Light rail company has bribery background – Daily Telegraph

Light rail company has bribery background – Daily Telegraph

  • Alstom won contract for light rail network last October
  • Two months later, French company was fined $800m
  • FBI found evidence of ‘widespread bribery’ in deals around the world

The French company manufacturing and operating the trams for Sydney’s controversial $2 billion eastern suburbs light rail project has been at the centre of corruption charges in the UK and US and was fined $800 million last December after an FBI investigation into bribery.

Alstom, a power and transportation company, was part of the consortia which won the contract

to build Sydney’s eastern suburbs light rail network in October last year and also won the right to operate the inner west light rail service.

But just before Christmas last year, two months after the light rail tender was awarded, the company was revealed by the FBI as having been involved in a widespread bribery scheme involving tens of millions of dollars in bribes in countries around the world.

An FBI press release from December 22 says: “Alstom S.A., a French power and transportation company, pleaded guilty today and agreed to pay a $772,290,000 fine to resolve charges related to a widespread scheme involving tens of millions of dollars in bribes in countries around the world, including Indonesia, Saudi Arabia, Egypt and the Bahamas.”

An artist’s impression of a vacant George Street during the light rail construction. Picture: NSW State Government

The FBI revealed that in total, “Alstom paid more than $75 million to secure $4 billion in projects around the world, with a profit to the company of approximately $300 million.”

Initially yesterday, the state government pointed out that Alstom Transport had not been involved in the US matter and all those allegations related to the Power arm of the company.

But Alstom Transport officials have also been charged in the UK relation to corruption in relation to alleged bribery in India and Hungary.

“We can assure taxpayers and other parties that a thorough assessment was conducted into the fairness and probity of the entire tender process”

The public was never told of the scandals around the company at the time it was part of the consortia to build the eastern suburbs light rail.

INVESTIGATION

Alstom is responsible for the design, delivery and commissioning of 30 trams on the new tram line including power supply equipment.

Transport Minister Andrew Constance’s office referred the matter to Transport for NSW for comment yesterday.

A spokesman for Transport for NSW said: “We can assure taxpayers and other parties that a thorough assessment was conducted into the fairness and probity of the entire tender process.”

“[The] US court action did not involve Alstom Transport, which is supplying light rail vehicles as part of the ALTRAC consortium that won the Sydney Light Rail PPP.

“The tender process for the Sydney Light Rail PPP was conducted according to the strict procurement and probity guidelines, in place in NSW to ensure the integrity of major contracts such as the one signed with ALTRAC to design, build and operate the Sydney Light Rail network.

“This included independent probity advisers who oversaw the evaluation of all bids.”

A spokesman for Alstom Australia said: “Alstom is committed to the highest ethics and compliance standards.

“Alstom reached an agreement with the US Department of Justice (DOJ) in 2014 to resolve the investigation into alleged violations of the US Foreign Corrupt Practices Act (FCPA).

“This resolution with the DOJ allows Alstom to put this issue behind us and to continue our efforts to ensure that business is conducted in a responsible way, consistent with the highest ethical standards.

Aware of the matter: NSW Transport Minister Andrew Constance. Picture: Brett Costello

In July last year, the Serious Fraud Office in the UK charged Alstom Network UK Ltd, and British nationals Graham Hill and Robert Hallett with corruption in India, Poland and Tunisia.

Mr Hallett is a former managing director of Alstom Transport India.

Hallett and Hill are defending the charges.

The FBI said in its December 22 statement: “According to the companies’ admissions, Alstom … through various executives and employees, paid bribes to government officials and falsified books and records in connection with power, grid and transportation projects for state-owned entities around the world, including in Indonesia, Egypt, Saudi Arabia, the Bahamas and Taiwan. In Indonesia, for example, Alstom, Alstom Prom, and Alstom Power paid bribes to government officials — including a high-ranking member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara, the state-owned electricity company in Indonesia.

“Alstom and its subsidiaries also attempted to conceal the bribery scheme by retaining consultants purportedly to provide consulting services on behalf of the companies, but who actually served as conduits for corrupt payments to the government officials.

“Internal Alstom documents refer to some of the consultants in code, including “Mr. Geneva,” “Mr. Paris,” “London,” “Quiet Man” and “Old Friend.””

In May this year, news broke that Alstom was facing another criminal trial in the UK over bribery offences involving train contracts in Hungary.

Many of the offences occurred prior to 2007.

 

UPDATE: 

3. Former Alstom Executive Sentenced for FCPA Conviction. On September 25, 2017, District of Connecticut Judge Janet Bond Arterton sentenced former Alstom executive Frederic Pierucci to 30 months’ imprisonment following his July 2013 guilty plea to one count of violating the FCPA and one count of conspiracy to violate the FCPA in connection with a scheme to bribe Indonesian officials to secure a lucrative power generation contract. Charges against Pierucci were originally unsealed in April 2013 after Pierucci, a French national, was arrested upon his arrival at JFK International Airport in New York.


 

Cancel the light rail project call Premier Gladys Berejiklian 02 8574 5000

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