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Aluminium Bahrain, Alcoa Can Gather Bribe Data, U.S. Says

U.S. prosecutors dropped objections to the pretrial gathering of evidence in a lawsuit by Bahrain’s state-owned aluminum producer, which claims it overpaid for raw materials because of bribes directed by Alcoa Inc.

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.

U.S. prosecutors have been investigating those allegations since 2008 to determine whether Alcoa, the largest U.S. aluminum producer, or anyone else violated the U.S. Foreign Corrupt Practices Act. Prosecutors said yesterday in a court filing that U.S. District Judge Donetta Ambrose in Pittsburgh no longer needs to halt the pretrial collection of evidence, known as discovery.

“The government has been able to conduct its criminal investigation free from the distraction of parallel civil discovery,” a Justice Department attorney, Adam Safwat, said in court papers. “Commencement of civil discovery at this time will not so unduly interfere with its ongoing investigation as to warrant a continued stay of discovery.”

On June 11, Ambrose denied a request by Alcoa to dismiss the lawsuit. Alcoa argued that the alleged conduct took place outside the country and shouldn’t be litigated in the U.S.

The judge has scheduled a hearing on the case for June 25.

‘Home-Cooked’ Scheme

Alba claims in court papers 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 U.S.”

Alcoa has denied Alba’s claims.

In a hearing before Ambrose Nov. 2, Safwat said the probe has taken so long “because the conduct that we are investigating in this international corruption scheme spans the globe from the U.S. to Australia, to the Channel Islands in Europe and to Bahrain.”

Seeking witness statements and documents from different countries has slowed the process, and bank records are critical “because the scheme usually involves routing money through layers upon layers of bank records, and we have to go from one layer to the next,” Safwat said.

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

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