As French industrial conglomerate Alstom SA finished out the year by inking a deal with U.S. authorities for a record-setting $772 million FCPA settlement, other bribery probes into Alstom units are continuing in Europe in the new year.
Poland and the United Kingdom have bribery investigations under way, with some charges already filed and additional charges possible, according to published reports.
Alstom’s Polish unit, Alstom Konstal, has been under investigation by authorities regarding how the firm won contracts in 1998 and 2000 to supply carriages and trams for Warsaw’s public transit system, according to a recent report in Reuters. So far regional prosecutors have charged two former Alstom Konstal employees with inflicting severe financial damage on the company and failing to adequately act in the company’s interest, have charged two Warsaw city council employees with accepting bribes, and have charged another individual with serving as middleman, Reuters reported. A spokeswoman for the prosecutor’s office told Reuters that the investigation will be extended beyond the previous Feb. 28 deadline, and additional charges are possible in the case.
Britain’s Serious Fraud Office announced the launch of criminal proceedings against Alstom last July for corruption and conspiracy to corrupt in connection with large transportation projects in India, Poland, and Tunisia. The alleged violations occurred between June 2000 and November 2006, and involved Alstom’s U.K. subsidiary, Alstom Network UK Ltd., formerly known as Alstom International Ltd.
The SFO said its investigation into the French industrial giant was triggered by information provided from Switzerland’s Office of the Attorney General regarding Alstom Group and its U.K. subsidiary.
At year’s end, two former employees of Alstom subsidiary Alstom Power Ltd. appeared in a London court for bribery offenses allegedly committed to win energy contracts in Lithuania between February 2002 and March 2010, according to a report in Bloomberg. The former employees, Nicholas Reynolds and Johanes Villi Venskus, were due back in court this week, Bloomberg reported. The SFO typically does not comment on court proceedings until their conclusion.
The bribery allegations have been a long-running headache for the company, which is the midst of a $15 billion deal with General Electric to sell off a major portion of Alstom’s energy business. In 2011, Switzerland fined Alstom 38.5 million Swiss francs for lapses in its compliance program, which authorities said led to company officials committing bribery in Tunisia, Latvia, and Malaysia. Alstom also is one of the companies involved in Brazil’s ongoing probe into contracts awarded for the Sao Paulo metro system.
In addressing its deal with U.S. authorities to settle FCPA charges, Alstom pointed to the work it has done to bolster its compliance program, including dropping the use of external “success fee based” sales consultants and the hiring of a monitor to oversee its compliance efforts.
“There were a number of problems in the past and we deeply regret that,” Alstom chief executive officer Patrick Kron said in the company’s statement. “However, this resolution with the DOJ allows Alstom to put this issue behind us and to continue our efforts to ensure that business is conducted in a responsible way, consistent with the highest ethical standards.”
Under Alstom’s agreement with the U.S. Department of Justice, no part of the cost of settlement can be passed onto GE as part of the sale.