Risk Management

Justice Department Probes Alcoa in Bribery Case

A big Bahranian aluminum smelter charges that Alcoa paid off state and company officials via overseas shell companies.
Stephen TaubMarch 21, 2008

The Justice Department has launched a probe of Alcoa to find out whether it bribed officials in Bahrain, according to the Associated Press.

The wire service said the investigation came to light in documents filed by federal prosecutors in U.S. District Court for the Western District of Pennsylvania. In a civil lawsuit filed in that court, one of the world’s biggest aluminum smelters, Aluminum Bahrain BSC — called Alba — accused Alcoa of bribing officials in the Persian Gulf state.

The fraud section of the DoJ’s criminal division asked a judge to let the department intervene in the case and halt the discovery phase of the lawsuit, reportedly asserting: “The Alba complaint alleges numerous facts which, if true, could be relevant to the government’s criminal investigation and a potential criminal trial,” prosecutors reportedly said in court filings.

Alcoa made the bribes, allegedly via overseas shell companies, to secure a controlling interest in Alba and hundreds of millions of dollars in overpayments for aluminum, the Bahranian company contends.

DoJ officials let Alcoa know beforehand that they would be filing the motion to intervene in the case and stay discovery, Alcoa spokesman Kevin Lowery told CFO.com. “We told them we would cooperate fully and that this was a way to bring the entire matter to a speedy conclusion,” he said Friday.

Alba also doesn’t object to the government’s request to halt the civil proceedings, the wire service reported. The government of Bahrain owns a 77 percent stake in Alba, which is seeking more than $1 billion in damages from Alcoa and other affiliated defendants, according to the AP.