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FCPA Blog Daily News

« Mini survey result: The buck stops where? | Main | China's 'Five Generals' of Anti-Corruption Enforcement »
Wednesday
Oct102012

Alcoa, Alba settle bribes suit

Alcoa said Tuesday it has reached a settlement with Aluminium Bahrain B.S.C. ('Alba') to end a civil lawsuit that accused Alcoa of bribing Alba officials and overcharging for the supply of raw materials.

In announcing the settlement, Alco said it didn't admit liability but 'agreed to make a cash payment to state-owned Alba of $85 million payable in two installments. One half was made at settlement and the other half will be made one year later.'

Alba filed the suit in 2008 in federal court in Alcoa's hometown, Pittsburgh. The suit accused Alcoa of a 15-year conspiracy of overcharging, fraud, and bribery. It alleged that more than $2 billion in Alba's payments under raw-material 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.

Private parties have no right of action under the FCPA; only the DOJ and SEC can enforce it. Alba's federal lawsuit alleged common law fraud and violations of RICO -- the Racketeer Influenced & Corrupt Organizations Act found at 18 U.S.C. §§1961-68. 

Three weeks after Alba filed the suit, the judged stayed it at the request of the DOJ. Prosecutors said they needed time to investigate whether Alcoa, its executives, and agents 'have engaged in conduct with respect to their commercial relationship with Alba in alleged violation of various criminal laws, including the FCPA, and the mail and wire fraud statutes.'

The DOJ told the court the 'Alba complaint alleges numerous facts which, if true, could be relevant to the government's criminal investigation and a potential criminal trial.'

The civil suit was allowed to proceed in late 2011. The DOJ's investigation is still pending.

Bahrain's own investigation, according to 2008 reports, centered on Sheikh Isa bin Ali al-Khalifa, the country's former minister of petroleum and chairman of Alba, and on Jordan-born Canadian businessman Victor Dahdaleh, who had acted as Alcoa's agent in Bahrain.

Last year, Dahdaleh was arrested in London, where he lives, and charged under U.K. law with bribing officials at Alba. The alleged payments were made in 2001 to 2005, the Serious Fraud Office said, in connection with contracts between Alcoa and Alba for supplies of alumina shipped to Bahrain from Australia.

Earlier this year, Bruce Allan Hall, an Australian who served as CEO of Alba, was charged in London with taking bribes. Hall was extradited from Australia after his arrest there in October 2010.

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