2014 may not go down in history as the Year of Bribery Enforcement as it seemed just back in April, but the U.S. Department of Justice (DOJ) knows how to go out with a bang — slapping French industrial giant Alstom with the largest criminal penalty for bribery in U.S. history.
On December 22, the DOJ announced that Alstom has agreed to plead guilty and pay $775 million for its involvement in a plot to give cash payments to officials in Indonesia and other countries. According to the DOJ, Alstom paid more than $75 million in bribes between 2000 and 2011 in order to secure contracts worth $4 billion. Those contracts led directly to $300 million in profits for the company.
“Alstom’s corruption scheme was sustained over more than a decade and across several continents,” said James Cole, deputy attorney general. “It was astounding in its breadth, its brazenness and its worldwide consequences.”
The DOJ says that Alstom attempted to hide its bribery scheme by using paid consultants to act as conduits for the payments, adopting code names such as “Mr. Geneva,” “Quiet Man” and “Old Friend.”
“There were a number of problems in the past, and we deeply regret that,” Alstom CEO Patrick Kron said in a statement. “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’s criminal penalty sits as the second-largest overall Foreign Corrupt Practices Act (FCPA) case of all time, only behind Siemens’ $800 million FCPA settlement in 2008, according to FCPAblog.com. The largest thus far in 2014 had been Alcoa’s $384 million fine in January.
General Electric (GE) entered into an agreement to purchase Alstom’s energy operations for $118 million in June 2014. However, the DOJ announced that the terms of the criminal penalty stipulate that Alstom is not allowed to pass on any of the penalty to GE.
However, despite the large criminal penalty, Alstom may not yet be done with regulatory payments. According to The Guardian, the UK Serious Fraud Office is also investigating the company and subsidiary Alstom Power for allegations of bribery in Lithuania.