Alain Belda, chairman and CEO of Alcoa Inc. Alcoa is under investigation by the US Justice Department. - File

The United States Justice Department has begun a criminal investigation into whether aluminium maker Alcoa Inc participated in bribery in the Persian Gulf state of Bahrain.

Alcoa is co-owner with the Jamaican Government of the Jamalco aluminium refinery in Clarendon.

In documents filed Thursday in US District Court, federal prosecutors asked a judge to halt a federal civil lawsuit that accused Pittsburgh-based Alcoa of bribing officials through overseas shell companies to secure hundreds of millions of dollars in overpayments.

"The United States has a direct and substantial interest in this case, as the subject matter giving rise to this case is also the subject of an ongoing federal criminal investigation," prosecutors in the Justice Department's fraud section said in court filings.

Aluminum Bahrain BSC, also known as Alba, in which the Bahrain government holds a 77 per cent stake, is seeking more than US$1 billion (€0.65 billion) in damages from Alcoa and other affiliated defendants, according to a federal lawsuit filed last month.

"The Alba complaint alleges numerous facts which, if true, could be relevant to the government's criminal investigation and a potential criminal trial," prosecutors said in court filings.

Liability

"As the criminal investigation arises out of the same facts and circumstances on which the claims in this civil action are based, the determination of potential liability against possible subjects of the investigation, particularly if they are charged with crimes as a result of the investigation, will turn on the same essential factual questions at issue in this civil action," the government said.

Alba, a 30-year Alcoa customer, and Alcoa do not object to the government's request to temporarily halt the civil proceedings, according to court documents.

"We were approached and asked and we agreed to the stay," Alcoa spokesman Kevin Lowery told The Associated Press early Friday.

"We obviously are going to cooperate fully. We see this as an opportunity to see a speedy resolution to the entire matter."

A Justice Department spokesman did not immediately reply to an email seeking comment early Friday.

Alcoa, the world's third-largest aluminum producer, reported 2007 revenue of US$30.75 billion, an all-time record.

Alba, which operates one of the world's largest aluminum smelters, also sued Alcoa World Alumina LLC, a global joint venture 60 per cent owned by Alcoa and 40 per cent owned by Australia's Alumina Limited.

Full review

The lawsuit also named William Rice, an Alcoa World Alumina executive, and Victor Dahdaleh, a Canadian citizen who has acted as an agent for Alcoa and Alcoa World Alumina.

After being contacted by Alba about the allegations, Alcoa offered to conduct a full review of its dealings with Alba over the past 20 years, but Alba chose to sue, Lowery said in February.

A "very fast review" done by Alcoa found nothing that deviated from standard practices, which prohibit improper activity by the company's employees, partners and contractors, Lowery said.

The company wasn't aware of any wrongdoing and would "vigorously defend" the lawsuit, he said.