Alcoa, subsidiary to pay US feds $384 million over foreign bribery charges
MOSCOW, January 9 (RAPSI, Ingrid Burke) - Alcoa World Alumina LLC agreed to plead guilty Thursday to resolve charges that it paid out millions in bribes to Bahraini officials via a London middleman, the US Department of Justice (DOJ) announced in a statement.
Alcoa World Alumina LLC is a majority-owned and controlled global alumina sales company of Alcoa Inc.
Alcoa of Australia, an entity controlled by the aluminum producer, secured a long-term alumina supply agreement with Bahraini state-controlled aluminum smelter Aluminium Bahrain BSC (Alba), according to the DOJ statement.
The allegations are described in the statement as follows: “At the request of certain members of Bahrain’s Royal Family who controlled the tender process, Alcoa of Australia inserted a London-based middleman with close ties to certain Royal Family members as a sham sales agent and agreed to pay him a corrupt commission intended to conceal bribe payments… Over time, Alcoa of Australia expanded the relationship with the middleman… to begin invoicing increasingly larger volumes of alumina sales through his shell companies, which permitted [the middleman] to make larger bribe payments to certain government officials.”
Alcoa World Alumina LLC will plead guilty before a US federal district court in Pennsylvania of having violated one count of the Foreign Corrupt Practices Act’s (FCPA) anti-bribery provisions, stemming from a 2004 transaction. The guilty plea will be accompanied by the payment of a $209 million fine and a $14 million administrative forfeiture, according to the DOJ statement, which noted that Alcoa Inc. had settled with the US Securities and Exchange Commission (SEC) in a parallel action..
The SEC issued a statement Thursday morning confirming that Alcoa had agreed to settle SEC charges levied against it in connection with corrupt payments allegedly made to Bahraini officials. According to the statement, Alcoa will pay the SEC $175 million in disgorgement – of which $14 million will be deemed satisfied by Alcoa’s forfeiture in the criminal proceedings. Thus the company will pay a total sum of $384 million between the two settlements, according to both the DOJ and SEC statements.
According to Alcoa’s statement, the $209 DOJ fine should be paid in five equal installments over the course of four years, the first installment to be accompanied by the $14 forfeiture. The company further intends to pay the SEC charges – amounting to $161 million after the $14 million forfeiture deduction – in five equal payments over the course of four years. The initial payments for each settlement will be satisfied during the first quarter of 2014, according to Alcoa’s statement.
In a statement of its own, the Pittsburgh-based aluminum producer agreed asserted: “There is no allegation in the filings by the DOJ and there is no finding by the SEC that anyone at Alcoa Inc. knowingly engaged in the conduct at issue.”