United States v. Alcoa World Alumina (W.D. Pa. 2014)

• Case Name
• United States v. Alcoa World Alumina (W.D. Pa. 2014)

• Date Filed
• 01/09/2014

• Enforcement Agency
• DOJ

• Countries
• Bahrain

• Foreign Official
• Officials and board members of Aluminum Bahrain B.S.C. (“Alba”), whose majority shareholder is the Kingdom of Bahrain and a senior Bahraini government official.

• Date of Conduct
• 1989 to 2009

• Nature of Business
• Alcoa World Alumina (“AWA”) is a Delaware limited liability company with its principal place of business in Pittsburgh, Pennsylvania.  AWA owns and operates bauxite mining and aluminum refining facilities in North America, South America, Africa, and the Caribbean.  AWA is a subsidiary of the Pennsylvania-based aluminum producer, Alcoa Inc. (“Alcoa”).

• Influence to be Obtained
• As stated in an agreed upon statement of facts, AWA assumed direct oversight of Alcoa’s long-term alumina supply contract negotiations with Alba and Bahraini government officials in 2000.  In 2001, AWA retained a pair of shell companies (“Alumet” and “AAAC”) and caused those shell companies to enter into an agreement with Alcoa’s Australian subsidiary (“Alcoa of Australia”) to make Alumet and AAAC the direct distributors of alumina from Alcoa of Australia to Alba.  The shell companies were controlled by an unnamed consultant who helped manage Alcoa’s relationship with Alba. 
  
  In 2002, Alcoa of Australia agreed to supply Alumet and AAAC one million tons of alumina for resale to Alba.  At that time, Alcoa of Australia would cease to invoice Alba directly for the sale of Alumina and instead would invoice Alumet and AAAC, who in turn would receive payment from Alba.  According to the DOJ, an unnamed executive at AWA knew that Alcoa of Australia would continue to ship alumina directly to Alba and crafted the new structure to allow Alumet and AAAC to mark-up sales of alumina to Alba from Alcoa of Australia.  To ensure the success of the arrangement, from 2002 through 2004, the unnamed consultant used the mark-up of the sales to Alba to enrich himself and pay bribes to multiple Bahraini officials.  Later, as Alcoa and Alba engaged in negotiations over a potential joint venture project and as Alba entered into a second supply agreement with Alumet and AAAC, additional bribes were made to Bahraini officials until 2009.

• Enforcement
• Shortly after Alba filed a civil suit against Alcoa in U.S. federal court in 2008, the DOJ and SEC initiated a probe into AWA’s activities in Bahrain.  Approximately six years later, on January 9, 2014, the DOJ announced that it had reached a plea agreement to settle the charges against AWA.  In the filing, AWA agreed to plead guilty to violating the FCPA and to pay $223 million in criminal penalties.

• Amount of the Value
• Not Stated

• Amount of Business Related to Payment
• Not Stated

• Intermediary
• Sales Agent; Consultant.

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 223,000,000

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 384,000,000

• Related Enforcement Actions
• In the Matter of Alcoa Inc. (2014)
  

Alcoa World Alumina 

• Citation
• United States v. Alcoa World Alumina, No. 2:14-cr-00007 (W.D. Pa. 2014).

• Date Filed
• 01/09/2014

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery

• Other Statutory Provision
• None

• Disposition
• Plea Agreement

• Defendant Jurisdictional Basis
• Domestic Concern

• Defendant's Citizenship
• United States