Bahrain’s state-owned aluminum producer urged a U.S. judge not to dismiss its racketeering lawsuit claiming it overpaid for raw materials because of bribes directed by Alcoa Inc. (AA), the largest U.S. aluminum producer.
Aluminium Bahrain BSC, known as Alba, claims that New York- based Alcoa bribed senior officials in Bahrain and caused Alba to pay almost $500 million more than it should have for alumina, the principal raw material in aluminum. Alcoa has asked a judge to dismiss the case, arguing that the alleged conduct took place outside the U.S. and shouldn’t be litigated in federal court.
Alba countered that Alcoa and other defendants used offshore shell companies to “perpetrate and conceal a massive, home-cooked bribery scheme conceived, orchestrated, and directed in and from the United States,” according to its filing today in federal court in Pittsburgh.
Claims of domestic leadership of the fraudulent scheme are “amply supported by Alba’s detailed, specific, and documented allegations of actions in furtherance of the scheme by senior domestic executives,” according to the filing.
Alcoa argued in court papers on Jan. 27 that U.S. District Judge Donetta Ambrose should dismiss the complaint because federal law doesn’t apply to “allegations of essentially foreign enterprises and foreign acts of bribery.”
U.S. Investigation
Ambrose had administratively closed the case in March 2008, a month after Alba filed it, when the U.S. Justice Department said it was investigating whether Alcoa made corrupt payments in Bahrain. The judge agreed in November to Alcoa’s request to reopen the case so that the company could file a dismissal motion asserting that racketeering law “does not apply to the extraterritorial conduct” claimed by Alba.
Lori Lecker, an Alcoa spokeswoman, said in an e-mail today that “Alba’s allegations remain unsupported by law or by fact.”
The new filing was Alba’s “third opportunity to articulate its claims since we moved to reopen this case, yet Alba’s brief does nothing more than repackage legally insufficient allegations in an attempt to survive the motion to dismiss.”
One defendant is British investor Victor Dahdaleh, who was charged Oct. 24 in the U.K. with six counts of making corrupt payments, two counts of money laundering and one charge of conspiracy to corrupt. He is accused of paying bribes to Alba officials to win contracts for Alcoa.
A former Alba executive, Bruce Allan Hall, was charged Feb. 15 by U.K. prosecutors with corruption and money laundering. Hall was extradited from Australia to London to face the charges.
The case is Aluminium Bahrain BSC (ALBH) v. Alcoa Inc., 08- cv-00299, U.S. District Court, Western District of Pennsylvania (Pittsburgh).
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