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Mar-21-2008Alcoa Probed by US Over Bahrain Bribery Allegations (Update2)(topic overview)
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WASHINGTON -- The Justice Department is opening a criminal inquiry into allegations that Alcoa Inc. was involved in bribery in the Persian Gulf country of Bahrain. Allegations against Alcoa by the government of Bahrain in a recent civil lawsuit in Pittsburgh are "the subject of an ongoing federal criminal investigation," prosecutors said last night in a filing seeking a temporary hold on the civil case in order to protect their criminal inquiry. "We will cooperate fully with the DOJ and believe this will help bring this matter to a speedy conclusion," Alcoa communications director Kevin Lowery said. [1] Bahrain is an island country in the Persian Gulf, east of Saudi Arabia. The Justice Department notified Alcoa earlier this week that it intended to intervene in the lawsuit and the company responded that it had no objections, Alcoa spokesman Kevin Lowery said. "We will cooperate fully and believe this is an opportunity to bring the entire matter to a speedy conclusion," Lowery said. Alcoa conducted a quick review of the allegations of bribery in Bahrain by Alcoa representatives and the company maintains that it has found no evidence of wrongdoing by its employees or agents representing the company, Lowery said. The only allegation of wrongdoing came from those claims filed in the lawsuit last month, and there is no specific information in that lawsuit, Lowery said. Alcoa has not filed its initial response in court, but Lowery pointed out that the U.S. District Court in Pittsburgh has asked Aluminum Bahrain to provide specifics of the allegations.[2]
"The allegations in Alba's complaint implicate facts and conduct that fall within the scope of the criminal investigation,'' attorneys for the Justice Department said in court papers. Alba and Alcoa said they don't oppose the government's request. "We are going to cooperate fully with them, and we see this as an opportunity to bring a speedy conclusion to the entire matter,'' Alcoa spokesman Kevin Lowery said in an interview.[3]
The Aluminum Bahrain allegations cite two billion dollars in payments for alumina that went from Bahrain to small firms in Singapore, Switzerland and the Isle of Guernsey, the Journal said. It said the investigation involves Bahrain's former minister of Petroleum and Aluminum Bahrain chairman Sheikh Isa bin Ali al-Khalifa, and Jordan-born Canadian businessman Victor Dahdaleh, who brokered deals for Alcoa in Bahrain. Alcoa spokesman Kevin Lowery told the Journal: "We will cooperate fully with the DoJ and believe this will help bring this matter to a speedy conclusion."[4]
Neither Alcoa nor Aluminum Bahrain BSC, known as Alba, objected to the stay, according to the motion. "We are cooperating fully, and we view this stay of the civil litigation as a way to bring the matter to a speedy conclusion," Alcoa spokesman Kevin Lowery said Friday.[5]
Late last month, Aluminum Bahrain BSC, a Bahrain government-controlled company, filed civil suit in a federal court in Alcoa's home town of Pittsburgh, Pennsylvania, alleging that for 15 years Alcoa overcharged it for an aluminum precursor ingredient, funneled inflated payments to offshore companies and paid kickbacks to government officials in Bahrain. The Journal said government prosecutors confirmed late Thursday that they were asking the Pittsburgh court to place a temporary hold on the civil case while they pursue a criminal investigation of Alcoa. [4] In documents filed Thursday in U.S. District Court, federal prosecutors asked a judge to halt a federal civil lawsuit that accused Pittsburgh-based Alcoa of bribing officials through overseas shell companies to secure hundreds of millions of dollars in overpayments. "The United States has a direct and substantial interest in this case, as the subject matter giving rise to this case is also the subject of an ongoing federal criminal investigation," prosecutors in the Justice Department's fraud section said in court filings.[6] The U.S. Justice Department has asked federal court in Pittsburgh to temporarily halt a lawsuit so it can pursue a criminal investigation of Alcoa Inc. over alleged bribery of officials in Bahrain, court documents filed Thursday show. The Justice Department is intervening in the case because "the United States had a direct and substantial interest in this case, as the subject matter giving rise to this case is also the subject of an ongoing criminal investigation," the Justice Department filing said.[2]
PITTSBURGH (AP) — The U.S. Justice Department has begun a criminal investigation into whether aluminum maker Alcoa Inc. participated in bribery in the Persian Gulf state of Bahrain.[6]
March 21 (Bloomberg) -- Alcoa Inc., the world's third- largest aluminum producer, is under criminal investigation by the U.S. Justice Department over allegations the company bribed officials in Bahrain in an effort to obtain business.[3] The U.S. Justice Department has begun a criminal investigation into Alcoa, the U.S. aluminium group, over allegations the company bribed officials in the Persian Gulf state of Bahrain.[7]
WASHINGTON (AFP) — The U.S. Justice Department has launched a criminal investigation into allegations that aluminum giant Alcoa paid bribes to officials in Bahrain, the Wall Street Journal reported Friday.[4] ' Alcoa corrupted via bribery senior Aluminum Bahrain executives. The filing said that if the Aluminum Bahrain allegations are true, they could be relevant to the Justice Department criminal case and, in fact, its criminal investigation concerns the same business practices, contracts and allegedly improper payments at issue in the civil case.[2]
The Department of Justice has begun a criminal investigation into allegations Alcoa Inc. was involved in bribery in Bahrain.[5]
March 21 (Bloomberg) -- The U.S. Justice Department opened a criminal inquiry into allegations that Alcoa Inc. was involved in bribery in Bahrain, the Wall Street Journal reported.[8]
In court documents filed this week, the U.S. Justice Department said: "The United States has a direct and substantial interest in this case, as the subject matter giving rise to this case is also the subject of an ongoing federal criminal investigation." It added: "The Alba complaint alleges numerous facts which, if true, could be relevant to the government's criminal investigation and a potential criminal trial."[7] "The Alba complaint alleges numerous facts which, if true, could be relevant to the government's criminal investigation and a potential criminal trial," prosecutors said in court filings. "As the criminal investigation arises out of the same facts and circumstances on which the claims in this civil action are based, the determination of potential liability against possible subjects of the investigation, particularly if they are charged with crimes as a result of the investigation, will turn on the same essential factual questions at issue in this civil action," the government said.[6]
Allegations against Alcoa by the government of Bahrain in a recent civil lawsuit in Pittsburgh are "the subject of an ongoing federal criminal investigation,'' the paper quoted unidentified prosecutors as saying in a filing last night.[8]
Federal prosecutors have filed a motion in U.S. District Court of western Pennsylvania to stay a civil suit by Aluminum Bahrain BSC, against Alcoa, in order to pursue the criminal probe.[5] Aluminum Bahrain B.S.C., also known as Alba, in which the Bahrain government holds a 77 percent stake, is seeking more than $1 billion in damages from Alcoa and other affiliated defendants, according to a federal lawsuit filed last month.[6] Aluminum Bahrain BSC is seeking more than $1 billion in damages from Alcoa, which has corporate offices in Pittsburgh, for what it calls a "massive outrageous fraud," according to the lawsuit filed in Pittsburgh.[2]
The U.S. submitted papers yesterday in federal court in Pittsburgh requesting permission to participate in a lawsuit filed there by the government of Bahrain containing similar allegations against New York-based Alcoa.[3]
A "very fast review" done by Alcoa found nothing that deviated from standard practices, which prohibit improper activity by the company's employees, partners and contractors, Lowery said. The company wasn't aware of any wrongdoing and would "vigorously defend" the lawsuit, he said. Alba, which buys most of its alumina — a material used to make aluminum — from Alcoa and its affiliated companies, alleged the defendants bribed one or more former senior officials of Alba and the Bahrain government to persuade the company to cede a controlling interest in the company to Alcoa and to pay inflated prices for alumina.[6] Aluminum Bahrain BSC, or Alba, sued Alcoa Feb. 27, claiming the company bribed unidentified Bahraini government officials and overcharged over a period of 15 years for alumina, an ingredient used to make aluminum.[3]
The suit claims that for 15 years Alcoa systematically overcharged Aluminum Bahrain BSC, a customer known as Alba, for supplies of alumina, a raw material used in smelting, the newspaper said.[8]
Alba, which operates one of the world's largest aluminum smelters, also sued Alcoa World Alumina LLC, a global joint venture 60 percent owned by Alcoa and 40 percent owned by Australia's Alumina Ltd. The lawsuit also named William Rice, an Alcoa World Alumina executive, and Victor Dahdaleh, a Canadian citizen who has acted as an agent for Alcoa and Alcoa World Alumina. After being contacted by Alba about the allegations, Alcoa offered to conduct a full review of its dealings with Alba over the past 20 years, but Alba chose to sue, Lowery said in February.[6]
The lawsuit filed last month accuses Alcoa of bribing officials of Bahrain and its government-owned aluminum company over a 14-year period, resulting in Alcoa being overpaid "hundreds of millions of dollars" for a raw material used to make aluminum.[2] Alba is alleging the defendants bribed one or more former senior officials of Alba and the Bahrain Government to persuade the company to cede a controlling interest in the company to Alcoa and to pay inflated prices for alumina.[7] The probe adds to a legal action Alcoa is already facing from Aluminium Bahrain (Alba), which is 77 per cent owned by the Bahrain Government. Alba is seeking more than $1 billion (£504.3 million) in damages from Alcoa and other related defendants but its legal action has been stayed while the U.S. conducts its probe into bribery claims against the aluminium group.[7]
Aluminum Bahrain BSC, a long-time Alcoa customer and one of the world's largest aluminum smelters is 77 percent owned by the government of Bahrain.[2] ' Alcoa caused Aluminum Bahrain to pay inflated prices for alumina, the primary ingredient in aluminum.[2] ' Alcoa defrauded Aluminum Bahrain into ceding a substantial portion of its equity holding to Alcoa.[2]
Khalid Bumtai, a spokesman for Aluminum Bahrain in Bahrain, declined to comment to Bloomberg News today on the report, saying the issue is "a legal matter.''[8]
Alcoa communications director Kevin Lowery said the company "will cooperate fully'' to help bring the matter to a speedy conclusion, the report said. [8] Alcoa spokesman Kevin Lowery couldn't immediately be reached for comment outside of normal business hours.[8]
Alba last month filed a $1 billion suit against Alcoa in February, claiming Alcoa bribed government officials as far back as 1993. [5] Alba, a 30-year Alcoa customer, and Alcoa do not object to the government's request to temporarily halt the civil proceedings, according to court documents.[6]
The federal motion calls for "a stay of discovery pending the outcome of an ongoing federal criminal investigation," according to court documents.[5] Some of the proceeds of the overcharges were used to fund potentially improper payments to a senior Bahrain government official who is already under investigation in that country, the report said.[8]
A Justice Department spokesman did not immediately reply to an e-mail seeking comment early Friday. [6]
SOURCES
1. Free Preview - WSJ.com
2. Justice Department probing Alcoa - Pittsburgh Tribune-Review
3. Bloomberg.com: U.S.
4. AFP: US Justice probes Alcoa Bahrain bribe allegations: report
5. Department of Justice to probe Alcoa - Pittsburgh Business Times:
6. The Associated Press: Feds Open Criminal Probe Into Alcoa
7. Alcoa faces US probe on Bahrain bribery claims - Times Online
8. Bloomberg.com: Worldwide
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