Alstom S.A., a French power and transportation company, on December 22 pleaded guilty to bribing government
officials – in countries including Indonesia, Saudi Arabia, Egypt and the
Bahamas – and falsifying accounting records in violation of the Foreign Corrupt
Practices Act (“FCPA”). The FCPA makes it unlawful for certain classes
of persons and entities to make payments to foreign government officials to
assist in obtaining or retaining business. In addition, the FCPA’s accounting provision
requires companies to make and keep books and records that accurately and
fairly reflect the transactions of the corporation and to devise and maintain
an adequate system of internal accounting controls.
Over the course of a four-year
investigation, the Department of Justice (the “DOJ”) discovered that Alstom had
employed consultants to make improper payments to foreign officials in various
countries around the world. These improper payments assisted Alstom in
obtaining projects in the power generation, power transmission, and
transportation sectors. For instance, in Indonesia, Alstom paid bribes
to a high-ranking member of the Indonesian Parliament and to high-ranking
members of one of the state-owned electricity companies. The charges against Alstom also included the
payment of tens of millions of dollars in bribes to secure $4 billion in
projects, the falsification of books and records, and failure to implement
adequate internal controls. By pleading guilty to these charges, Alstom is
agreeing to pay a criminal penalty of more than $772 million. This criminal penalty represents the largest
penalty ever assessed in a FCPA case.
Through this historic settlement, the DOJ
is sending out a clear message to corporations, not just in the United States,
but all over the world: “that [it] will be relentless in rooting out and
punishing corruption to the fullest extent of the law, no matter how sweeping
its scale or how daunting its prosecution.” With this resolution, the DOJ is announcing
that it will zealously investigate and prosecute FCPA violations. The
resolution provides insight for corporations acquiring foreign businesses and
reassures the public that if corporations are not in compliance with the FCPA,
they will be severely fined. This leap forward suggests new themes in the DOJ’s
enforcement strategy and
demonstrates the DOJ’s willingness to impose penalties. Importantly, it also
sheds light on the significance of establishing compliance programs within
corporations in order to avoid future FCPA violations.
of Justice, Alstom Pleads Guilty and
Agrees to Pay $772 Million Criminal Penalty to Resolve Foreign Bribery Charges, U.S. Dep’t of Justice (Dec. 22,
 Dep’t of Justice, Foreign Corrupt
Practices Act: An Overview, U.S.
Dep’t of Justice, http://www.justice.gov/criminal/fraud/fcpa/.
 Id. (this provision applies only to
companies whose securities are listed in the United States).
 Debevoise & Plimpton, Alstom’s $772
Million FCPA Settlement: The Wages of Late Cooperation and Other Lessons of the
Settlement, FCPA Update: A Global
Anti-Corruption Newsletter, Dec. 2014, at 1, 1.
 Dep’t of Justice, supra note 1.
 Alstom SA to Plead Guilty to Bribery Charges, NEWS.NET (Dec. 22, 2014, 9:14 AM), http://usa.news.net/article/2529274/alstom-sa-to-plead-guilty-to-bribery-charges (no longer available).
of Justice, supra note 1.
 Debevoise & Plimpton, supra note
4, at 4.
Posted by Maria R. Mendoza on Tue. January 27, 2015 12:11 PM
Corruption, Criminal Law, France