A logo sits on the external casing of an industrial power transformer at Alstom SA's factory in Stafford, U.K., on Tuesday, Jan. 15, 2013. Alstom surged 29 percent in Paris trading in 2012, beating the 15 percent gain of the the French benchmark CAC 40 Index. Photographer: Chris Ratcliffe/Bloomberg

Tom Schoenberg Washington

The US Justice Department is building a bribery case against Alstom, the French maker of trains and power equipment, that is likely to result in one of the largest US anti-corruption enforcement actions, according to two people with knowledge of the investigation.

Alstom, which has a history chequered with corruption allegations, has hindered the US investigation of possible bribery in Indonesia and now faces an expanded probe including power projects in China and India, according to court documents in a related case. Settlement talks had not begun, the company said.

Alstom set aside e39 million (R575m) by March last year to cover bribery probes and other legal matters.

That was likely to fall far short of what it would need to settle the US case, said Michael Volkov, a former federal prosecutor who estimated Alstom could face penalties rivalling Siemens’s $800m (R8.7bn) settlement with the US in 2008.

“The problem for this company is that there’s an absence of acknowledgment that they have a problem and without remediation and co-operation a big company is destined to get smashed,” Volkov said.

Robert Luskin, Alstom’s lawyer at Patton Boggs in Washington, said the company was now co-operating with prosecutors. “It’s impossible to say at this point what the parameters of the potential settlement might be, what projects it might encompass or how large it will be,” Luskin said. “Any effort to do that would just be speculation at this point.”

Alstom has been probed by multiple countries since 2004 when auditors for the Swiss Federal Banking Commission unearthed documents showing possible corrupt payments.

Since then, the company has paid more than $53m over claims its employees bribed officials in at least five countries. Alstom is being investigated by the UK and Brazil too.

The US probe centres on a $118m contract for boiler services at a power plant on the Indonesian island of Sumatra.

Alstom executives, together with Marubeni, a Japanese commodity trading company, used middlemen to funnel hundreds of thousands of dollars to a member of Indonesia’s parliament and officials at state-controlled power utility Perusahaan Listrik Negara, according to court papers filed by the Justice Department.

Of four former Alstom executives who have been charged, two have pleaded guilty and agreed to help prosecutors. Marubeni pleaded guilty to bribery violations on March 19 and said it would co-operate with investigators. – Bloomberg