Alstom to pay a record $772m fine to settle bribery charges

Alstom pleaded guilty and agreed to pay a record $772 million to end a US Justice Department investigation into bribes paid to win power-plant contracts in Indonesia and the Middle East. U.K. authorities also charged another unit yesterday with paying bribes in Lithuania.

The US fine is the largest criminal penalty paid to the Justice Department under the Foreign Corrupt Practices Act, eclipsing the $450 million paid by Siemens in 2008.

Investigators had to build their case using informants and recorded phone calls when the French company refused to cooperate at first, prosecutors said.

Alstom chief executive officer Patrick Kron said on December 19 that the Levallois-Perret-based company will pay the fines connected to its energy businesses as its shareholders voted in favor of their sale to General Electric. Earlier, Alstom said GE would assume the liabilities.

The Connecticut- based manufacturer agreed in June to buy most of the assets for €12.4 billion, GE’s biggest acquisition ever, and the purchase should close next year.

From at least 2000 to 2011, Alstom paid tens of millions of dollars in bribes to win $4 billion in projects from state-owned companies in Indonesia, Egypt, Saudi Arabia, the Bahamas and Taiwan, the US said. The company made about $300 million in profit from the scheme.

Alstom attempted to conceal the bribes by retaining consultants who acted as conduits for the payments to government officials, the US said. Alstom falsified books and records to hide the payments, according to the government.

“There were a number of problems in the past and we deeply regret that,” Alstom’s Kron said in a statement, adding that the company has changed its compliance practices.

A GE spokesman, Dominic McMullan, said the company is pleased Alstom has resolved the issue, adding that “the plea agreement does not materially change the overall economics of the deal.” The US settlement won’t resolve corruption investigations by the UK and Brazil.

Bloomberg