Alstom Indonesia power project bribery
Risk Mechanism
Consultancy contracts were used as vehicles to channel bribes to Indonesian officials and senior decision-makers at the state-owned utility PLN to secure power-project contracts.
Case Summary
Alstom admitted that it and its subsidiaries paid bribes in Indonesia to secure power-sector contracts valued at approximately USD 375 million, including payments to a member of Parliament and senior officials at the state-owned utility PLN. The scheme was concealed through consultancy arrangements and resulted in guilty pleas, executive prison sentences, and a USD 772 million criminal penalty.
Risk Lesson
This case reveals how consultancy arrangements can be used to conceal bribery and route improper payments to politically connected officials and senior decision-makers in state-linked infrastructure procurement. It also highlights warning signs such as poorly justified consultant roles, opaque advisory contracts, weak scrutiny of intermediary payments, and procurement decisions vulnerable to political influence within state-owned utilities.
Reference
U.S. Department of Justice. (2014). Alstom pleads guilty and agrees to pay $772 million criminal penalty to resolve foreign bribery charges. Available from: https://www.justice.gov/archives/opa/pr/alstom-pleads-guilty-and-agrees-pay-772-million-criminal-penalty-resolve-foreign-bribery