US fines France's Alstom $772M in bribery case
French industrial giant Alstom will plead guilty and pay a record $772.3 million penalty in a wide-ranging foreign bribery case, the US Justice Department announced on Monday.
Alstom admitted to bribing officials to win power and transportation projects from state-owned entities around the world, including the Bahamas, Egypt, Indonesia, Saudi Arabia and Taiwan.
In total, Alstom paid more than $75 million in bribes to secure $4 billion in projects around the world with a profit of approximately $300 million, US prosecutors said.
"Alstom's corruption scheme was sustained over more than a decade and across several continents," said Deputy Attorney General James Cole.
"It was astounding in its breadth, its brazenness and its worldwide consequences."
The fine, if approved by a US court, would be the highest ever for foreign bribery under the US Foreign Corrupt Practices Act.
The DOJ said the penalty imposed reflected Alstom's failure to voluntarily disclose the conduct, its refusal to cooperate with a probe for several years, the breadth of the misconduct, the lack of an effective compliance program and its history of prior criminal conduct.
Under the settlement, the charges will be dismissed after three years if Alstom fulfills its obligations under the deferred prosecution agreement.
It comes as fresh corruption charges were brought against a British subsidiary of the energy equipment firm.
London's Serious Fraud Office has filed charges against the unit and two employees with corruption in securing a contract for a power plant in Lithuania, according to court documents seen by AFP.
A spokesman for Alstom in Britain declined to comment on the ongoing case.
- 'Past problems' -
It was the second Alstom unit to face charges in Britain this year, after Britain's SFO in July launched proceedings against an Alstom unit over alleged corruption in India, Poland and Tunisia.
There have been a series of bribery investigations into the company and its subsidiaries around the world.
Brazilian officials in February indicted 11 people over allegations of bribes to secure contracts with the Sao Paolo metro, and a subsidiary was fined $42.7 million by Swiss authorities for bribery charges in 2011.
But Alstom chief executive Patrick Kron said the company's troubles were now behind it.
"There were a number of problems in the past and we deeply regret that," Kron said.
"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."
Alstom said it had stopped employing consultants to work with its commercial teams. It also hired a monitor to oversee its compliance efforts.
The penalty comes as General Electric nears the completion of a deal to buy most of Alstom's energy assets for 12.4 billion euros ($15.5 billion).
Alstom said its agreement with GE requires that none of the fine can be passed onto the US company.
"We had considered the DOJ investigation and its potential liabilities in our due diligence," said a GE spokesman.
"We're happy Alstom has resolved the issue. As Alstom has stated, the plea agreement does not materially change the overall economics of the deal."
On Friday, Alstom's shareholders overwhelmingly approved the agreement with GE.
The deal is expected to close in the middle of 2015.
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Alstom admitted to bribing officials to win power and transportation projects from state-owned entities around the world, including the Bahamas, Egypt, Indonesia, Saudi Arabia and Taiwan.
In total, Alstom paid more than $75 million in bribes to secure $4 billion in projects around the world with a profit of approximately $300 million, US prosecutors said.
"Alstom's corruption scheme was sustained over more than a decade and across several continents," said Deputy Attorney General James Cole.
"It was astounding in its breadth, its brazenness and its worldwide consequences."
The fine, if approved by a US court, would be the highest ever for foreign bribery under the US Foreign Corrupt Practices Act.
The DOJ said the penalty imposed reflected Alstom's failure to voluntarily disclose the conduct, its refusal to cooperate with a probe for several years, the breadth of the misconduct, the lack of an effective compliance program and its history of prior criminal conduct.
Under the settlement, the charges will be dismissed after three years if Alstom fulfills its obligations under the deferred prosecution agreement.
It comes as fresh corruption charges were brought against a British subsidiary of the energy equipment firm.
London's Serious Fraud Office has filed charges against the unit and two employees with corruption in securing a contract for a power plant in Lithuania, according to court documents seen by AFP.
A spokesman for Alstom in Britain declined to comment on the ongoing case.
- 'Past problems' -
It was the second Alstom unit to face charges in Britain this year, after Britain's SFO in July launched proceedings against an Alstom unit over alleged corruption in India, Poland and Tunisia.
There have been a series of bribery investigations into the company and its subsidiaries around the world.
Brazilian officials in February indicted 11 people over allegations of bribes to secure contracts with the Sao Paolo metro, and a subsidiary was fined $42.7 million by Swiss authorities for bribery charges in 2011.
But Alstom chief executive Patrick Kron said the company's troubles were now behind it.
"There were a number of problems in the past and we deeply regret that," Kron said.
"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."
Alstom said it had stopped employing consultants to work with its commercial teams. It also hired a monitor to oversee its compliance efforts.
The penalty comes as General Electric nears the completion of a deal to buy most of Alstom's energy assets for 12.4 billion euros ($15.5 billion).
Alstom said its agreement with GE requires that none of the fine can be passed onto the US company.
"We had considered the DOJ investigation and its potential liabilities in our due diligence," said a GE spokesman.
"We're happy Alstom has resolved the issue. As Alstom has stated, the plea agreement does not materially change the overall economics of the deal."
On Friday, Alstom's shareholders overwhelmingly approved the agreement with GE.
The deal is expected to close in the middle of 2015.
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