Altice Employees Raised Red Flags Years Before Corruption Probe

Billionaire Patrick Drahi said he was shocked and disappointed when he learned last summer that a handful of business associates, including his right-hand man, had been arrested as part of an expanding corruption probe that threatens to unravel his Altice telecommunications empire.

Even so, staff, unions and outside consultants had voiced concerns for years about the company’s relationships with some of its biggest vendors, according to more than a dozen people, including current and former employees, as well as meeting transcripts, correspondence and an audit report reviewed by Bloomberg. Altice executives at the highest levels were informed of loose governance, potentially rigged bidding on contracts and alleged nepotism linked to Armando Pereira, according to the documents and the people, many of whom asked to remain anonymous to discuss private information.

Pereira, who co-founded Altice with Drahi in 2002, is at the heart of the three-year long Portuguese investigation that was made public last July, and its fallout has spurred internal investigations throughout the company, touching executives around the world. So far, four people have been arrested and about 15 employees have been suspended by the company as a result of the probe, which centers on alleged efforts to rig the group’s local procurement process. Pereira has been accused by prosecutors of laundering money, accepting kickbacks and committing tax fraud, and is currently under house arrest. His lawyers have said he’s the victim of a trial by the media which has found him “guilty in public opinion” and that the “reality is not so simple,” according to a statement issued in July. They declined to give further comment for this story.