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FCPA Blog Daily News

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Friday
Dec172010

The Alba Files

Checking on loose ends is a year-end thing around here. Falling into that category is the two-year old civil suit against Alcoa by Aluminium Bahrain BSC. Alba, as it's known, is majority-owned by the government of Bahrain.

To refresh: in 2008, Alba sued Alcoa Inc., its long-time raw materials supplier, for corruption and fraud. The suit in federal court in Pittsburg alleged that over a 15-year period Alba was overcharged $2 billion (yes, two billion). The money, according to the suit, first went to overseas accounts controlled by Alcoa's agent, London-based Victor Dahdaleh, and some was then used to bribe Alba's executives in return for supply contracts.

Alcoa's conspiracy, Alba said in the civil complaint, "succeeded in exacting hundreds of millions of dollars in over payments, which continue to accumulate to this day. Among other things, Plaintiff seeks damages in excess of $1 billion, including punitive damages, for this massive, outrageous fraud." Strong stuff.

Just weeks after Alba sued Alcoa, the U.S. Justice Department intervened in the case. It asked the court for a stay while the government investigates possible criminal violations of the FCPA and other laws by Alcoa and its executives and agent. The DOJ said the stay was needed to protect potential witnesses against civil discovery. The court granted the stay and that's where the story stops, at least for now.

The civil case is classified in the court records as "terminated." That doesn't mean the suit is dead, however. Just dormant until the stay is lifted.

How's the DOJ's criminal investigation into Alcoa and the individuals going? No word from the feds or the company on that one.

Alba launched another big civil suit a year later, this time in Houston against Japanese trading company Sojitz Corp. and its U.S. subsidiary. Alba asked for $31 million in damages, claiming that from 1993 to 2006, Sojitz paid $14.8 million in bribes to two of Alba's employees in exchange for access to metals at below-market prices.

The Justice Department intervened in that case too, again saying discovery could interfere with the government's own investigation into potential criminal wrongdoing, including possible violations of the Foreign Corrupt Practices Act. And again, no word from Uncle Sam or Sojitz about the criminal investigation.

The civil suit still shows up in court records as active, but all proceedings are stayed. Nothing has happened for a year.

Alba didn't oppose the DOJ's requests for stays in either the Alcoa or Sojitz suits.

We assume the government is still investigating both companies and some of their people. Otherwise, the stays would have been lifted and the civil cases would be steaming along. So let's put the Alcoa and Sojitz criminal investigations on our watch list for 2011.

__________________________

Download a copy of the government's May 27, 2010 memorandum in support of a stay in Aluminium Bahrain B.S.C v. Sojitz Corporation and Sojitz Corporation of America here.

Download a copy of the December 18, 2009 federal civil complaint in Aluminium Bahrain B.S.C v. Sojitz Corporation and Sojitz Corporation of America here.

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