Aluminum Company Agrees to $384 Million in Penalties to Settle Bribery Charges
The Department of Justice and the Securities and Exchange Commission announced Jan. 9 that a global aluminum producer and one of its subsidiaries will pay a total of $384 million in criminal and regulatory penalties to resolve charges that the subsidiary used an international middleman to bribe Bahraini officials in violation of the Foreign Corrupt Practices Act. According to the DOJ, the subsidiary will pay a criminal fine of $209 million and administratively forfeit $14 million and the parent company will maintain and implement an enhanced global anti-corruption compliance program. The parent company will also pay the SEC an additional $161 million in disgorgement.
The SEC states that its investigation found that more than $110 million in corrupt payments were made to Bahraini officials with influence over contract negotiations between the parent company and a major government-operated aluminum plant. The parent company’s subsidiaries used a London-based consultant with connections to Bahrain’s royal family as an intermediary to negotiate with government officials and funnel the illicit payments to retain the company’s business as a supplier to the plant. According to the SEC, the company lacked sufficient internal controls to prevent and detect the bribes, which were improperly recorded in its books and records as legitimate commissions or sales to a distributor.
A DOJ press release adds that the plea agreement and related court filings acknowledge as factors relevant to the size of the criminal fine the current financial condition of the parent company as well as its and its subsidiary’s extensive cooperation with the DOJ, including conducting an extensive internal investigation, making proffers to the government, voluntarily making current and former employees available for interviews, and providing relevant documents. Court filings also acknowledge subsequent anti-corruption remedial efforts undertaken by the parent company.