Tags: alstom | fine | bribery | power plants

Alstom to Pay Record $772 Million in US Bribery Settlement

Monday, 22 Dec 2014 12:18 PM

Alstom SA pleaded guilty and agreed to pay a record $772 million to end a U.S. Justice Department investigation into bribes paid to win power-plant contracts in Indonesia and other countries.

The fine is the largest criminal penalty paid to the Justice Department under the Foreign Corrupt Practices Act. Investigators had to build their case using informants and recorded phone calls when the French company refused to cooperate at first, prosecutors said.

Alstom Chief Executive Officer Patrick Kron said on Dec. 19 that the Levallois-Perret-based company will pay the fines connected to its energy businesses as its shareholders voted in favor of their sale to General Electric Co. Earlier, Alstom had said GE would assume the liabilities. The Fairfield, Connecticut-based manufacturer agreed in June to buy most of the assets for 12.4 billion euros ($15.2 billion), GE’s biggest acquisition ever, and the purchase should close next year.

“Alstom’s corruption scheme was sustained over more than a decade and across several continents,” said U.S. Deputy Attorney General James Cole in a statement. “It was astounding in its breadth, it’s brazenness and its worldwide consequences.”

The U.S. settlement won’t resolve corruption investigations by the U.K. and Brazil, and Alstom’s transportation businesses have also been targeted.

The U.K. Serious Fraud Office also charged Alstom Power Ltd. today for bribing agents in connection with contracts in Lithuania over an eight-year period. The SFO charged another Alstom unit, Alstom Network UK Ltd., in July with corruption in relation to transport projects in India, Poland and Tunisia.

The U.S. probe has centered on a $118 million contract to provide boiler services at a power plant in Tarahan, on the southern coast of Sumatra. Alstom executives, together with Marubeni Corp., a Japanese commodity-trading company, used middlemen to funnel hundreds of thousands of dollars to a member of Indonesia’s parliament and officials at Perusahaan Listrik Negara PT, a state-controlled electricity company known as PLN, according to court papers filed by the Justice Department in related cases.

Alstom pleaded guilty to two charges, one for violating bribery laws by falsifying records and the other for failing to have adequate controls, in Connecticut federal court.

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Alstom SA pleaded guilty and agreed to pay a record $772 million to end a U.S. Justice Department investigation into bribes paid to win power-plant contracts in Indonesia and other countries.
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2014-18-22
Monday, 22 Dec 2014 12:18 PM
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