Facebook LinkedIn Twitter Vimeo RSS

Alcoa to pay $384 million in fines to settle foreign bribery investigations

By ,

Alcoa Inc. will pay $384 million to settle two federal cases in which it was accused of bribing government officials in the Middle East to maintain a key source of business.

The investigations by the Securities and Exchange Commission and the Department of Justice found that officials representing Alcoa, which has its North American rolled products factory in Manheim Township, Lancaster County, paid more than $110 million in corrupt payments to officials in Bahrain with influence over contract negotiations between Alcoa and a major, government-operated aluminum plant.

Alcoa will pay a total of $384 million in fines to settle both cases, according to the SEC.

The global aluminum producer based in Pittsburgh said the Department of Justice is bringing no direct charges against the company. Alcoa World Alumina, a subsidiary of Alcoa Inc., agreed to plead guilty on one count of violating the anti-bribery provisions of the Foreign Corrupt Practices Act.

The company will pay $223 million to the Department of Justice and will pay the SEC $161 million in fines over a four-year period to settle the claims.

According to the SEC, company subsidiaries used a London-based consultant with "connections to Bahrain's royal family" to funnel payments to keep Alcoa as a supplier for the plant.

"Alcoa lacked sufficient internal controls to prevent and detect the bribes, which were improperly recorded in Alcoa's books and records as legitimate commissions or sales to a distributor," according to an SEC news release.

Alcoa noted that neither the SEC nor the Department of Justice found that any company employee knowingly engaged in the "conduct at issue," and both government organizations credited Alcoa with cooperating with both investigations.

"As the beneficiary of a long-running bribery scheme perpetrated by a closely controlled subsidiary, Alcoa is liable and must be held responsible," said George Canellos, co-director of the SEC Enforcement Division. "It is critical that companies assess their supply chains and determine that their business relationships have legitimate purposes."

There is expected to be court approval on the Department of Justice deal today, according to Alcoa.

Alcoa trades its shares on the New York Stock Exchange under the ticker symbol AA.

More From This Industry

Write to the Editorial Department at editorial@cpbj.com

Leave a Comment


Please note: All comments will be reviewed and may take up to 24 hours to appear on the site.

Post Comment
View Comment Policy