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FCPA Blog Daily News

Entries in Alstom (55)

Wednesday
Sep072011

Breaking: Alstom, SFO In Talks

Alex Spence of The Times of London reported today that 'a senior figure' from Alstom met with Richard Alderman, director of the SFO. Alstom initiated the contact, Spence's story said.

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Monday
Jul182011

Who'll Make The Next Top Ten?

Our list of the ten biggest corporate FCPA cases of all time hasn't changed since April, when Johnson & Johnson's $70 million settlement came on as number 10.

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Tuesday
Apr262011

Alstom's Swiss Banker Acquitted

A Swiss federal criminal court last week acquitted a private banker in Zurich of bribery and money laundering charges growing out of his relationship with French firm Alstom SA.

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Monday
Dec272010

Fox's Favorite Investigations

Last week Tom Fox picked his top ten FCPA enforcement actions for 2010. Today he gives his choices for the top ten investigations disclosed or making news this year:

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Wednesday
Mar242010

Code Named Ruthenium

The U.K.'s Serious Fraud Office today reported in dramatic fashion the arrest of three top executives of French industrial giant Alstom's British unit. They're suspected of paying bribes overseas to win contracts.

After today's arrests, the company said:

Several Alstom offices in the United Kingdom have been raided on Wednesday 24 March by police officers and some of its local managers are being questioned. The police apparently executed search warrants upon the request of the Swiss Federal justice. Alstom has been investigated by the Swiss justice for more than 3 years on the motive of alleged bribery issues. Within this frame, Alstom’s offices in Switzerland and France have already been searched in the past years. Alstom is cooperating with the British authorities.

In August 2008, we reported that Swiss police had arrested a former Alstom manager and searched for evidence as part of a corruption and money-laundering investigation. Offices near Zurich and in Baden were raided, as were homes in several cantons.

Another international investigation of Alstrom involving suspected corrupt payments in Asia and South America between 1995 and 2003 has been ongoing. Reports in May 2008 said Swiss authorities found evidence Alstom paid around €20 million via shell companies to agents and others in Singapore, Indonesia, Venezuela and Brazil. Reports also mentioned payments of $6.8 million in connection with a $45 million contract for the Sao Paolo subway and a Brazilian energy plant.

The press said in June 2008 that French judges had charged a former Alstom consultant for his role in suspected overseas bribes. The company apparently appeared as a civil plaintiff in that case, claiming it may have been a victim of embezzlement.

Paris-based Alstom is a global leader in equipment and services for power generation and high-speed rail transport. It operates in more than 70 countries with about 80,000 employees. Revenues last year were €18.7 billion. It has an office in Windsor, Connecticut and its securities trade in the pink sheets (Other OTC: AOMFF.PK).

Here's the full text of the today's SFO release:

Three members of the Board of Alstom in the U.K. have been arrested on suspicion of bribery and corruption, conspiracy to pay bribes, money laundering and false accounting, and have been taken to police stations to be interviewed by the Serious Fraud Office.

Earlier this morning search warrants were executed at Alstom business premises and residential addresses at locations in Warwickshire, Leicestershire, Cheshire, Shropshire, Derbyshire, Staffordshire and London. This operation has involved 109 SFO staff and 44 police officers and Accredited Financial Investigators from Warwickshire, Leicestershire, Cheshire, West Mercia and Staffordshire Police Forces and the Metropolitan Police Service. The three men arrested during this operation are aged 52, 51 and 44.

Code-named Operation Ruthenium, the investigation by the SFO is into the suspected payment of bribes by companies within the Alstom group in the U.K. It is suspected that bribes have been paid in order to win contracts overseas, and that this has involved associated money laundering and other offences. The SFO has been working closely with the Office of the Attorney General and Federal Police in Switzerland and a number of Police Forces in the U.K.

Commenting on today's action, SFO Director Richard Alderman said, "The SFO is committed to tackling corruption. We are working closely with other criminal justice organisations across the world and are taking steps to encourage companies to report any suspicions of corruption, either within their own business or by other companies or individuals."

Wednesday
Apr222009

Right Issue, Wrong Side?

When graft-busting becomes a political weapon, the rule of law grows weaker and corruption generally flourishes. Is that what's happening in Venezuela? Maybe. For sure the number of high-profile opposition leaders accused of bribery and corruption is growing.

  • The latest is the mayor of Maracaibo, Manuel Rosales, 56. He ran against President Hugo Chavez in 2006 and lost. A Bloomberg report said authorities claim he "could not explain some $60,000 of income while he was governor of the oil-rich state of Zulia." This week he fled to Peru instead of facing trial.
  • Leopoldo Lopez, 37, was a popular opposition mayor of Caracas' Chacao Municipality. Based on accusations of corruption, the comptroller general banned him from ever running again for public office.
  • An opposition governor from Yaracuy state, Eduardo Lapi, was convicted of corruption and jailed. He escaped two years ago and fled to Peru, which granted him political asylum.
  • Venezuelan authorities used a corruption investigation to arrest former Defense Minister Raul Baduel, who joined the opposition two years ago.
Bloomberg quoted former mayor Lopez as saying, “The fundamental problem is that there’s no credibility in the judicial system, which is a system that’s been completely politicized. This is retaliation and selective repression.”

Venezuela's 27 million people need a sincere anti-corruption campaign. Here's why. The country ranked 158 out of 180 on the 2008 Corruption Perception Index, tied with Angola, Azerbaijan, Burundi, Congo, Gambia, Guinea-Bissau and Sierra Leone. That's a rough crowd.

On the World Bank's 2009 Doing Business Index, Venezuela ranked 174. The only countries below it were Chad, São Tomé and Principe, Burundi, Congo, Guinea-Bissau, the Central African Republic and the Democratic Republic of the Congo. One symptom of Venezuela's condition is red tape, corruption's constant companion. The permits needed to build a warehouse there, for example, take 395 days to obtain and cost 344% of per capita income ($11,600). The OECD averages are 161.5 days and 56.7% of per capita income.

The Heritage Foundation's 2009 Index of Economic Freedom ranked Venezuela 174, followed only by Eritrea, Burma, Cuba, Zimbabwe and North Korea. It said, "Corruption pervades civil society and the judiciary; contracts and property rights are not well protected. Government tenders are vulnerable because the process frequently lacks transparency. Critics allege that price and exchange controls, involvement by government and military officials in narcotics trafficking, and kickbacks on major weapons purchases are sources of corruption in Venezuela."

Venezuelan oil revenues, according to the CIA World Factbook, account for roughly 90% of export earnings, about 50% of the federal budget revenues, and around 30% of GDP. It's the fourth-biggest supplier of foreign crude oil to the U.S.

In Pride International's latest Foreign Corrupt Practices Act disclosure, the oil services company said it has identified potentially corrupt payment practices in Venezuela.This year, Siemens admitted paying $16.7 million in bribes there, and former Bridgestone manager Misao Hioki said he negotiated corrupt payments with Venezuelan officials. Earlier FCPA enforcement actions involving Venezuela were Oil States International, Inc. (2007) and BellSouth Corp. (2002). In an ongoing European investigation, Swiss authorities reportedly found evidence that French engineering firm Alstom paid bribes to Venezuelan government officials.

The U.S. administration has a new narrative and looks ready to engage President Chavez. At the top of the agenda should be ways to promote sincere, non-political anti-corruption initiatives. How else will Venezuelans be able to sort their honest public servants from the crooked ones?
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Monday
Aug252008

Swiss Police Raid Alstom

Swiss police last week arrested a former manager of French engineering giant Alstom and searched for evidence as part of a corruption and money-laundering investigation. Offices near Zurich and in Baden were raided, as were homes in several cantons.

Paris-based Alstom is a global leader in equipment and services for power generation and high-speed rail transport. It operates in more than 70 countries with about 76,000 employees. Revenues last year were €16.9 billion. It has an office in Windsor, Connecticut and its securities trade in the pink sheets (Other OTC: AOMFF.PK).

The raids and arrest last week are reported to be unrelated to another investigation involving suspected corrupt payments in Asia and South America between 1995 and 2003. Reports in May said that Swiss authorities found evidence Alstom paid around €20 million via shell companies to agents and others in Singapore, Indonesia, Venezuela and Brazil. Reports also mentioned payments of $6.8 million in connection with a $45 million contract for the Sao Paolo subway and a Brazilian energy plant.

In June this year, the press said French judges had charged a former Alstom consultant for his role in suspected overseas bribes. The company apparently appeared as a civil plaintiff in that case, claiming it may have been a victim of embezzlement.

Alstom said over the weekend that it's "cooperating fully with the judicial authorities in this [new] matter."

Forbes said "investors were cautious about painting [Alstom] with the same brush as Siemens, which has been embroiled in a slush fund scandal. Also, the previous investigation into Alstom was over infrastructure contracts in South America and Asia between 1995 and 2003, before the company's chief executive, Patrick Kron, took charge. If the previous investigation was over past contracts, chances are that this one is too, suggesting a limited impact on the company and its current management."

U.S. authorities haven't said whether they're investigating or planning to investigate Alstom for violations of the Foreign Corrupt Practices Act or other laws.

Thanks to CW for the heads up.

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