Alcoa to pay $384m to settle Bahrain bribery allegations

Alcoa  employees release molten aluminum into a vertical cast for cylindrical billets at ta  production plant in  South Carolina. Photographer: Stephen Morton/Bloomberg

Alcoa employees release molten aluminum into a vertical cast for cylindrical billets at ta production plant in South Carolina. Photographer: Stephen Morton/Bloomberg

 

Alcoa, the largest US aluminium producer, has agreed to pay $384 million to settle US allegations that one of its units bribed members of Bahrain’s royal family and officials at a state-owned company to win business.

Alcoa World Alumina, a majority-owned unit that supplies the raw material used by smelters to make aluminium, will plead guilty to one count of violating the anti-bribery provisions of the Foreign Corrupt Practices Act in a 2004 transaction, the department of justice said in a statement yesterday.

“Alcoa World Alumina today admits to its involvement in a corrupt international underworld in which a middleman secretly held offshore bank accounts and shell companies were used to funnel bribes to government officials in order to secure business,” acting assistant US attorney general Mythili Raman said in the statement.

The settlement includes a criminal fine of $209 million, a forfeiture of $14 million and a disgorgement to the Securities and Exchange Commission of $161 million, according to the justice department.

The total settlement is the fourth-largest in an FCPA case, according to the SEC.

Alcoa has been dealing with allegations over its conduct in Bahrain since 2008, when Aluminium Bahrain BSC, known as Alba, sued it in a US court for overcharges stemming from bribery. US prosecutors began investigating those allegations the same year. They traced the funds through accounts, some held under aliases, in Liechtenstein, Luxembourg, Switzerland and Guernsey, the justice department said.

Alcoa agreed last year to pay $85 million in cash and enter into a long-term alumina contract to Alba to settle the 2008 suit. That settlement had a total value of $447 million, Alba said in 2012.

“There is no allegation in the filings by the DOJ and there is no finding by the SEC that anyone at Alcoa knowingly engaged in the conduct at issue,” Alcoa said in a statement yesterday. – (Bloomberg)