Alstom agrees to pay US$772 million to US for bribing foreign officials
French power company, which has agreed to pay US$722m fine, tried to buy influence in Taiwan, Indonesia, Saudi Arabia, Egypt, the Bahamas
PUBLISHED : Tuesday, 23 December, 2014, 11:31am
UPDATED : Wednesday, 24 December, 2014, 6:39am
Bloomberg in Washington
Alstom pleaded guilty on Monday to violating America's Foreign Corrupt Practices Act. Photo: AP
Alstom, a French power company hit with a record US fine for corruption, won billions of dollars worth of business in Saudi Arabia by making at least US$49 million in illegal payments in part through middlemen the company called "Mr Paris" and "Quiet Man".
The bribes were among those Alstom made in five countries over more than 10 years, prosecutors in Washington said. Alstom pleaded guilty to those charges on Monday and agreed to pay US$772 million to end the investigation, representing the largest criminal penalty paid to the Justice Department under the Foreign Corrupt Practices Act.
The prosecutors' statements, laid out in charging documents contained new details about Alstom's attempts to buy influence in Egypt, Saudi Arabia, Taiwan and the Bahamas.
The documents also covered bribery in Indonesia, which had already served as a basis of criminal charges against former Alstom executives and business partner in court in Connecticut.
The US corruption case is one of several against Alstom, which General Electric is buying in its biggest acquisition ever. GE agreed in June to buy most of Alstom's assets for €12.4 billion (HK$117.64 billion) and the purchase should close next year.
Earlier on Monday, Alstom's London-based power unit and two of its employees were charged by Britain's Serious Fraud Office for alleged bribe payments made in Lithuania. Lawyers for the men declined to comment at the hearing. Alstom is also facing a corruption investigation in Brazil.
The documents released by the Justice Department outlined how Alstom paid more than US$75 million in bribes between 2000 and 2011 to win US$4 billion in projects from state-owned companies, relying on consultants who prosecutors said funneled those payments to officials in five countries.
"Alstom's corruption scheme was sustained over more than a decade and across several continents. It was astounding in its breadth, its brazenness and its worldwide consequences," US Deputy Attorney General James Cole said in Washington.
"There were a number of problems in the past, and we deeply regret that," Patrick Kron, Alstom's chief executive officer, said in a statement. The company has changed its compliance practices, he added.
In Saudi Arabia, where Alstom was seeking US$3 billion in contracts, company executives spread bribe money among a half a dozen consultants around the turn of the millennium, prosecutors wrote. These people were identified, in company documents, by code names that also included "Mr Geneva" and "Old Friend".
Alstom collected details on officials of the country's state-owned electric company to improve its chances of securing business, prosecutors wrote.
"Honest reputation," read a January 2000 "action plan" by Alstom for an upcoming bid, referring to one official who it said had a majority voice in awarding contracts. "Son has been known to deal." To ensure the official's support, Alstom turned to one of his relatives, who internal company documents referred to as Mr Paris, who was paid US$4 million to bribe the official, prosecutors said. Alstom made US$2.2 million in donations to a US-based Islamic education foundation associated with the official.
On Monday in the Connecticut federal court, Alstom pleaded guilty to two charges related to its activities in five countries. Alstom's Swiss subsidiary pleaded guilty to conspiracy. Two US subsidiaries entered into deferred prosecution agreements.
