Alcoa says bribery charges fail to meet legal standards
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Say a Canadian bribed Bahrainians to buy overpriced aluminum from Australians. Can a U.S. court hold Americans responsible?
No, it can't, Alcoa argued in a legal filing Friday, seeking dismissal of a lawsuit that conceivably could cost it more than $1 billion. The North Shore-based company has waited nearly four years to make its argument, since Aluminium Bahrain BSC, called Alba, filed a complaint blaming Alcoa for a series of intercontinental transactions that were allegedly greased by bribes.
"We have moved to dismiss this case in its entirety because Alba's claims are not supported by law or by fact," an Alcoa spokeswoman said in a statement. "Alba mischaracterizes any number of normal business transactions through overdrawn inferences and innuendo, and those mischaracterizations fail to meet the legal threshold for Alba's claims."
Alba's claims have spurred a Department of Justice Fraud Section probe that delayed the lawsuit's progress for more than four years. Alcoa reiterated Friday that it is cooperating with federal investigators. The Justice Department declined comment.
Alba detailed its charges in a Dec. 28 court filing. It said that Alcoa pushed Alba to start buying the raw material alumina mined by an Alcoa subsidiary in Australia, but through companies set up by Canadian businessman Victor Dahdaleh.
Mr. Dahdaleh, Alba said, got $13.5 million in unearned commissions from Alcoa. Those were used by Mr. Dahdaleh to pay some $11.6 million in bribes, almost all to Bruce Hall, a former CEO of Alba. In return, Alba said, Mr. Hall and others steered Alba into contracts that had it paying around $400 million more for alumina than market prices would have dictated.
Alba "has the utmost confidence in the case that we have submitted," said Charles Gibbons, an attorney with Buchanan Ingersoll & Rooney, who represents the Bahraini company.
Mr. Dahdaleh and Mr. Hall face fraud charges in London. No Alcoa officials have been charged.
Alba has argued that the arrangement constituted a racketeering influenced corrupt organization, with Alcoa as the puppet master. U.S. RICO laws allow for both criminal prosecutions and civil lawsuits. A civil RICO verdict can bring awards of triple the damages suffered.
Alcoa on Friday cited court decisions saying that RICO doesn't apply when the deeds alleged were entirely overseas, by non-American people and businesses.
Alba can now file a response to Alcoa's motion to dismiss, and U.S. District Judge Donetta W. Ambrose would decide whether the case can proceed.
First Published January 30, 2012 12:00 am
