Alcoa Inc (NYSE:AA) has reportedly agreed to pay $384 million to settle both civil and criminal charges which claim the company bribed Bahraini officials. CNN Money reports that the Securities and Exchange Commission said its investigation revealed that Alcoa had paid over $110 million to officials in Bahrain in order to influence negotiations about contracts between itself and a major aluminum plant which is operated by the government there.
Alcoa accused of bribery
The SEC said the bribes were handled through a consultant in London. That consultant was said to have ties to the royal family in Bahrain. Officials say the bribes are in violation of the U.S. Foreign Corrupt Practices Act. They also said the law doesn’t allow companies like Alcoa Inc (NYSE:AA) to avoid taking responsibility for foreign corruption by outsourcing bribes to consultants.
Alcoa World Alumina, a joint venture in mining between Alcoa and Alumina Limited, has also agreed to plead guilty to criminal charges of bribery. The joint venture will pay criminal fines of $209 million. That amount will be spread out over five payments over the next four years. The venture will also pay $14 million to the Justice Department, with Alcoa Inc (NYSE:AA) having to pay 85% of that fine. In addition, Alcoa World Alumina will have to pay $161 million in civil fines to the SEC under the terms of the settlement.
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Alcoa reports earnings today
Alcoa Inc (NYSE:AAPL) reports its earnings today, and it plans to take a $288 million charge against its earnings for the fourth quarter, which it is reporting today. The aluminum maker took an additional $103 million charge earlier in 2013 because it anticipated having to pay a fine in connection with the bribery charges.
Shares of Alcoa fell as much as 2% during the regular trading day today. Sentiment surrounding the company has been positive as investors are hoping for a better year this year than last year. Alcoa is expected to report 5 cents per share in earnings on $5.43 billion in revenue.