Swiss probe CHF 500m payments in Alstom case

30 October 2008

BELLINZONA – Swiss prosecutors are investigating suspicious payments totalling more than CHF 500 million as part of a corruption and money laundering probe linked to the French engineering company Alstom SA, according to court documents released Tuesday.

Prosecutors allege that Alstom funnelled bribes worth CHF 70 million a year through its Swiss subsidiary, hiding the payments as "consultancy fees" – a claim the company denies.

The figures were disclosed in a ruling Tuesday by the Federal Criminal Court, which ordered prosecutors to share copies of the documents it seized from Alstom earlier this year with the company.

The court backed Alstom in its bid to obtain the documents, arguing that they were necessary for it to continue its business operations.

The court also said it had seen insufficient evidence to support the prosecutors’ assertion that all of the payments made by Alstom’s subsidiary were bribery-related.

A spokesman for Alstom in Paris, Philippe Kasse, said the bribery claims consisted of "already reported allegations for which there is no proof."

Swiss police searched premises linked to Alstom in August and arrested one individual, who is suspected of corruption and money laundering. The raids across Switzerland included offices belonging to subsidiary Alstom Prom AG in Baden, about 20 kilometres west of Zurich.

The arrested individual was a former compliance manager of the Alstom Group, who also was a member of the management of Alstom Prom. Authorities declined to identify the manager. He was released on 10 October because prosecutors said there was no danger he would suppress evidence in the case.

Prosecutors suspect that Alstom used Alstom Prom to make payments to foreign officials in order to win international contracts for the French group.

The transactions under investigation go back to the year 2000 and were recorded as "consultancy fees" worth more than CHF 500 million, according to the documents.

Prosecutors said they regard a large share of these transactions as suspicious because numerous consultants did not provide any services for Alstom. Instead, their bank accounts were used to transfer payments to third parties.

Prosecutors said that in some cases there was proof that money was paid to foreign officials, including for projects in Italy, Zambia and Mexico.

They allege that between January 2001 and April 2003, bribes of around EUR 1 million (CHF 1.48 million) were sent via different offshore companies to an official in Zambia.

Prosecutors also said two Swiss companies had billed Alstom for more than CHF 10 million and EUR 300,000 respectively. The sums were allegedly used to pay cash bribes.

Alstom, a maker of high-speed trains and power stations, was saved from bankruptcy in 2004 when French President Nicolas Sarkozy, who was finance minister then, organised a state bailout for the ailing firm.

A related French inquiry was opened in November 2007, following a tip received by Swiss authorities.

[AP / Expatica]