WASHINGTON--Alcoa World Alumina, a joint venture controlled by
Alcoa Inc. (AA), agreed to pay $384 million to the U.S. Justice
Department and Securities and Exchange Commission to settle bribery
allegations in connection with a contract with Bahrain's
state-controlled aluminum smelter.
The company, a joint venture that's majority owned by the
aluminum giant, as part of the settlement will admit to routing
tens of millions of dollars in kickbacks to members of the Bahraini
royal family who controlled the state company in order to maintain
a supply agreement. The payments were routed through shell
companies and a middleman, according to the Justice Department.
The company admitted to "involvement in a corrupt international
underworld in which a middleman, secretly held offshore bank
accounts, and shell companies were used to funnel bribes to
government officials in order to secure business," the acting head
of the Justice Department's Criminal Division, Mythili Raman, said
in a news release. "The law does not permit companies to avoid
responsibility for foreign corruption by outsourcing bribery to
their agents."
Alcoa will pay the Justice Department and the SEC in chunks over
the next four years. In a news release Thursday, the company said
it had been planning for the charges.
"Alcoa welcomes the resolution of this legacy legal matter with
the U.S. Government," the company said. Alcoa pointed out that
there is "no allegation in the filings by the DOJ and there is no
finding by the SEC that anyone at Alcoa Inc. knowingly engaged in
the conduct at issue."
The agreements will mean a $288 million charge for Alcoa in the
final quarter of 2013, the company said. Alumina Ltd. (AWC,
AWC.AU), the Australian mining company that holds a minority stake
in Alcoa World Alumina, is paying 15% of the costs related to the
bribery probe, Alcoa said.
Alcoa World Alumina is expected to plead guilty Thursday morning
in federal court in Pittsburgh to one count of violating the
Foreign Corrupt Practices Act.
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