The UK Serious Fraud Office brought new charges Thursday against a UK subsidiary of Alstom SA and an Alstom employee for alleged corruption in a project to supply trains to the Budapest Metro.
The SFO charged Alstom Network UK Ltd with one offense under section 1 of the Prevention of Corruption Act 1906, and two offenses of conspiracy to corrupt under section 1 of the Criminal Law Act 1977.
Michael John Anderson, 54, of Kenilworth in Warwickshire, UK, was charged with the same offenses. He was working as a business development director for Alstom Transport SA in France, the SFO said.
The SFO said Thursday’s charges are the third phase of the UK prosecution of Paris-based Alstom.
In July 2014, the SFO charged Alstom Network UK Ltd and British nationals Graham Hill and Robert Hallett with corruption in India, Poland, and Tunisia. The trial in that case is set to start in May 2016.
Alstom manufactures rail, power, and energy equipment. It has more than 93,000 employees worldwide.
In June last year, Alstom agreed to sell its power business to General Electric for €12.4 billion ($15.6 billion).
In the United States, Alstom pleaded guilty in December last year to violating the Foreign Corrupt Practices Act by bribing officials in Indonesia, Saudi Arabia, Egypt, and the Bahamas. It paid the DOJ $772 million in criminal penalties to settle the charges. The fine was the biggest criminal penalty for FCPA offenses and the second biggest FCPA enforcement action overall.
Also in December, the SFO charged a British subsidiary of Alstom and two employees with bribing officials at a state-controlled Lithuanian energy company. The bribes were intended to help sell equipment to a power plant in Elektrenai, west of the capital Vilnius.
The SFO started its investigation of Alstom’s UK unit with information from the Swiss attorney general’s office.
In 2008, Swiss police arrested a former Alstom manager and searched for evidence as part of a corruption and money-laundering probe. Police raided offices near Zurich and in Baden, along with homes in several cantons.
The Swiss attorney general fined Alstom about $40 million in 2011 for corporate negligence for failing to stop overseas bribery.
Marubeni Corporation, Alstom’s consortium partner on the Indonesia project, pleaded guilty in March 2014 to one count of conspiracy to violate the Foreign Corrupt Practices Act and seven counts of violating the FCPA. The Japanese trading company paid a criminal fine of $88 million.
A former Bechtel executive pleaded guilty in the U.S. in December to mail fraud, conspiring to launder money, and tax fraud. Asem Elgawhary admitted accepting kickbacks from Alstom and other companies when he worked in Egypt for a Bechtel venture with the Egyptian Electricity Holding Company. In his plea agreement, Elgawhary agreed to serve 42 months in prison and forfeit $5.2 million.
The SFO said Thursday the alleged offenses involving the supply of trains to the Budapest Metro happened from 2006 to late 2007.
The first hearing in the new case is scheduled to take place at London’s Westminster Magistrates’ Court in May.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.