Combating Corruption
Alstom to Pay Largest FCPA Criminal Penalty in History
12/29/2014
arlier this week, Alstom S.A., a French
multinational power and transportation company, pleaded guilty in the District
of Connecticut to a two-count information charging it with violating the accounting provisions
of the Foreign Corrupt Practices Act. The penalty levied against Alstom, over
$772 million, will be the largest criminal fine that has ever been imposed
under an FCPA. Provided that the District Court approves the plea agreement
negotiated between Alstom and the Department of Justice, the resolution will
rank just under the 2008 Siemens FCPA resolution, which involved combined
criminal and civil penalties of approximately $800 million.
According to the information, the corrupt
conduct of Alstom personnel and agents, though noteworthy in its breadth and
length of time, has the hallmarks of a textbook FCPA case: the use of third
party consultants (often referred to by codename) with little documentation corroborating
the purposes for their massive fees; a foreign subsidiary subject to
insufficient parental supervision; attempts to obtain lucrative contracts for
power and transportation projects for state-owned companies; and a failure to
respond to red flags.
Alstom was also flagged for failing to self-disclose
the corrupt activity to law enforcement officials, and for resisting
cooperation in the early stages of the investigation. Assistant Attorney
General Leslie Caldwell emphasized, in announcing the plea, that the DOJ “will not wait for companies to
act responsibly. With cooperation or without it, the department will identify
criminal activity at corporations and investigate the conduct ourselves, using
all of our resources, employing every law enforcement tool, and considering all
possible actions, including charges against both corporations and individuals.”
Alstom’s travails are not over. Its
Swiss subsidiary also pleaded guilty to conspiring to violate the FCPA’s
anti-bribery provision, and two of its U.S. subsidiaries entered deferred
prosecution agreements in which they admitted the same. The U.K.’s Serious
Fraud Office has now filed new, related charges against Alstom’s U.K.
subsidiary for alleged bribes paid to Lithuanian officials. Based on Deputy
Attorney General James Cole’s statement that Alstom’s conduct “was breathtaking in its
breadth, its brazenness, and its worldwide consequences,” and his lauding of
the “remarkable cross-border collaboration” between law enforcement agencies across
the globe during the investigation, it appears that there may be more to come.
No comments:
Post a Comment