Legal News

On Alcoa and Bahrain, the FCPA Investigation Du Jour:

By Ashby Jones

The Foreign Corrupt Practices Act. Learn it, live it, love it. Because it appears it’s here to stay.

The latest in a growing list of high-profile foreign bribery cases involves metals giant Alcoa and the Persian Gulf state Bahrain. According to this story out Tuesday, written by the WSJ’s Amir Efrati, US and UK prosecutors are investigating a prominent Canadian businessman for money laundering and bribery as part of a two-year investigation centering on Alcoa.

According to the story, the prosecutors have unearthed new documents that they believe show the involvement of Victor Dahdaleh, a longtime agent of Alcoa who helped negotiate contracts with companies in the Middle East and elsewhere.

No charges have been filed against Dahdaleh, a Canadian citizen in his 60s who lives in London. His lawyer declined comment.

Since 2008, reports Efrati, U.S. prosecutors have been investigating whether Pittsburgh-based Alcoa was involved in bribing government officials in the Persian Gulf state of Bahrain in exchange for business in possible violation of the FCPA, according to people familiar with the matter.

Representatives of Alcoa and Alba, a Bahrain government-owned manufacturing company, said they are cooperating with authorities. A spokeswoman for the U.S. Justice Department and a spokesman for the U.K.’s Serious Fraud Office declined to comment.

Prosecutors now have private financial records that they believe show that from 2001 to 2005, a company controlled by Dahdaleh made several million dollars in payments to the personal bank account of a former Alba senior executive.

The criminal investigation involving Alcoa was triggered by a 2008 private civil lawsuit filed by Alba in the U.S. The suit, which sought monetary damages, accused Alcoa and Dahdaleh of conspiring to overcharge Alba for its purchase of thousands of tons of alumina, which is used to make aluminum. At the time, a spokesman for Dahdaleh said he would be “vigorously contesting” the charges. An Alcoa spokesman said the company would “vigorously defend” itself.

The overpayments totaled hundreds of millions of dollars over 15 years, Alba alleged. In exchange for the overpayments, Alcoa and Dahdaleh allegedly paid kickbacks to at least one senior official at Alba, according to the lawsuit.

Full post as published by Law Blog - WSJ.com on April 06, 2010 (boomark / email).