French firm Alstom in Brazil corruption probe

French power company Alstom paid millions of dollars in bribes to secure lucrative contracts in Sao Paulo state in 1998, a Brazilian newspaper reported Thursday. The Estado de Sao Paulo cited federal police documents as saying Alstom executives were among 10 people facing charges in connection with the scandal. Two ex-state secretaries, two heads of the state energy firm EPTE also faced prosecution, according to the report. Alstom did not comment directly on the specific allegations but insisted the firm continued to "follow a rigid code" of ethics. The report comes five years after Brazilian federal prosecutors and authorities in France and Switzerland investigated Alstom for alleged payments of bribes to win contracts for metro equipment between 1995 and 2003. Press reports at the time said Alstom paid $6.8 million to win a $45 million contract for extending the Sao Paulo metro. According to the federal police documents, Swiss authorities seized 7.5 million euros in alleged bribe money from a joint account in the name of Jorge Fagali Neto and Jose Geraldo Villas Boas, two officials linked to the Sao Paulo state government and the Brazilian Social Democratic Party (PSDB). Estado said the bribe money was paid through offshore companies based in Uruguay and one in Brazil. The money was then laundered through accounts in Switzerland, Luxembourg, New York and Lichtenstein. Estado said Fagali was specifically charged with money laundering, tax evasion and racketeering while Alstom officials were charged with active corruption, money laundering, tax evasion and racketeering. Federal Deputy Duarte Nogueira, a senior PSDB member, flatly denied that the party, in power in Sao Paulo state at the time as well as now, received payoffs for public contracts, according to Estado. The daily said the Alstom case had the same ingredients as those in a railway price-fixing cartel in Sao Paulo and Brasilia, recently brought to light by German engineering giant Siemens. Local media said that in a deal with Brazilian authorities to avoid criminal proceedings, Siemens voluntarily gave details of the price-fixing cartel. Siemens, Spain's CAF, Japan's Mitsui, Bombardier of Canada and Alstom were allegedly involved in rigging prices for construction and maintenance of metro trains in Sao Paulo and Brasilia. Sao Paulo state Governor Geraldo Alckmin and his predecessor Jose Serra, both PSDB members, have been linked to the Siemens case but have denied any wrongdoing.