Almost a year after pleading guilty to violating the U.S. Foreign Corrupt Practices Act (FCPA) by falsifying its books and records and failing to implement adequate internal controls, French power and transportation company Alstom SA was fined $772 million on Friday in U.S. District Court in Connecticut. Alstom is the company that admitted in U.S. federal court to paying bribes over a decade ago to secure favors from the Bahamas Electricity Corporation (BEC).
Word of the fine -- the largest criminal fine every imposed in an FCPA case -- surfaced after Alstom pleaded guilty on December 22, 2014, to a two-count criminal indictment accusing the company of a widespread corruption scheme involving at least $75 million in secret bribes paid to government officials in countries around the world, including The Bahamas. The company admitted to bribing government officials and falsifying its books and records in connection with power, grid and transportation projects for state-owned entities around the world.
The court proceedings revealed that Alstom paid more than US$75 million to secure more than $4 billion in projects around the world, with a profit to the company of approximately US$300 million.
Fred Ramsey was charged in a magistrates court with accepting more than $600,000 in bribes from Alstom over a decade ago to help the company land BEC contracts. The 78-year-old former BEC board member was arraigned on four counts of conspiracy to commit bribery and 14 counts of bribery. Prosecutors allege that Ramsey accepted a total of $651,788.90 between 1999 and February 2003. And while it has been alleged that Ramsey acted with others, he was the only one who faced charges. Ramsey pleaded not guilty to all charges.
Observers say the sentence reflects a number of factors, including: Alstom's failure to voluntarily disclose the misconduct, even though it was aware of related misconduct at a U.S. subsidiary; Alstom's refusal to fully cooperate with the department's investigation for several years; the breadth of the company's misconduct, which spanned many years, occurred in countries around the globe and in several business lines, and involved sophisticated schemes to bribe high-level government officials; Alstom's lack of an effective compliance and ethics program at the time of the conduct; and Alstom's prior criminal misconduct, including conduct that led to resolutions with various other governments and the World Bank.
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