Judge Allows Racketeering Lawsuit against Alcoa to Move Forward

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Written By admin at Tuesday, June 12th, 2012

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A federal judge in Pittsburgh cleared a path to trial for a long-running civil racketeering lawsuit accusing aluminum maker Alcoa of paying bribes in Bahrain to win business with its state-owned aluminum company.

U.S. District Judge Donneta Ambrose rejected Alcoa’s claims that the lawsuit amounted to a foreign dispute beyond the scope of the civil racketeering law, the Racketeer Influenced and Corrupt Organizations Act.

The state-owned company, Aluminum Bahrain, filed the lawsuit in 2008 in Pittsburgh federal court. The lawsuit alleges Alcoa paid tens of millions of dollars in bribes, through a crooked agent, to officials at Aluminum Bahrain, also known as Alba.

In return, Alcoa won inflated contracts, reaping more than $ 400 million in illegal profits, according to the lawsuit. Alba is seeking more than $ 1 billion in damages.

In court documents, Alba’s lawyers said the scheme was orchestrated by Alcoa executives in Pittsburgh, where the company is based. Alcoa has denied wrongdoing, and a spokeswoman said the company would continue to fight the lawsuit.

While Judge Ambrose acknowledged that RICO couldn’t be applied to foreign enterprises, she said she was satisfied that the Alba allegations tied the scheme firmly to the U.S.

“All of these decisions and directions were happening in Pittsburgh, Pennsylvania,” the judge wrote, in denying Alcoa’s motion to dismiss the lawsuit.

“A decision on a motion to dismiss is not a ruling on the merits of the case, and we look forward to presenting the facts related to Alba’s allegations and to vigorously defending our position as this litigation unfolds,” the Alcoa spokeswoman said.

The civil case, as we’ve detailed here, is proceeding alongside a criminal investigation of Alcoa over possible violations of the Foreign Corrupt Practices Act, which bars companies from paying bribes to foreign officials.


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