Criminal Probe Into Alcoa: Bahrain Involved?
In documents filed Thursday in U.S. District Court, federal prosecutors asked a judge to halt a federal civil lawsuit that accused Pittsburgh-based Alcoa of bribing officials through overseas shell companies to secure hundreds of millions of dollars in overpayments.
The United States has a direct and substantial interest in this case, as the subject matter giving rise to this case is also the subject of an ongoing federal criminal investigation,” prosecutors in the Justice Department’s fraud section said in court filings.Aluminum Bahrain B.S.C., also known as Alba, in which the Bahrain government holds a 77 percent stake, is seeking more than $1 billion in damages from Alcoa and other affiliated defendants, according to a federal lawsuit filed last month.
“The Alba complaint alleges numerous facts which, if true, could be relevant to the government’s criminal investigation and a potential criminal trial,” prosecutors said in court filings.
“As the criminal investigation arises out of the same facts and circumstances on which the claims in this civil action are based, the determination of potential liability against possible subjects of the investigation, particularly if they are charged with crimes as a result of the investigation, will turn on the same essential factual questions at issue in this civil action,” the government said.
Alba, a 30-year Alcoa customer, and Alcoa do not object to the government’s request to temporarily halt the civil proceedings, according to court documents.
“We were approached and asked and we agreed to the stay,” Alcoa spokesman Kevin Lowery told The Associated Press early Friday. “We obviously are going to cooperate fully. We see this as an opportunity to see a speedy resolution to the entire matter.”
A Justice Department spokesman did not immediately reply to an e-mail seeking comment early Friday.
Alba, which operates one of the world’s largest aluminum smelters, also sued Alcoa World Alumina LLC, a global joint venture 60 percent owned by Alcoa and 40 percent owned by Australia’s Alumina Ltd. The lawsuit also named William Rice, an Alcoa World Alumina executive, and Victor Dahdaleh, a Canadian citizen who has acted as an agent for Alcoa and Alcoa World Alumina.
After being contacted by Alba about the allegations, Alcoa offered to conduct a full review of its dealings with Alba over the past 20 years, but Alba chose to sue, Lowery said in February.
A “very fast review” done by Alcoa found nothing that deviated from standard practices, which prohibit improper activity by the company’s employees, partners and contractors, Lowery said.
The company wasn’t aware of any wrongdoing and would “vigorously defend” the lawsuit, he said.
Alba, which buys most of its alumina — a material used to make aluminum — from Alcoa and its affiliated companies, alleged the defendants bribed one or more former senior officials of Alba and the Bahrain government to persuade the company to cede a controlling interest in the company to Alcoa and to pay inflated prices for alumina.
The scheme began in 1993 and is ongoing, but was not found out until last year, the lawsuit claimed. The lawsuit also alleged the bribes were sent through a series of shell companies the defendants ultimately controlled.
Alcoa, the world’s third-largest aluminum producer, reported 2007 revenue of $30.75 billion, an all-time record.
Source: Yahoo Finance