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Alstom settles bribes

WASHINGTON, DC: French rail and power company Alstom has been fined US$772.3 million by the U.S. Department of Justice (DoJ) for using intermediaries to bribe government officials and executives in Indonesia, Saudi Arabia, Egypt and the Bahamas.

According to the DoJ, Alstom paid more than US$75 million to what the company describes as "Sales Consultants" to secure US$4 billion in sales and subsequent profits of US$300 million.

Alstom pleaded guilty to two charges that it violated the U.S. Foreign Corrupt Practices Act by falsifying its books and records and failing to implement adequate internal controls.

"Alstom's corruption scheme was sustained over more than a decade and across several continents," said DoJ deputy attorney general James Cole. "It was astounding in its breadth, its brazenness and its worldwide consequences."

The companies involved - Alstom, Alstom Prom, Alstom Power and Alstom Grid - admittAlstomed paying bribes and falsifying books and records in connection with power, grid and transportation projects for state-owned entities.

The DoJ cited one example where said Alstom bribed  Indonesian government officials – including a member of Parliament and senior executives of Perusahaan Listrik Negara, the state-owned electricity company – in exchange for securing contracts worth US$375 million.

According to the plea agreement, the size of the fine reflects Alstom's refusal to "fully cooperate with the department's investigation for several years... 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."

Commenting on the settlement, Alstom CEO Patrick Kron said: "There were a number of problems in the past and we deeply regret that. 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. He added he relies "on each of our employees to be an example of irreproachable honesty under all circumstances." Kron has been chairman of Alstom since 2003.

Earlier this month the company signed a 25-year freight and passenger maintenance contract with the Kazakh national railway company worth €1.3 billion. With almost 20,000 km of tracks, Kazakhstan's rail network is the world's third largest using the 1.52 metre gauge. Alstom began supplying electric locomotives to the country in June 2010.

With sales of €20.3 billion in 2013/2014, the French engineering conglomorate provides rail infrastructure and power generation services in 100 countries.

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