The Wall Street Journal reported yesterday (here) that the Justice Department is “investigating payments that Bahraini prosecutors allege were made by units of Japanese commodities-trading giant Sojitz Group to employees of an aluminum producer in Bahrain.” The story says $8.7 million in alleged bribes to employees at Aluminum Bahrain BSC, or Alba, were paid into secret accounts they controlled in Liechtenstein banks. Some of the payments reportedly passed through U.S. banks.
Sojitz acts as a broker for Alba’s products, including aluminum billet and alloys. It allegedly enjoyed lower prices in exchange for the payments. The DOJ investigation of Sojitz, which does some business in the U.S., is reportedly based on information provided by Bahraini authorities. The Journal said they “have shared their findings with U.S. Justice Department prosecutors, according to people briefed on the investigation.” The payments were allegedly made by units of Nissho Iwai, which merged with Nichimen in 2004 to form Sojitz.
In March 2008, Alba — majority owned by the government of Bahrain — sued Alcoa Inc., its long-time raw materials supplier, for corruption and fraud. The federal court suit in Pittsburg alleged that Alba paid $2 billion in overcharges during a 15-year period. The money, according to the suit, first went to overseas accounts controlled by Alcoa’s agent and some was then used to bribe Alba’s executives in return for more supply contracts. The Justice Department quickly intervened in the case, asking the court for a stay while the government investigates possible criminal violations of the Foreign Corrupt Practices Act and other laws by Alcoa and its executives and agent. Alcoa has denied any wrongdoing and said it is cooperating with the DOJ.
The Wall Street Journal said Bahrain filed a money-laundering indictment against two former Alba employees accused of taking kickbacks from Sojitz.
The Justice Department hasn’t commented on the Alcoa investigation or the Wall Street Journal’s story naming Sojitz.
Read prior posts about Alba and Alcoa here.