alleged illegal bid for a construction project on the Russian-held Kunashiri Island off eastern Hokkaido and the revelation in the same year of a bribery case involving an employee of Mitsui & Co., a major trading house, who was suspected to have given a bribe to a Mongolian government official, PCI studied new ways of bribing local government officials, the sources said.

As a result, PCI reportedly established a company headed by one of its former executives in Hong Kong, through which it remitted money to local offices. Local PCI officials stopped the conventional practice of handing bribes directly to local government officials and instead switched to using local agents.

However, there were no local agents available in Vietnam partly because ODA to that country was suspended from 1980 to 1991 following the Vietnamese military's invasion of Cambodia. Because of this situation, PCI handed money directly to local government officials connected with ODA-related projects in Vietnam, the sources said.

In exchange for winning consulting contracts in 2003 and 2006 for trunk road construction projects in Ho Chi Minh City, PCI is suspected to have given a total of about 90 million yen($832,445) to the head of the city's project supervision office.

A former PCI executive and the head of PCI's local office are suspected of giving the bribes.

"It was common practice to give bribes to government officials in ODA recipient countries, so we had to come up with a slush fund," a former PCI official said.