Alstom Near 700 Million US Settlement in Bribery Case

Alstom Near $700 Million US Settlement in Bribery Case

French industrial giant Alstom has agreed to pay $700 million to settle U.S. corruption charges related to bribes in Indonesia and other countries.

NEW YORK — French industrial giant Alstom (IW 1000/161) has agreed to pay $700 million to settle U.S. corruption charges related to bribes in Indonesia and other countries, a person familiar with the matter said Tuesday.

The settlement, to be announced next week, comes as U.S. conglomerate General Electric (IW 500/7) prepares to complete a deal to buy key Alstom assets.

The U.S. Department of Justice has accused Alstom under the Foreign Corrupt Practices Act (FCPA) of bribing officials in Indonesia to win the $118 million Tarahan energy contract in the early 2000s in Indonesia. 

Alstom partnered with Japanese firm Marubeni, which in March pleaded guilty to conspiracy to violate the FCPA and was sentenced to pay an $88 million U.S. criminal fine.

Besides Marubeni, three former Alstom officials have pleaded guilty to FCPA violations in the case, while a fourth awaits trial.

The settlement was hinted at earlier this month by U.S. Assistant Attorney General Leslie Caldwell, who said on December 4 that executives from Marubeni and Alstom "engaged in a multiyear scheme to pay millions of dollars to a high ranking member of the Indonesian Parliament and other officials" in exchange for the Tarahan contract. 

"We are actively continuing to investigate and anticipate additional law enforcement actions in the near future," states a transcript of Caldwell's remarks at an Organization for Economic Cooperation and Development event in Paris to launch a report on bribery.

Email Trail

U.S. officials have said emails show the conspirators hired two "consultants" in the Tarahan scandal, employing a second to bribe Indonesian officials because they were doubtful the first would succeed in winning Tarahan.

Caldwell said the U.S. was working with officials in Switzerland, Britain and the World Bank on Alstom corruption matters. 

In July, Britain's Serious Fraud Office said it had launched criminal proceedings against an Alstom unit over alleged corruption in India, Poland and Tunisia.

In February, officials in Brazil indicted 11 people in a case in which Alstom is alleged to have paid $10 million in bribes to obtain contracts with the Sao Paulo metro.

In 2011, a subsidiary of Alstom was fined $42.7 million by Swiss authorities to address bribery charges in Latvia, Tunisia and Malaysia.

The impending Alstom settlement is bigger than a $450 million agreement between the DOJ and Siemens in 2008 to settle FCPA charges the German company bribed officials in several countries.

The settlement would remove a hurdle to GE's deal to buy most of Alstom's energy assets for 12.4 billion euro ($15.5 billion).

The deal is a centerpiece of GE chief executive Jeffrey Immelt to make industrial operations a bigger portion of the conglomerate's earnings stream and to reduce the impact of finance units.

Alstom shareholders are scheduled to vote on December 19 on the GE deal. The deal is expected to close in the middle of 2015.

Copyright Agence France-Presse, 2014

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish