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French power company to pay $772M to US in bribery case

December 22, 2014

WASHINGTON (AP) — A French power and transportation company has agreed to pay $772 million to resolve allegations that it bribed high-ranking foreign government officials for lucrative projects, the U.S. Justice Department said Monday.

Federal prosecutors said Alstom S.A. falsified its records and paid tens of millions of dollars in bribes for help in obtaining more than $4 billion in projects in countries including Indonesia, Saudi Arabia, Egypt and the Bahamas.

The bribes were often funneled through middlemen who the company hired as consultants and who were referred to in internal documents by code names such as “Mr. Geneva” and “Mr. Paris,” officials said.

“Alstom’s corruption scheme was sustained over more than a decade and across several continents,” Deputy Attorney James Cole said at a news conference. “It was astonishing in its breadth, its brazenness, and its worldwide consequences.”

The Justice Department says the scheme ran from roughly 2000 to 2011 and relied on middlemen who the company described as consultants but whose duty, in reality, was to facilitate the bribes and secure projects. In one case in Indonesia, prosecutors said, an Alstom executive emailed an employee that “one of the engineering chaps” who had influence on the outcome of particular project was involved in a new project and “keeps reminding the boys that we owe him something.”

“This issue needs to be sorted out ASAP to ensure proper support,” the executive wrote.

The company’s guilty plea to violating the Foreign Corrupt Practices Act — which makes it illegal to bribe foreign government officials for business — was being entered in federal court in Connecticut, where one of the company’s U.S. subsidiaries, Alstom Power Inc., is located.

In a statement, Alstom said it had improved its compliance practices and was looking to move beyond the allegations.

“There were a number of problems in the past and we deeply regret that,” Alstom CEO Patrick Kron said. “However, this resolution with the (Justice Department) 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.”

Alstom Power and another U.S. subsidiary, Alstom Grid Inc., both entered into deferred-prosecution agreements that will be in effect for three years, the company said. Alstom’s Swiss subsidiary has pleaded guilty to conspiring to violate the anti-bribery provisions of the FCPA, officials said.

In addition, the Justice Department says five individuals, including four former executives of Alstom and its subsidiaries, have already been charged in connection with bribery-related schemes. Prosecutors say it was only after individual executives were criminally charged that the company began cooperating.

In June, General Electric agreed to buy the energy and power generation operations of Alstom for $17 billion. The Justice Department said that purchase did not factor into the resolution and that the penalty will be paid by Alstom, not GE.

“That was something we insisted on,” Assistant Attorney General Leslie Caldwell said, head of the Justice Department’s criminal division. “That’s something that I think was very important.”


Associated Press writer Greg Keller in Paris contributed to this report.

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