Lafarge admits payments to Islamic State group

The Justice Department accused the company of turning a blind eye to the conduct of the Islamic State, negotiating a revenue-sharing agreement with the militant group as it was acquiring new territory and as Syria was mired in a brutal civil war. The company’s actions, already investigated by French law enforcement authorities, occurred before it merged with Swiss company Holcim to form the world’s largest cement maker.

Lafarge/Holcim operates a cement plant in Holly Hill, South Carolina.

Justice Department officials described it as the first case in which a company has pleaded guilty to conspiring to provide material support to a foreign terrorist organization. Lafarge and a long-defunct Syrian subsidiary entered the plea in federal court in Brooklyn, agreeing to criminal fines of $90.78 million and a forfeiture of $687 million.

“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,” said Assistant Attorney General Matthew Olsen, the Justice Department’s top national security official.

Prosecutors say the company paid through intermediaries nearly $6 million to IS and al-Nusrah Front, another militant group, in 2013 and 2014. The fixed monthly payments weren’t because of the company’s ideological alignment with the groups, the Justice Department said, but made purely in pursuit of an economic advantage.

The company had constructed a $680 million plant in northern Syria in 2011, and facing competition from cheaper cement imported from Turkey, regarded the payments to IS as a way to ensure the continued operations of the plant and to protect its employees and the transport of raw materials into the facility.

The Justice Department accused the company of using fake contracts and falsified invoices to hide the partnerships, and of committing to a revenue-sharing agreement with IS in hopes that it would incentivize the group to protect the company’s interests.

In one message, a company executive told colleagues that “we have to maintain the principle that we are ready to share the ‘cake,’ if there is a cake.'”

And after Lafarge evacuated the plant in September 2014, IS took possession of the cement that the company had produced and sold it at prices that would have yielded the group about $3.21 million, prosecutors say.

The payments came at a time when other companies were pulling operations out of the region and at a time when beheading videos released as publicity by IS made clear to the world the Islamic State’s barbaric actions.

Charging documents, for instance, quote an Aug. 20, 2014, email exchange in which company officials describe their negotiations with IS, with one talking about the need to check with a company lawyer about “the consequences of this kind of deal.” One day earlier, IS had released a grisly video of the murder of freelance American journalist James Foley.

“Make no mistake: Lafarge and its leadership had every reason to know exactly with whom they were dealing — and they didn’t flinch,” Deputy Attorney General Lisa Monaco said Tuesday.