Alcoa Unit to Plead Guilty to Bribery

WASHINGTON--Alcoa World Alumina, a joint venture controlled by Alcoa Inc. (AA), agreed to pay $384 million to the U.S. Justice Department and Securities and Exchange Commission to settle bribery allegations in connection with a contract with Bahrain's state-controlled aluminum smelter.

The company, a joint venture that's majority owned by the aluminum giant, as part of the settlement will admit to routing tens of millions of dollars in kickbacks to members of the Bahraini royal family who controlled the state company in order to maintain a supply agreement. The payments were routed through shell companies and a middleman, according to the Justice Department.

The company admitted to "involvement in a corrupt international underworld in which a middleman, secretly held offshore bank accounts, and shell companies were used to funnel bribes to government officials in order to secure business," the acting head of the Justice Department's Criminal Division, Mythili Raman, said in a news release. "The law does not permit companies to avoid responsibility for foreign corruption by outsourcing bribery to their agents."

Alcoa will pay the Justice Department and the SEC in chunks over the next four years. In a news release Thursday, the company said it had been planning for the charges.

"Alcoa welcomes the resolution of this legacy legal matter with the U.S. Government," the company said. Alcoa pointed out that there is "no allegation in the filings by the DOJ and there is no finding by the SEC that anyone at Alcoa Inc. knowingly engaged in the conduct at issue."

The agreements will mean a $288 million charge for Alcoa in the final quarter of 2013, the company said. Alumina Ltd. (AWC, AWC.AU), the Australian mining company that holds a minority stake in Alcoa World Alumina, is paying 15% of the costs related to the bribery probe, Alcoa said.

Alcoa World Alumina is expected to plead guilty Thursday morning in federal court in Pittsburgh to one count of violating the Foreign Corrupt Practices Act.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires