LaFargeHolcim, a global construction materials and solutions company, made front-page headlines this past week, when both the Financial Times and the New York Times ran stories about the company's operations in Syria and how it funded terrorists groups, like ISIS, to keep a cement plant operating.
Now, French authorities are investigating two former company CEOs who authorized and had knowledge of the payments. The cement plant was in Jalabiya, Syria. LaFargeHolcim acquired the company in 2007, and by 2011 the unrest that had been unleashed in the country was threatening the facility.
LaFargeHolcim, however, chose not to close it down or even evacuate it, believing that if it stayed open and operating, it would be well placed to sell cement to rebuild the country. This insane thirst for profits would put not only the plant workers in danger, but also lead to payments of hundreds of thousands of dollars to known terrorist organizations to fund their activities.
The company paid out over $5 million in two years as bribes, protection, and extortion monies to keep the plant going. Local managers tried to evade internal controls by submitting fake invoices to fund the payments. Unfortunately, the company headquarters was apprised on a regular basis of these payments, their purpose, and the terrorist groups the payments were directed to.
Things were even worse for plant employees, who were shot at on their drive into the plant. When plant employees complained about their safety, they were told if they did not come into the plant, they would be terminated.
The company is now under investigation by French authorities for its actions. It says it is cooperating and wants to move past the scandal. The two former CEOs deny they knew anything and that it was rogue employees in the company who made or approved the payments. The new CEO said LaFarge is currently, “a different company.”