Bloomberg News

Alcoa Accused of Bribing Alba Officials in Aluminum Scheme

December 30, 2011

(Adds Alcoa October filing in 10th paragraph.)

Dec. 29 (Bloomberg) -- Alcoa Inc. was accused of using a middleman to bribe officials at Bahrain’s state-owned aluminum producer to reap more than $400 million in illegal profit, according to new claims filed in a racketeering lawsuit.

Alcoa, the largest U.S. aluminum producer, made tens of millions of dollars in illegal payments through an intermediary to an official at Aluminium Bahrain BSC, known as Alba, and the government of Bahrain, according to court papers filed yesterday in federal court in Pittsburgh. The company also paid more than $5 million in bribes to former Alba Chief Executive Officer Bruce Hall, according to the filing.

Alba sued Alcoa in February 2008 claiming the New York- based company caused it to pay inflated prices for alumina, the principal raw material in aluminum. The case was closed after the U.S. Justice Department said it was investigating whether Alcoa made corrupt payments in Bahrain. It was reopened in November after a judge ruled that Alba could file an amended complaint and a statement laying out its racketeering case.

Mike Belwood, a spokesman for Alcoa, said the claims in Alba’s case are “not supported by the facts.”

‘Another Recitation’

“Nothing in the statement filed yesterday changes our view,” Belwood said in a phone interview. “Alba’s statement is yet another recitation of the alleged misdeed of Victor Dahdaleh and Bahraini officials in an attempt to try and construct a claim and survive Alcoa’s upcoming motion to dismiss.”

Alcoa asked to reopen the case in November and sought permission to file a motion seeking its dismissal because racketeering law “does not apply to the extraterritorial conduct,” alleged by Alba, according to court papers.

Dahdaleh, a British and Canadian national who lives in London, was charged in October by the U.K.’s Serious Fraud Office with paying bribes to officials of a smelting company in Bahrain to win contracts for Alcoa to supply alumina. Dahdaleh denies wrongdoing, according to his law firm, Allen & Overy LLP.

Hall couldn’t immediately be reached for comment on the filing.

Dahdaleh allegedly received the payments from Alcoa and transferred those in the form of bribes to induce former officers of Alba and the Bahrain government to ensure Alcoa retained the business, according to the court filing. The payments also pressured those officials to provide competing bid information to Dahdaleh. Dahdaleh funneled the bribes through numerous shell companies, according to the filing.

Alcoa said in an October court filing that it has cooperated over the past three years in the Justice Department probe and a related investigation by the U.S. Securities and Exchange Commission.

The case is Aluminium Bahrain BSC v. Alcoa Inc., 08- cv-00299, U.S. District Court, Western District of Pennsylvania (Pittsburgh).

--Editors: Peter Blumberg, Michael Hytha

To contact the reporter on this story: Sophia Pearson in Philadelphia at

To contact the editor responsible for this story: Michael Hytha at -0- Dec/29/2011 22:42 GMT

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