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GE Power Sweden debarred for six years after SFO’s Alstom bribery probe

29 November 2019 | By GCR Staff | 0 Comments

The European Bank for Reconstruction and Development (EBRD) has debarred GE Power Sweden AB (formerly Alstom Power Sweden AB) from bidding for any projects it funds for six years after an investigation revealed that executives from two Alstom companies paid Lithuanian government officials bribes of more than €5m to win projects at a power plant there.

The debarrment, the longest in the bank’s history, followed an eight-year investigation launched in 2009 by the UK’s Serious Fraud Office (SFO) into the Alstom Group, which last year resulted in three former Alstom executives going to prison for between two-and-a-half and four-and-a-half years for their roles in the Lithuanian case. 

The culture of corruption evident within the Alstom Group was widespread. Their illicit activities to win lucrative contracts were calculated and sustained– Lisa Osofsky, Serious Fraud Office

The men employed by Alstom Power Ltd and Alstom Power Sweden AB were found to have won two contracts worth €240m by paying plant and government officials bribes of more than €5m, and falsifying records to avoid checks in place to prevent bribery.

GE acquired Alstom’s power and grid businesses in November 2015.

Handing down the third and final sentence at Blackfriars Crown Court, London in December last year, the judge called it “sophisticated corruption” carried out “over many years”.

“This was a very serious example of the bribery and corruption that beleaguers the civilised commercial world and is a cancer upon it,” said judge Martin Beddoe. “Even if you do not create the disease but help it spread, you bear a very heavy responsibility, and the more senior your position, the more serious it obviously is.”

Alstom Power Ltd, the company, pleaded guilty in 2016 to a count of conspiracy to corrupt, and was made to pay more than £10.9m in compensation to the Lithuanian government and a fine of £6.375m.

SFO director Lisa Osofsky said: “The culture of corruption evident within the Alstom Group was widespread. Their illicit activities to win lucrative contracts were calculated and sustained, undermining legitimate business and public trust.” The SFO’s investigation involved cooperation with more than 30 countries.

The EBRD said its investigation related to a project to install flue gas desulphurisation (FGD) units at the Lithuanian Power Plant, a project it financed.  

The investigation found that, from as early as 2002, representatives of Alstom Power Sweden AB, GE Power Sweden’s predecessor, conspired with another Alstom entity to manipulate the technical specifications for the FGD contract in their favour by making payments to Lithuanian government officials.

The EBRD’s debarrment of GE Power Sweden could be extended to the World Bank and other multilateral development banks.

Meanwhile, in another case linked to the SFO’s investigation of Alstom, Alstom Network UK Ltd was this week ordered to pay a total of £16.4m for conspiracy to corrupt relating to a contract to supply trams in Tunisia.

The company was convicted in April 2018 of conspiracy to corrupt, having paid an intermediary called Construction et Gestion Nevco Inc. (Nevco) €2.4m to secure a €79.9m contract with Transtu, the company responsible for running the Tunis Metro.

To satisfy internal compliance checks and make its agreement with Nevco appear a legitimate contract for services, Alstom helped to produce paperwork as “evidence” of services rendered when, in reality, Nevco was simply a conduit for bribes, the SFO said.

Image: ©GCR, illustration by Denis Carrier