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Thu January 9, 2014
Alcoa Will Pay $384 Million Penalty For Bahrain Bribes
Originally published on Fri January 10, 2014 6:05 am
In what's being called one of the largest U.S. anti-corruption settlements on record, Alcoa and an affiliate it controls have agreed to pay millions in fines and criminal and civil penalties. The companies acknowledge paying bribes to royal family members in Bahrain.
According to the SEC, "Alcoa will pay $175 million in disgorgement of ill-gotten gains, of which $14 million will be satisfied by the company's payment of forfeiture in the parallel criminal matter. Alcoa also will pay a criminal fine of $209 million."
NPR's John Ydstie reports for Friday's Morning Edition:
"Alcoa World Alumina, a joint venture majority owned by Alcoa, admitted that it paid tens of millions of dollars in kickbacks through shell corporations to members of the Bahraini royal family. The bribes were made to ensure the companies' right to supply alumina, a raw material used to make aluminum, to a state-owned company in Bahrain.
"The firms made separate settlements with the U.S. Justice Department and the Securities and Exchange Commission. The charges came under the Foreign Corrupt Practices Act that prohibits the bribery of foreign officials."
"The bribes were paid as far back as 1989 and Alcoa has already settled another legal suit involving the corrupt activity," John adds.
The company's stock slumped after the settlement was announced – and after Alcoa also announced it had missed Wall Street analysts' quarterly earnings estimates.
The news comes months after Alcoa was removed from the Dow Industrial Average along with several other companies, as Mark reported. That move was attributed to the corporations' sagging stock prices.