Justice Dept. opens Alcoa bribery probe

ByABC News
March 23, 2008, 12:08 PM

PITTSBURGH -- The U.S. Justice Department asked a judge to halt a federal civil lawsuit against the Pittsburgh-based company that accused Alcoa of bribing the officials through secretive shell companies in Asia and Europe.

Aluminum Bahrain B.S.C., controlled by the Bahrain government and known as Alba, is seeking more than $1 billion in damages from Alcoa and other affiliated defendants, according to the lawsuit filed last month.

Alba operates one of the world's largest aluminum smelters. It has been an Alcoa customer for about three decades and buys most of its alumina a material used to make aluminum from the company.

The Bahrain firm's allegations "could be relevant to the government's criminal investigation and a potential criminal trial," if they are shown to be true, prosecutors said in documents filed Thursday in U.S. District Court.

The lawsuit alleges that Alcoa and its affiliates violated mail and wire fraud laws and the Foreign Corrupt Practices Act, among other statutes.

The two companies agreed to the government's request to temporarily halt the civil proceedings, according to court documents.

"We obviously are going to cooperate fully," Alcoa spokesman Kevin Lowery said. "We see this as an opportunity to see a speedy resolution to the entire matter."

A Justice Department spokeswoman declined to comment.

Also named in Alba's lawsuit are Alcoa World Alumina a joint venture between Alcoa and Australia's Alumina William Rice, an Alcoa World Alumina executive, and Victor Dahdaleh, a Canadian who has acted as an agent for Alcoa and Alcoa World Alumina.

Alba contacted Alcoa about the bribery allegations shortly before filing its lawsuit on Feb. 27, giving the Pittsburgh-based company two weeks to investigate and settle the matter, Lowery said earlier.