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French Cement Company to Pay $780 Million Over Payoffs to ISIS French Cement Company to Pay $780 Million Over Payoffs to ISIS
(about 2 hours later)
The Justice Department has reached a roughly $780 million criminal plea agreement with a French cement company that paid off the Islamic State terrorist group in order to continue operating in Syria in 2013 and 2014 — at a time when the group was abducting and murdering journalists and aid workers. The Justice Department has reached a $778 million criminal plea agreement with a French construction conglomerate that paid off the Islamic State to protect its Syria operations in 2013 and 2014, when the terrorist group murdered Americans during its reign of brutality in the region.
Executives with Lafarge, which is based in Paris, agreed to the deal after paying more than $5 million to Islamic State leaders and urging them to help the company keep its production facilities running, according to a company spokesman and law enforcement official. The company, Lafarge S.A., a subsidiary of the Switzerland-based Holcim Group with extensive operations in the United States, entered a guilty plea Tuesday in federal court in Brooklyn to a count of conspiring to provide material support to a foreign terrorist organization.
The agreement with Lafarge, a subsidiary of the Switzerland-based Holcim Group with expansive operations in the United States, is by far the largest penalty paid by a private company charged with providing material support to a terrorist organization. The company pleaded guilty in federal court in Brooklyn on Tuesday to a single count of conspiracy to provide material support to a foreign terrorist organization. The company also faces criminal charges in France, where it is the first corporation to be indicted on a charge of complicity with crimes against humanity. Four years ago, authorities in France charged Lafarge executives in connection with the company’s Syrian operations.
The company’s lawyers have argued in French courts that Lafarge’s efforts were not intended to assist the Islamic State but to ensure its operations continued. U.S. authorities on Tuesday detailed the extraordinary measures that company officials took to keep operations going at a cement plant in northern Syria, just south of the Turkish border, during the civil war that ravaged the region.
Justice Department officials had been quietly pursuing their own case against the company under a federal criminal law that prohibits people or businesses from harboring or collaborating with people they know to be terrorists. According to a statement of facts unsealed Tuesday, executives at Lafarge and its Syrian subsidiary worked with intermediaries based in Syria to pay “numerous armed factions,” including the Islamic State and the Nusra Front, that controlled the area around the cement plant. The payments included periodic “security payments” to the armed groups and the purchase of raw materials from Islamic State-controlled suppliers.
The chief executive of Lafarge appeared in federal court in Brooklyn Tuesday morning to enter the plea on the company’s behalf. The company eventually entered into what was effectively a revenue-sharing agreement with the Islamic State, structuring its payments to the group based on cement sales.
The company said in a statement that the conduct that set off the case has ended. In an email quoted by prosecutors, an unnamed senior executive with Lafarge compared the company’s agreement to sharing a “cake” with the Islamic State.
“None of the conduct involved Lafarge operations or employees in the United States and none of the executives who were involved in the conduct are with Lafarge or any affiliated entities today,” the company said, adding that it had “accepted responsibility for the actions of the individual executives involved, whose behavior was in flagrant violation of Lafarge’s Code of Conduct.” “To me, the ‘cake’ is anything that is a ‘profit,’” the executive wrote in a July 2014 email to other company staffers.
Lafarge, which was founded in the middle of the 19th century during the construction boom in Paris, frantically worked to keep its Syrian operations functioning even as Islamic State forces cut a swath of destruction through the region. The Islamic State permitted access to raw materials sourced from its territory, allowed Lafarge employees, suppliers and distributors to pass safely through checkpoints manned by the Islamic State and the Nusra Front.
While other multinational companies pulled out, Lafarge made a calculated decision to stay, pushing the limits of international law to keep going. The company’s actions, reconstructed by The New York Times in 2018 from sealed French court filings, documented the efforts of executives to take a series of actions — trade-offs and payments — that left one of the world’s biggest construction materials firm vulnerable to criminal and legal jeopardy in the United States and France. The plea materials on Tuesday included images of a vehicle pass from April 2014, issued by an Islamic State official in Aleppo Province to “the brothers at the checkpoints of the Qarah Qawzak Bridge,” asking that they “kindly allow the employees of Lafarge Cement Company to pass through after completing the necessary work and after paying their dues to us.”
The payoffs continued even as the Islamic State captured, tortured and killed hostages. Executives coordinated the payment of cash advances to the group as part of their “deal” to keep the plant running in August 2014, about a month after the Islamic State beheaded American journalist James M. Foley, emails obtained by the government showed.
The abduction, torture and murders of Americans, including Mr. Foley — and a growing sense that their suffering and courage is being forgotten as time elapses — was a powerful motivating factor in pursuing the case, according to law enforcement officials.
The company’s plea comes two months after the department achieved one of its most important goals of bringing Islamic State operatives to justice in an American courtroom. In August, El Shafee Elsheikh, a key member of the group, was sentenced to life in prison in a Virginia federal court for his role in the deaths of four Americans in Syria.
For years, Justice Department officials have been quietly pursuing a case against Lafarge under a federal criminal law that prohibits people or businesses from harboring or collaborating with people they know to be terrorists. The case was brought in New York because one of the payments was routed through an entity in the city.
Evidence in the case showed that Lafarge had extensive dealings with groups responsible for deaths of thousands of people.
From August 2013 through October 2014, Lafarge and its Syrian subsidiary paid the Nusra Front and the Islamic State about $5.92 million, consisting of monthly “donation” payments and payments to suppliers. Lafarge also paid about $1.1 million to third-party intermediaries.
Prosecutors also said the company concealed its payments, falsified records and backdated contracts to keep the scheme from becoming public.
“The defendants partnered with ISIS, one of the most brutal terrorist organizations the world has ever known, to enhance profits and increase market share, all while ISIS engaged in a notorious campaign of violence,” said Deputy Attorney General Lisa Monaco during a news conference in Brooklyn announcing the plea.
The chief executive of Lafarge, Magali Anderson, appeared in federal court Tuesday morning to enter the plea on the company’s behalf.
The company said in a statement that the conduct that set off the case had ended.
“None of the conduct involved Lafarge operations or employees in the United States and none of the executives who were involved in the conduct are with Lafarge or any affiliated entities today,” the company said, adding that it had “accepted responsibility for the actions of the individual executives involved, whose behavior was in flagrant violation of Lafarge’s code of conduct.”
Justice Department officials downplayed that justification, accusing Holcim’s leadership of failing to conduct appropriate “post-acquisition due diligence” to investigate Lafarge’s actions in Syria after it purchased the company, which has $12 billion in revenue, in 2015.
While other multinational companies pulled out of Syria after the start of civil war in 2011, Lafarge made a calculated decision to stay, pushing the limits of international law to keep going. The company’s actions, reconstructed by The New York Times in 2018 from sealed French court filings, documented the efforts of executives to take a series of actions — trade-offs and payments — that left one of the world’s biggest construction materials firms vulnerable to criminal and legal jeopardy in the United States and France.
To move supplies and employees through dangerous areas, and to secure raw materials, Lafarge funneled money to intermediaries who negotiated with the Islamic State, as well as Al Qaeda’s affiliate in Syria and other armed factions, according to the documents, which include testimony to investigators by former Lafarge officials, testimony and witness accounts of former employees, company correspondence and a confidential internal review of Lafarge’s Syria operations by the global law firm Baker McKenzie.To move supplies and employees through dangerous areas, and to secure raw materials, Lafarge funneled money to intermediaries who negotiated with the Islamic State, as well as Al Qaeda’s affiliate in Syria and other armed factions, according to the documents, which include testimony to investigators by former Lafarge officials, testimony and witness accounts of former employees, company correspondence and a confidential internal review of Lafarge’s Syria operations by the global law firm Baker McKenzie.
The only other penalty comparable to the Lafarge deal was the 2007 agreement between the Justice Department and Chiquita Brands International Inc., which admitted to paying off a violent, right-wing terrorist organization known as the United Self-Defense Forces of Colombia to keep its operations running. When Lafarge evacuated the plant in September 2014, the Islamic State took possession of the cement that had been produced there and sold it for about $3.21 million, authorities said Tuesday.
The only other settlement comparable to the Lafarge deal was the 2007 agreement between the Justice Department and Chiquita Brands International Inc., which admitted to paying off a violent, right-wing terrorist organization known as the United Self-Defense Forces of Colombia to keep its operations running.