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French Firm to Pay Record Fine in Bribery Case

FILE - View of Alstom headquarters outside Paris.

FILE - View of Alstom headquarters outside Paris.

The U.S. Justice Department announced Monday that it has cracked a massive international bribery scheme involving a French company that paid bribes to government officials in several countries over more than a decade.

The French power and transportation company Alstom has agreed to plead guilty to violating the Foreign Corrupt Practices Act in connection with a scheme carried out between 2000 and 2011.

Alstom also was ordered to pay a criminal penalty of more than $772 million. If approved by a federal court next year, it would be the largest foreign bribery penalty in U.S. history.

Deputy U.S. Attorney General James Cole described the plea deal as a "historic law enforcement action" that ends a transnational bribery scheme involving Alstom and its subsidiaries in Switzerland and the United States.

"They used bribes to secure contracts in Indonesia, Egypt, Saudi Arabia and the Bahamas," Cole said. "Altogether, Alstom paid tens of millions of dollars in bribes to win $4 billion in projects – and to secure approximately $300 million in profits for themselves."

Invested $75 million in bribes

Alstom spent more than $75 million on bribes in connection with power grid and transportation projects for state-owned entities around the world, the Justice Department said.

Assistant Attorney General Leslie Caldwell told reporters at the Justice Department that Alstom often used third-party consultants to carry out its bribery schemes with government officials in Egypt, Saudi Arabia, the Bahamas and Indonesia.

"Alstom’s corruption spanned the globe and was really its way of winning business,” Caldwell said. "For example, in Indonesia, Alstom and certain of its subsidiaries used consultants to bribe government officials – including high-ranking members of the Indonesian Parliament and state-owned and state-controlled electricity companies. They did that to win several very lucrative multimillion dollar contracts in the power-related services industry."

Caldwell said four Alstom executives have already pleaded guilty in connection with the bribery scheme in Indonesia.

U.S. officials said Alstom made a mistake by not cooperating with law enforcement sooner and by trying to cover up its involvement in the early stages of the investigation.

Alsom's chief executive, Patrick Kron, acknowledged "there were a number of problems in the past and we deeply regret that," according to the Associated Press.

"However," Kron added, "this resolution with the DOJ allows Alstom to put this issue behind us and to continue our efforts to ensure that business is conducted in a responsible way, consistent with the highest ethical standards."

Cole said the steep penalty Alstom now faces and the cooperation that the U.S. received from several countries in connection with the investigation should act as a warning to international corporations looking to evade bribery laws.

"Let me be very clear: Corruption has no place in the global marketplace," Cole said. "And today’s resolution signals that the United States will continue to play a leading role in its eradication."

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    Jim Malone

    Jim Malone has served as VOA’s National correspondent covering U.S. elections and politics since 1995. Prior to that he was a VOA congressional correspondent and served as VOA’s East Africa Correspondent from 1986 to 1990. Jim began his VOA career with the English to Africa Service in 1983.