Enforcement Action

 

Docket or Case Number:    14-cr-00246

Court:    D. Connecticut

Initiation Date:    12/22/2014  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • Daniel S. Kahn , Trial Attorney, Fraud Section, Criminal Division
  • Kathleen McGovern, Acting Chief, Fraud Section, Criminal Division
  • David E. Novick , Assistant United States Attorney
  • Michael J. Gustafson , First Assistant U.S. Attorney

Assisting Agencies:    Germany's Government Agency , United Kingdom's Serious Fraud Office , Switzerland Attorney General's Office , Komisi Pemberantasan Korupsi (Corruption Eradication Commission) , Italy's Government Agency , Saudi Arabia 's Government Agency , Cyprus Government Agency , Singapore’s Government Agency , Taiwan’s Government Agency

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    Foreign action

Whistleblower:    Unknown

Case Status:    Resolved


Summary

Alstom S.A. ("Alstom"), headquarted and incorporated in France, was in the business of designing, constructing, and providing services related to power generation facilities, power grids, and rail transportation systems around the world.

From approximately 1999 to 2011, Alstom and its subsidiaries bid on various power projects with state-owned and state-controlled companies in Indonesia, Saudi Arabia, Egypt, the Bahamas, and Taiwan. As part of this bidding process, Alstom and its subsidiaries made improper payments of approximately $75 million to consultants knowing that all or some of the money would be given to officials who had the ability to influence the award of the contracts. As a result of these payments, Alstom and its subsidiaries were awarded contracts valued at approximately $4 billion in multiple countries.

On December 22, 2014, the DOJ filed an information against Alstom, charging the company with violating the internal control and books and records provisions of the FCPA. At the same time, Alstom entered into a plea agreement with the DOJ, and agreed to pay a $772,290,000 criminal fine. On November 25, 2015, the court sentenced Alstom and ordered it to pay the abovementioned fine as well as a mandatory assessment of $800.

In a related proceeding also filed on December 22, 2014, the DOJ filed an information against and entered in a plea agreement with Alstom Network Schweiz AG, a subsidiary of Alstom and formerly known as Alstom Prom AG. On November 25, 2015, the court sentenced Alstom Network Schweiz and ordered it to pay a mandatory assessment of $400. No additional fine was imposed because of the $772,290,000 fine entered against Alstom.

Country(ies) involved:    Bahamas, Egypt, Indonesia, Saudi Arabia, Taiwan

Sanction to Bribe Ratio:    $772,290,800 / $75,000,000 = 1029.72 %

Sanction to Revenue Ratio:    $772,290,800 / $4,000,000,000 = 19.31 %

Sanction to Profit Ratio:    $772,290,800 / $296,000,000 = 260.91 %

Number of Related Enforcement Actions (Including This Enforcement Action):    7

Country(ies) involved:    Bahamas, Egypt, Indonesia, Saudi Arabia, Taiwan

Total $ Bribery Payments:    $75,000,000

Total $ Revenue Generated from Bribery:    $4,000,000,000

Total $ Profit Earned or Expenses Avoided from Bribery:    $296,000,000

Total $ Monetary Sanctions:    $860,294,800

Sanction to Bribe Ratio:    $860,294,800 / $75,000,000 = (1147.06 %)

Sanction to Revenue Ratio:    $860,294,800 / $4,000,000,000 = (21.51 %)

Sanction to Profit Ratio:    $860,294,800 / $296,000,000 = (290.64 %)

Name:    Alstom S.A.

Place of Incorporation:    France

HQ Country(ies):    France

Entity Type:    Public Company

FCPA Claims:    Books & Records, Primary, Issuer (15 U.S.C. § 78m (b)(2)(A)) ; Internal Controls, Primary, Issuer (15 U.S.C. § 78m(b)(2)(B)) ; Internal Controls, Primary, Knowing Violation (15 U.S.C. § 78m(b)(5)) ; Internal Controls, Primary, Issuer [Willful] (15 U.S.C. § 78m (b)(2)(B); 15 U.S.C. § 78ff(a)) ; Internal Controls, Aiding and Abetting/Causing (18 U.S.C. § 2, 15 U.S.C. § 78m (b)(2)(B), and/or 15 U.S.C. § 78m(b)(5)) ; Books & Records, Primary, Knowing Violation (15 U.S.C. § 78m (b)(5)) ; Books & Records , Aiding and Abetting/Causing (18 U.S.C. § 2, 15 U.S.C. § 78m (b)(2)(A), and/or 15 U.S.C. § 78m(b)(5)) ; Books & Records, Primary, Issuer [Willful] (15 U.S.C. § 78m (b)(2)(A); 15 U.S.C. § 78ff(a))

Related Claims:    N/A

Statutory Basis for FCPA Jurisdiction:    Issuer

Period of Bribery:   1999 - 2011

Total Bribery Payments:    $75,000,000

Total Revenue Generated from Bribery:    $4,000,000,000

Total Profit Earned or Expenses Avoided from Bribery:    $296,000,000

Country(ies) involved:    Bahamas, Egypt, Indonesia, Saudi Arabia, Taiwan

Officials Potentially Influenced (Name; Title; Organization): 

  • Name N/A, Official; Egyptian Electricity Holding Company ("EEHC")
  • Name N/A, Officials; Egyptian government
  • Name N/A, Officials; Taipei's Department of Rapid Transit System, known as "DORTS"
  • Name N/A, Officials; Perusahaan Listrik Negara ("PLN")
  • Name N/A, Official; Saudi Electric Company ("SEC")
  • Asem M. Elgawhary; General Manager; Power Generation Engineering & Service Co. ("PGESCo")
  • Official 6; Official; Saudi Electric Company ("SEC")
  • Official 8; Board Member; Bahamas Electricity Corporation ("BEC')

Defendant-Related Entities Involved in the Misconduct:    N/A

Third-Party Intermediary:   

  • Consultant A , Agent/Consultant/Broker
  • Consultant B , Agent/Consultant/Broker
  • Consultant E, known as "London" , Agent/Consultant/Broker
  • Consultant F , Agent/Consultant/Broker
  • Consultant G , Agent/Consultant/Broker
  • Consultant I , Agent/Consultant/Broker
  • Consultant J , Agent/Consultant/Broker
  • Consultants , Agent/Consultant/Broker
  • Mr. Geneva (Consultant C) , Agent/Consultant/Broker
  • Mr. Paris (Consultant D) , Agent/Consultant/Broker

Type of Bribe:   Money, Charitable Donation, Travel/Lodging, Entertainment/Recreation

Cash, Wire or Check:    Wire Transfer, Check/Bank Draft

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Indonesia

Period of Bribery:   2002 – 2009

Total Bribery Payments:    N/A

Total Revenue Generated from Bribery:    $378,000,000

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Indonesia

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Officials; Perusahaan Listrik Negara ("PLN");

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Consultant A - Agent/Consultant/Broker
Consultant B - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    N/A

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Saudi Arabia

Period of Bribery:   2000 – 2002

Total Bribery Payments:    $51,200,000

Total Revenue Generated from Bribery:    $3,000,000,000

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Saudi Arabia

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Official; Saudi Electric Company ("SEC");
  • Official 6; Official; Saudi Electric Company ("SEC");

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Consultant E, known as "London" - Agent/Consultant/Broker
Consultant F - Agent/Consultant/Broker
Mr. Geneva (Consultant C) - Agent/Consultant/Broker
Mr. Paris (Consultant D) - Agent/Consultant/Broker

Type of Bribe:   Money, Charitable Donation

Cash, Wire or Check:    N/A

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Egypt

Period of Bribery:   2002 – 2011

Total Bribery Payments:    $3,000,000

Total Revenue Generated from Bribery:    $175,000,000

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Egypt

Officials Potentially Influenced (Name; Title; Organization):  

  • Asem M. Elgawhary; General Manager; Power Generation Engineering & Service Co. ("PGESCo");
  • Name N/A, Official; Egyptian Electricity Holding Company ("EEHC");
  • Name N/A, Officials; Egyptian government;

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Consultant G - Agent/Consultant/Broker
Consultants - Agent/Consultant/Broker

Type of Bribe:   Money, Travel/Lodging, Entertainment/Recreation

Cash, Wire or Check:    Wire Transfer

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Bahamas

Period of Bribery:   1999 – 2004

Total Bribery Payments:    $325,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Bahamas

Officials Potentially Influenced (Name; Title; Organization):  

  • Official 8; Board Member; Bahamas Electricity Corporation ("BEC');

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Consultant I - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    Check/Bank Draft

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Taiwan

Period of Bribery:   2001 – 2008

Total Bribery Payments:    $380,000

Total Revenue Generated from Bribery:    $15,000,000

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Taiwan

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Officials; Taipei's Department of Rapid Transit System, known as "DORTS";

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Consultant J - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    N/A

Purpose of Bribe:    Obtain/retain business

Misconduct by Subsidiary?  Yes


Parent(s):   Alstom S.A.

Subsidiary:  Alstom Power, Inc.

  • Percentage of Ownership:    N/A
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    Yes
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    Yes

Subsidiary:  Alstom Grid, Inc.

  • Percentage of Ownership:    N/A
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    Yes
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    Yes

Subsidiary:  Alstom Network Schweiz AG

  • Percentage of Ownership:    N/A
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    Yes
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    Yes

Subsidiary:  PT Energy Systems Indonesia

  • Percentage of Ownership:    N/A
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    Yes
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    Yes

M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     Yes

Type of Transaction:    Acquisition


Successor(s):   General Electric Company

Predecessor:  Alstom S.A.

  • Nature of Misconduct   
    • Misconduct Occurred Solely Pre-acquisition:    Yes
    • Misconduct Occurred Pre- and Post-acquisition, with NO Knowledge and/or Involvement of Successor:    No
    • Misconduct Occurred Pre and Post-acquisition, with Knowledge and/or Involvement of Successor:    No
  • Quality of Due Diligence:    N/A
  • Voluntary Disclosure by Successor in Connection with the Transaction:    No
  • DOJ Opinion Sought in Connection with Transaction:    No
  • Successor Liable for Predecessor Misconduct? :    No

  

Re: Alstom S.A.

  • Inadequate internal controls or auditing
  • Inadequate anti-corruption compliance policies, procedures, or program
  • Inadequate safeguards concerning use of third parties
  • Inadequate supervision of subsidiaries and/or employees

Mitigating Factors Referenced by the Government (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
Alstom S.A.      

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
Alstom S.A.  

Total Monetary Sanctions for the Action:    $772,290,800

Case Status:    Resolved


Disposition:    Plea Agreement

Date of Disposition:    12/22/2014

Alstom S.A.

—  Total Monetary Sanctions for Defendant:    $772,290,800

—  Organizational Probation:    None

—  Compliance Obligation:    Yes

—  Reporting Obligation:    Hybrid

—  Admission of Guilt/Acceptance of Responsibility:    Yes

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