The Serious Fraud Office on Monday said Victor Dahdaleh, Alcoa's former agent for sales to Bahrain, was arrested in London and charged with corruption.
Dahdaleh, 63, a dual citizen of Britain and Canada who lives in Belgravia, London, is alleged to have bribed officials of Aluminium Bahrain B.S.C. ('Alba'), a smelting company in Bahrain with majority state ownership, according to the SFO.
The alleged payments were made in 2001 to 2005, the SFO said, in connection with contracts between Pittsburgh-based Alcoa and Alba for supplies of alumina shipped to Bahrain from Australia.
Dahdaleh was released on 'conditional police bail' and is scheduled to appear at the City of Westminster Magistrates' Court on October 31.
He was charged not under the new U.K. Bribery Act but older laws:
- Corruption contrary to Section 1, Prevention of Corruption Act 1906
- Conspiracy to corrupt contrary to Section 1, Criminal Law Act 1977
- Acquiring and transferring criminal property contrary to Sections 329(1) and 327(1) of the Proceeds of Crime Act 2002
The SFO's investigation started in July 2009, the agency said, and it has been 'in liaison' with the U.S. Department of Justice and Swiss authorities.
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The DOJ in March 2008 opened a criminal investigation into allegations that Alcoa Inc. and some individuals violated the Foreign Corrupt Practices Act and other laws by bribing officials in Bahrain.
The federal investigation was triggered three weeks after Alba filed a civil lawsuit in federal court in Pittsburgh accusing Alcoa of a 15-year conspiracy linked to overcharging, fraud, and bribery. The suit alleged that more than $2 billion in Alba's payments under supply contracts passed from Bahrain to tiny companies in Singapore, Switzerland, and the Isle of Guernsey, and that some of the money was then used to bribe Bahraini officials involved in granting the contracts. Alba's suit also named Dahdaleh as a defendant.
Just weeks after Alba brought the civil suit, the DOJ intervened in the case. It asked the court for a stay while the government investigated 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.
Alba's civil case is classified in the court records as "terminated." That doesn't mean the suit is dead -- just dormant until the stay is lifted.
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According to Alcoa's site, the company 'is the world's leading integrated aluminum company, providing jobs to 59,000 employees across 31 countries.' Revenues last year were $24.6 billion.
It made our 2011 watch list for potential FCPA enforcement actions.
Alcoa Inc. trades on the NYSE under the symbol AA.
View the SFO's October 24, 2011 release here.
Download the February 27, 2008 civil complaint in Aluminium Bahrain BSC v. Alcoa, Inc, Alcoa World LLC, William Rice, and Victor Dahdaleh here.