Friday, July 18, 2014

Corruption: US - Exec of French power company subsidiary guilty in bribery scheme

U.S. Department of Justice
Office of Public Affairs

WASHINGTON—A former senior executive of a subsidiary of Alstom SA, the French power and transportation company, pleaded guilty today for his participation in a scheme to pay bribes to foreign government officials.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Michael J. Gastafson of the District of Connecticut and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

William Pomponi, a former vice president of regional sales at Alstom Power Inc., the Connecticut-based power subsidiary of Alstom, pleaded guilty today in federal court in New Haven, Connecticut, to a criminal information charging him with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) in connection with the awarding of the Tarahan power project in Indonesia. Pomponi was charged in a second superseding indictment on July 30, 2013. Pomponi is the fourth defendant to plead guilty to charges stemming from this investigation. Frederic Pierucci, the vice president of global boiler sales at Alstom, pleaded guilty on July 29, 2013, to one count of conspiracy to violate the FCPA and one count of violating the FCPA; and, David Rothschild, a former vice president of regional sales at Alstom Power Inc., pleaded guilty to conspiring to violate the FCPA on Nov. 2, 2012. Marubeni Corporation, Alstom’s consortium partner on the Tarahan project, pleaded guilty on March 19, 2014, to one count of conspiracy to violate the FCPA and seven counts of violating the FCPA, and was sentenced to pay a criminal fine of $88 million. FCPA and money laundering charges remain pending against Lawrence Hoskins, the former senior vice president for the Asia region for Alstom, and trial is scheduled for June 2, 2015.

“Three Alstom corporate executives and Marubeni, a major Japanese corporation, have now pleaded guilty to a seven-year scheme to pay bribes to Indonesian officials to secure a $118 million power contract,” said Assistant Attorney General Caldwell. “The Criminal Division of the Department of Justice will follow evidence of corruption wherever it leads, including into corporate boardrooms and corner offices. As this case demonstrates, we will hold both companies and their executives responsible for criminal conduct.”

According to the court filings, the defendants, together with others, paid bribes to officials in Indonesia, including a member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company in Indonesia, in exchange for assistance in securing a $118 million contract, known as the Tarahan project, to provide power-related services for the citizens of Indonesia from facilities in Tarahan. To conceal the bribes, the defendants retained two consultants purportedly to provide legitimate consulting services on behalf of Alstom and Marubeni in connection with the Tarahan project. In reality, the primary purpose for hiring the consultants was to use the consultants to pay bribes to Indonesian officials.

The first consultant retained by the defendants allegedly received hundreds of thousands of dollars in his Maryland bank account to be used to bribe the member of Parliament. The consultant then allegedly transferred the bribe money to a bank account in Indonesia for the benefit of the official. According to court documents, e-mails between Hoskins, Pomponi, Pierucci, Rothschild, and their co-conspirators discuss in detail the use of the first consultant to funnel bribes to the member of Parliament and the influence that the member of Parliament could exert over the Tarahan project.

However, in the fall of 2003, Hoskins, Pomponi, Pierucci and others determined that the first consultant was not effectively bribing key officials at PLN. One e-mail between Alstom employees described PLN officials’ “concern that if we have won the job, whether their rewards will still be satisfactory or this agent only give them pocket money and disappear.” In another e-mail, an employee at Alstom’s subsidiary in Indonesia sent an e-mail to Hoskins asserting that the first consultant “has no grip on the PLN Tender team at all” and “is more or less similar to [a] cashier which I feel we pay too much.”

As a result, the co-conspirators retained a second consultant to bribe PLN officials, according to the court documents. The co-conspirators deviated from Alstom’s usual practice of paying consultants on a pro-rata basis in order to make a much larger up-front payment to the second consultant so that the consultant could “get the right influence.” An employee at Alstom’s subsidiary in Indonesia sent an e-mail to Hoskins, Pomponi, Pierucci and others asking them to finalize the consultancy agreement with the front-loaded payments but stated that in the meantime the employee would give his word to a high-level official at PLN, according to the charges. The defendants and their co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the purpose of bribing the Indonesian officials.

An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

The case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad, with assistance from the Meriden, Connecticut, Resident Agency of the FBI. Significant assistance was provided by the Criminal Division’s Office of International Affairs, and the department has also received substantial assistance from its law enforcement counterparts in Indonesia, Switzerland and Singapore and greatly appreciates their cooperation. The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut.