Alstom Pleads Guilty in FCPA Case

Alstom S.A., a French power and transportation company, pled guilty and will pay a $772,290,000 fine to resolve charges related to a widespread scheme involving tens of millions of dollars in bribes in countries around the world, including Indonesia, Saudi Arabia, Egypt and the Bahamas.

Alstom was represented by Robert Luskin and Jay Darden of Squire Patton Boggs in Washington, D.C.


“Alstom’s corruption scheme was sustained over more than a decade and across several continents,” said Deputy Attorney General James Cole.  “It was astounding in its breadth, its brazenness and its worldwide consequences.  And it is both my expectation – and my intention – that the comprehensive resolution we are announcing today will send an unmistakable message to other companies around the world: that this Department of Justice 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.”

Alstom pled guilty to a two-count criminal information filed in the U.S. District Court for the District of Connecticut, charging the company with violating the Foreign Corrupt Practices Act (FCPA) by falsifying its books and records and failing to implement adequate internal controls.

Alstom admitted its criminal conduct and will pay a criminal penalty of $772,290,000.  U.S. District Judge Janet B. Arterton of the District of Connecticut scheduled a sentencing hearing for June 23, 2015 at 3pm.

In addition, Alstom Network Schweiz AG, formerly Alstom Prom, Alstom’s Swiss subsidiary, pled guilty to a criminal information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA.

Alstom Power Inc. , a U.S. subsidiary, was charged with an information and entered into a deferred prosecution agreement.

Alstom Grid Inc.,  a U.S. subsidiary, entered into a deferred prosecution agreement.  

Alstom Power is headquartered in Windsor, Connecticut, and Alstom Grid, formerly Alstom T&D, was headquartered in New Jersey.

Alstom, Alstom Prom, Alstom Power and Alstom Grid, through various executives and employees, paid bribes to government officials and falsified books and records in connection with power, grid and transportation projects for state-owned entities around the world, including in Indonesia, Egypt, Saudi Arabia, the Bahamas and Taiwan.

In Indonesia, for example, Alstom, Alstom Prom, and Alstom Power paid bribes to government officials – including a high-ranking member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara, the state-owned electricity company in Indonesia – in exchange for assistance in securing several contracts to provide power-related services valued at approximately $375 million.  In total, Alstom paid more than $75 million to secure $4 billion in projects around the world, with a profit to the company of approximately $300 million.

Alstom and its subsidiaries also attempted to conceal the bribery scheme by retaining consultants purportedly to provide consulting services on behalf of the companies, but who actually served as conduits for corrupt payments to the government officials.  Internal Alstom documents refer to some of the consultants in code, including “Mr. Geneva,” “Mr. Paris,” “London,” “Quiet Man” and “Old Friend.”

The plea agreement cites many factors considered by the department in reaching the appropriate resolution, including:  Alstom’s failure to voluntarily disclose the misconduct even though it was aware of related misconduct at a U.S. subsidiary that previously resolved corruption charges with the department in connection with a power project in Italy; Alstom’s refusal to fully cooperate with the department’s investigation for several years; the breadth of the companies’ misconduct, which spanned many years, occurred in countries around the globe and in several business lines, and involved sophisticated schemes to bribe high-level government officials; 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.

After the department publicly charged several Alstom executives, however, Alstom began providing thorough cooperation, including assisting the department’s prosecution of other companies and individuals.

To date, the department has announced charges against five individuals, including four corporate executives of Alstom and its subsidiaries, for alleged corrupt conduct involving Alstom.

Frederic Pierucci, Alstom’s former vice president of global boiler sales, pled guilty on July 29, 2013, to conspiring to violate the FCPA and a charge of violating the FCPA for his role in the Indonesia bribery scheme.

David Rothschild, Alstom Power’s former vice president of regional sales, pled guilty on Nov. 2, 2012, to conspiracy to violate the FCPA.

William Pomponi, Alstom Power’s former vice president of regional sales, pled guilty on July 17, 2014, to conspiracy to violate the FCPA.

Lawrence Hoskins, Alstom’s former senior vice president for the Asia region, was charged in a second superseding indictment on July 30, 2013, and is pending trial in the District of Connecticut in June 2015.

The charges against Hoskins are merely allegations, and he is presumed innocent unless and until proven guilty.

The high-ranking member of Indonesian Parliament was also convicted in Indonesia of accepting bribes from Alstom, and is currently serving a three-year term of imprisonment.

In connection with a corrupt scheme in Egypt, Asem Elgawhary, the general manager of an entity working on behalf of the Egyptian Electricity Holding Company, a state-owned electricity company, pled guilty on Dec. 4, 2014, in federal court in the District of Maryland to mail fraud, conspiring to launder money, and tax fraud for accepting kickbacks from Alstom and other companies.

In his plea agreement, Elgawhary agreed to serve 42 months in prison and forfeit approximately $5.2 million in proceeds.


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