Alstom nears $700M settlement with U.S.
Alstom, the French engineering giant whose power and grid businesses are being acquired by General Electric (GE), is in settlement talks with U.S. investigators over evidence of foreign bribery.
The company is nearing an approximately $700 million agreement with the U.S. Department of Justice to settle the allegations, The Wall Street Journal and other media organizations reported, citing information from unidentified people familiar with the matter.
"Alstom confirms the existence of discussions with the U.S. Department of Justice with respect to its current investigations. Further information will be disclosed in due course," the company said in a statement Wednesday.
Alstom shares were down more than 2% at 26.66 Euros in Wednesday trading in Paris.
An agreement of the magnitude under discussion could mark the largest single corporate settlement under the U.S. Foreign Corrupt Practices Act. Enacted in 1977, the anti-corruption statute makes it illegal for companies and their employees to make payments to foreign government officials with the goal of obtaining or retaining business.
Alstom has been the focus of several corporate bribery cases in recent years. William Pomponi, an Alstom vice president for regional sales, pleaded guilty in July to U.S. allegations that he and co-conspirators funneled bribes through intermediaries to win a construction deal for a power plant project in Indonesia.
The Alstom negotiations come amid stepped-up federal enforcement efforts.
U.S. engineering firm KBR (KBR)agreed to pay $579 million in 2009 to settle U.S. allegations it bribed Nigerian officials to win contracts for a liquefied natural gas project. Alcoa (AA) in January agreed to pay $384 million in penalties to settle charges it bribed officials in Bahrain. And an Avon Products (AVP) subsidiary on Wednesday agreed to a $135 million settlement of criminal and civil charges that the company improperly gave gifts and payments to China officials while seeking approval to sell its beauty products there.
Separately, the Department of Justice is investigating allegations by a former Wal-Mart official that company executives in Mexico paid millions of dollars to government officials there in a successful bid to speed the opening of new stores.
Alstom's move to settle with federal officials comes as General Electric is nearing the official closing of its $17 billion deal for the French company's core businesses. The French government endorsed the deal in June and said it would take a 20% ownership stake in Alstom.