Wednesday, September 27, 2023
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Alstom Owes $772M for Global Bribery Scheme

(CN) - Bribes in Indonesia, Saudi Arabia, Egypt, the Bahamas and Taiwan will force French power and transportation company Alstom S.A. to pay a record-breaking $772.29 million fine in the United States, the Justice Department said Monday.

Prosecutors call it the largest fine for violations of the Foreign Corrupt Practices Act (FCPA), which punishes bribes by U.S. companies overseas.

Alstom pleaded guilty in Connecticut to two counts of violating the FCPA by falsifying its books and failing to implement internal controls, prosecutors say.

Swiss subsidiary Alstom Network Schweiz AG also copped to a criminal information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA.

U.S.-based subsidiaries Alstom Power, from Windsor, Conn., and Alstom Grid, from New Jersey, acknowledged conspiring to violate the FCPA, and entered into deferred prosecution agreements.

Alstom's bribes to a high-ranking Indonesian official and members of that country's state-owned electricity company, Perusahaan Listrik Negara, alone reaped contracts worth roughly $375 million, prosecutors say.

They say Alstom paid more than $75 million to secure $4 billion in projects around the world, with a profit to the company of approximately $300 million.

Deputy Attorney General James Cole noted that the pleas end a spree "sustained over more than a decade and across several continents."

"It was astounding in its breadth, its brazenness and its worldwide consequences," Cole said in a statement. "And it is both my expectation - and my intention - that the comprehensive resolution we are announcing today will send an unmistakable message to other companies around the world: that this Department of Justice will be relentless in rooting out and punishing corruption to the fullest extent of the law, no matter how sweeping its scale or how daunting its prosecution."

Discovering the scheme meant figuring out the identities of code-named "consultants" whom Alstrom the company hired "as conduits for corrupt payments to the government officials," prosecutors say.

Internal Alstom documents allegedly refer to some of these consultants by such pseudonyms as "Mr. Geneva," "Mr. Paris," "London," "Quiet Man" and "Old Friend."

Alstom released a statement from its CEO Patrick Kron promising the company will turn a corner.

"There were a number of problems in the past and we deeply regret that," the statement quotes Kron as saying. "However, this resolution with the DOJ allows Alstom to put this issue behind us and to continue our efforts to ensure that business is conducted in a responsible way, consistent with the highest ethical standards."

Connecticut-based U.S. Attorney Michael Gustafson hailed what he called the "historic resolution" of the case as "an important reminder that mandate to stamp out corruption does not stop at any border, whether city, state, or national."

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