Lafarge, a French cement company, has pleaded guilty to paying millions of dollars to an Islamic State group in a bid to keep a plant operational in Syria — at a time when the group was torturing Westerners that were kidnapped — and agreed to pay approximately $778 million in penalties.
Lafarge was accused by the Justice Department of turning a blind eye to the conduct of the Islamic State, discussing a revenue-sharing agreement with the militant group as it was encroaching on new territory and as Syria was smeared in a brutal civil war. Lafarge’s actions, already investigated by French law enforcement authorities, happened before it formed a merger with a Swiss company, Holcim, to form the world’s biggest cement maker.
Officials of the Justice Department described it as the first case in which a company has pleaded guilty to conspiring to offer material support to a foreign terrorist organization. Lafarge and a long-extinct Syrian subsidiary entered the plea in federal court in Brooklyn, agreeing to criminal fines of $90.78 million and a forfeiture of $687 million.
Assistant Attorney General Matthew Olsen, the Justice Department’s top national security official said: “There is no justification – none – for a multi-national corporation authorizing payments to a designated terrorist group. Such payments are egregious violations of our laws, justify maximum scrutiny by U.S. authorities, and warrant severe punishment.”
Prosecutors said Lafarge paid through intermediaries nearly $6 million to IS and al-Nusrah Front, another militant group, in 2013 and 2014. The fixed monthly payments did not happen because of the company’s ideological alignment with the groups, the Justice Department said, but were made purely to pursue an economic advantage.
Lafarge had established a $680 million plant in northern Syria in 2011, and encountering competition from cheaper cement imported from Turkey, regarded the payments to IS as a means of ensuring the continued operations of the plant and safeguarding its employees and the transport of raw materials into the plant.
The Justice Department accused the company of using fake contracts and doctored invoices to mask the partnerships, and of committing to a revenue-sharing agreement with IS in the hopes that it would incentivize the group to safeguard the interests of the company.
In a message, one executive of the company told colleagues that “we have to maintain the principle that we are ready to share the ‘cake,’ if there is a cake.’”
After the plant was evacuated by Lafarge in September 2014, IS possessed the cement that the company had produced and offered it for sale at prices that would have fetched the group about $3.21 million, prosecutors say.
The payments were made at a time when other companies were shutting down operations in the region and at a time when beheading videos released made clear to the world the barbaric actions of the Islamic State.
For instance, charging documents quote an August 20, 2014, email exchange where officials of the company describe their negotiations with IS, with one official talking about the need to check with a company lawyer about “the consequences of this kind of deal.” A day earlier, IS had posted a grisly video of the killing of freelance American journalist James Foley.
Deputy Attorney General Lisa Monaco said: “Make no mistake: Lafarge and its leadership had every reason to know exactly with whom they were dealing — and they didn’t flinch. Instead, Lafarge forged ahead, working with ISIS to keep operations open, undercut competitors, and maximize revenue. And all the while, through their support and funding, Lafarge enabled the operations of a brutal terrorist organization.”
The allegations involve an act that was earlier investigated by the French. Previously, Lafarge had acknowledged channelling money to Syrian armed organizations between 2013 and 2014 to ensure safe passage for employees and supply its plant.
In 2014, the company struck out preliminary charges which included financing a terrorist enterprise and complicity in crimes against humanity.
Later, a French court quashed the charges which involves crimes against humanity but disclosed other charges would be considered over payments made to armed forces in Syria.
A Supreme court in France later overturned the ruling, leading another French court to state earlier this year that Lafarge must face charges of complicity in crimes against humanity.
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