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Thursday
May052016

Bahamas utility official convicted of taking Alstom bribes

A jury in the Bahamas Tuesday convicted a former board member of the Bahamas Electricity Corporation of bribery, finding he took hundreds of thousands of dollars to help Alstom win contracts, reduce penalties for late performance, and overturn a government award to a competitor.

Fred Ramsey, 79, was found guilty on two counts of conspiracy to commit bribery and twelve counts of bribery, the Nassau Guardian reported.

He faces up to four years in prison.

In December 2014, Paris-based Alstom pleaded guilty in federal court in Connecticut to bribing officials in the Bahamas, and in Indonesia, Saudi Arabia, and Egypt.

The company paid $772 million in criminal penalties to settle the charges -- the biggest criminal fine ever levied for Foreign Corrupt Practices Act offenses and the second biggest FCPA enforcement action overall.

Three Alstom executives have pleaded guilty in the United States to bribing officials in Indonesia to win a power project contract. Charges are pending against a fourth executive.

In the UK, the Serious Fraud Office has charged seven individuals and Alstom Network UK Ltd with bribery-related offenses.

Alstom manufactures rail, power, and energy equipment. In June 2014, Alstom agreed to sell its power business to General Electric for €12.4 billion ($15.6 billion).

In the Bahamas trial, the government's chief witness against Ramsey was Mark Smith, an American consultant. Smith was granted immunity in the case. 

He testified "that he deposited the bribes in Ramsey’s U.S. account for providing details of private [Bahamas Electricity Corporation] board meetings, getting a reduction in fines that Alstom had to pay in penalties for late installation of the generators, and approaching a Cabinet minister to intervene after the board unanimously voted to award the contract to the South Korean company Han Jung," the Nassau Guardian said.

At the trial, Smith "produced records showing checks that he had made out to Ramsey and deposited to his Florida account."

Bahamas Electricity Corporation is a government-owned company.

The U.S. Justice Department's 2014 criminal information (pdf) against Alstom S.A. said:

[I]n connection with the bidding on the power projects, Alstom retained Consultant I who, as certain Alstom employees knew, was a close personal friend of "Official 8" a board member of BEC [Bahamas Electricity Corporation]. Consultant l's primary purpose was not to provide legitimate consulting services to Alstom and its subsidiaries but was instead to pay bribes to Official 8 who had the ability to influence the award of the power contracts. Consultant I was a U.S. citizen, was based in the United States, and maintained a bank account in the United States.

Following his conviction, Ramsey is free on bail of $40,000. The judge ordered him to surrender his travel documents to the court prior to sentencing.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He'll be the keynote speaker at the FCPA Blog NYC Conference 2016.