Today represents a significant milestone in the global fight against corruption. It demonstrates the Department of Justice’s strong commitment to fighting foreign bribery and ensuring that both companies and individuals are held accountable when they violate the FCPA. The guilty pleas and resolutions announced today also highlight what can happen when corporations refuse to disclose wrongdoing and refuse to cooperate with the department’s efforts to identify and prosecute culpable individuals.
Let me first explain how the scheme worked. To conceal that it was the source of payments to government officials, Alstom funneled the bribes through third-party consultants who did little more than serve as conduits for corruption. Alstom then dummied up its books and records to cover up the scheme.
Alstom’s corruption spanned the globe, and was its way of winning business. For example, in Indonesia, Alstom and certain of its subsidiaries used consultants to bribe government officials – including high-ranking members of the Indonesian Parliament and the state-owned and state-controlled electricity company – to win several contracts to provide power-related services. According to internal documents, when certain officials expressed displeasure that a particular consultant had provided only “pocket money,” Alstom retained a second consultant to ensure that the officials were satisfied.
In Saudi Arabia, Alstom retained at least six consultants, including two close family members of high-ranking government officials, to bribe officials at a state-owned and state-controlled electricity company to win two projects valued at approximately $3 billion. As evidence that Alstom employees recognized that their conduct was criminal, internal company documents refer to the consultants only by code name.
Alstom similarly used consultants to bribe officials in Egypt and the Bahamas, and again Alstom employees clearly knew that the conduct violated the law. In connection with a project in Egypt, a member of Alstom’s finance department sent an email questioning an invoice for consultant services and, in response, was advised that her inquiry could have “several people put in jail” and was further instructed to delete all prior emails regarding the consultant.
If approved by the court, Alstom’s criminal penalty of $772 million represents the largest penalty ever assessed by department in a FCPA case. Through Alstom’s parent-level guilty plea and record-breaking criminal penalty, Alstom is paying a historic price for its criminal conduct -- and for its efforts to insulate culpable corporate employees and other corporate entities. Alstom did not voluntarily disclose the misconduct to law enforcement authorities, and Alstom refused to cooperate in a meaningful way during the first several years of the investigation. Indeed, it was only after the department publicly charged several Alstom executives – three years after the investigation began – that the company finally cooperated.
One important message of this case is this: While we hope that companies that find themselves in these situations will cooperate with the department of Justice, we do not wait for or depend on that cooperation. When Alstom refused to cooperate with the investigation, we persisted with our own investigation. We built cases against the various corporate entities and against culpable individuals. To date, the department publicly has charged four Alstom corporate executives in connection with the corrupt scheme in Indonesia, which also chose not to cooperate, and another company’s executive in connection with the scheme in Egypt. Four of these individuals already have pleaded guilty. In addition, Marubeni Corporation, a Japanese trading company that partnered with Alstom in Indonesia, pleaded guilty to conspiracy to violate the anti-bribery provisions of the FCPA and substantive violations of the FCPA, and paid an $88 million criminal penalty.
Another important message from this case is that the U.S. increasingly is not alone in the fight against transnational corruption. Earlier this year, Indonesia’s Corruption Eradication Commission, the KPK, assisted the department in its investigation. And, in turn, the department shared with the KPK information that federal investigators had obtained, which the KPK used in its prosecution of a former member of the Indonesian Parliament for accepting bribes from Alstom-funded consultants. This past spring, that Indonesian official was found guilty and sentenced to three years in an Indonesian prison. Our partnership with Indonesian law enforcement authorities in this case means that both the bribe payors and bribe takers have been prosecuted. And our investigation is not over yet.
This case is emblematic of how the Department of Justice will investigate and prosecute FCPA cases – and other corporate crimes. We encourage companies to maintain robust compliance programs, to voluntarily disclose and eradicate misconduct when it is detected, and to cooperate in the government’s investigation. But we will not wait for companies to act responsibly. With cooperation or without it, the department will identify criminal activity at corporations and investigate the conduct ourselves, using all of our resources, employing every law enforcement tool, and considering all possible actions, including charges against both corporations and individuals.
I especially would like to thank the prosecutors from the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the District of Connecticut, and the talented agents from the FBI, for their extraordinary work in this matter. I also would like to thank the U.S. Attorney’s Office for the District of New Jersey and the U.S. Attorney’s Office for the District of Maryland for their work on related cases. And I am grateful to the Criminal Division’s Office of International Affairs for the substantial and expert assistance that it provided.
In addition to our Indonesian counterparts, I would like to acknowledge the valuable assistance that our law enforcement partners in Switzerland, the United Kingdom, Singapore, Italy, Saudi Arabia, Taiwan, Cyprus, and Germany have provided in this matter. We are grateful for their assistance and look forward to working with them and our other international partners in the future.