Fri January 10, 2014
Alcoa To Pay $384 Million Penalty For Bahrain Bribes
Originally published on Fri January 10, 2014 11:45 am
STEVE INSKEEP, HOST:
And let's keep talking about international trade here. The American aluminum giant Alcoa and one of its subsidiaries will pay $384 million in fines to the United States government for engaging in corrupt practices overseas.
The payment is part of a settlement in a bribery case involving the royal family of Bahrain.
NPR's John Ydstie reports.
JOHN YDSTIE, BYLINE: Alcoa World Alumina, joined 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 insure the company's right to supply alumina, a raw material used to make aluminum, to a state-owned company in Bahrain.
The companies made separate settlements with the U.S. Justice Department and the Securities and Exchange Commission. The charges came under the Foreign Corrupt Practices Act which prohibits the bribery of foreign officials.
Alcoa CEO, Klaus Kleinfeld, told CNBC he welcomed the resolution of the matter.
KLAUS KLEINFELD: We have been able to negotiate it in such a way that it puts less on financial stress on the company, it's getting paid over four years. So that's good.
YDSTIE: Kleinfeld called the situation a legacy legal issue which the company can now put behind it. The bribes were paid as far back as 1989 and Alcoa has already settled another legal suit involving the corrupt activity.
Alcoa shares slipped following news of the settlement and an earnings report that was slightly below Wall Street's expectations.
John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.