Alstom and its alleged "How to Bribe Guide"

One of the more alarming items to have been dug up by the Brazilian press as it investigated the price fixing scandal which pointed the finger Alstom's transport and power divisions, was a three-page document that apparently acted as in-house guide to the company's employees and third-party agents on "how to bribe". [Note for users: use Google Chrome with the Google-translate extension enable - that way the Portuguese article will automatically appear in English. Kind of helps! Sorry IE users - Bing translator is decidedly inferior].  One of Alstom's commercial team in Brazil, André Botto told one of the investigating judges that the commission rate (bribe rate) was 15%, with half going to the decision makers (politicians and senior executives of the purchaser) and half to the agent.

The internal document, which soon became known as the "how to bribe guide", was apparently was created in 1997 when another key Alstom character was in charge of corporate ethics.   Bruno Kaelin was the group's head of compliance (see para 16 in the WSJ article of 2008) immediately prior to Jean-Daniel Lainé, who I mentioned in the last Alstom entry. Mr Kaelin was in residence, as it were, when the "How to Bribe" document was initially circulated. Mr Kaelin was also a director of Alstom Network UK (or Alstom International Ltd) as it was then known, between January of 2001 and his group resignation in December 2005. In both the Swiss and the UK companies he was replaced upon resignation by Jean-Daniel Lainé as the new global head of Compliance and Ethics.

According to the Swiss Punishment Order, Alstom restructured its global network of third-party agents and the corporate structure via which they were remunerated (see clauses 2 and 3). It is important to understand that this is not some journalistic conjecture; it is a Swiss judicial finding, which is to say that it is verified information. Two companies were "founded to centralize the execution of compliance procedure and payments": Alstom Network Schweiz AG and Alstom Network UK Ltd. To be accurate, two existing Alstom group companies were re-named and their responsibilities amplified to make them respectively the payment hubs for power and transport. Whilst Kaelin left Alstom in 2005, it should be noted that Lainé was in charge of compliance for the power group (2003-05) prior to taking on the global role on Jan 1st 2006.

The "how to bribe guide" had five sections (see paragraph 2 here) that covered the basic objective (practical guide to paying third-party commissions, the need to keep the information from being discovered, to keep it off the tax-books, to ensure that the work undertaken was "consulting and support" and to have the papers signed by the contracted company's CFO.

Times of India Sept 2014

So how did this document come to light, and how did the Brazilian press get hold of it? It was part of a package of information sent by the Swiss prosecutors to the Brazilian authorities (and hence on the front pages of the local Press.  Having initially thrown a mild tantrum when their evidence turned up in the press, the Swiss authorities eventually sent the relevant bank account proof on various of the "commissions" paid for Brazilian power and transport contracts.

Indian press reports that extradition orders had been sent by the UK authorities to Switzerland for Bruno Kaelin and France for Graham Hill: both are thought to be in poor health, and I note that Mr Kaelin's name has been dropped from the SFO's suit.

Whilst the SFO's case against Alstom Transport UK focussed on issues in Poland, Tunisia, India and Hungary, the implication of the Swiss sentencing ties the company to all of the Brazilian transport corruption cases.