French cement firm pleads guilty to conspiring to support ISIS

Lafarge agrees to pay a fine of $US778m for conspiracy to provide material support to foreign terrorist organisations.

Breon Peace says leveraging ISIS to harm competitors defies belief. Picture: AFP

French cement firm Lafarge has pleaded guilty in a New York federal court to paying Islamic State and an al-Qa’ida affiliate to protect its Syrian cement plant, marking the US has charged a company with supporting terrorist organisations.

Lafarge agreed to pay $US778m ($1.2bn) in financial penalties and serve a term of three years probation. The company and its defunct subsidiary, Lafarge Cement Syria, pleaded guilty to conspiracy to provide material support to foreign terrorist organisations.

Lafarge admitted that from August 2013 to October 2014 it made payments to terrorist organisations that were intended to protect a cement facility in northern Syria that was completed in 2010 at a cost of $US680m. Lafarge was acquired by Swiss construction-material giant Holcim Ltd. in 2015.

“Today’s guilty pleas to terrorism charges by multinational construction conglomerate Lafarge SA and its Syrian subsidiary reflect corporate crime that reached a new low and a very dark place,” Deputy Attorney-General Lisa Monaco said.

Lafarge said that it worked with the Justice Department to resolve the matter. “Lafarge SA and LCS have accepted responsibility for the actions of the individual executives involved, whose behaviour was in flagrant violation of Lafarge’s code of conduct,” the company said.

Holcim said that none of the conduct involved Holcim or any Lafarge operations in the US.

Lafarge made a total of nearly $US6m in payments through intermediaries to Islamic State and al Qa’ida’s Syrian affiliate Nusra Front to preserve the operations of its cement factory, prosecutors said. With the protection of the terrorist groups, the companies made about $US70m in revenue, prosecutors said.

The Brooklyn US attorney’s office had jurisdiction to bring the charges because some of the payments were wire transfers that passed through the district it covers. As the scheme evolved, former Lafarge executives tried to negotiate a revenue-sharing agreement with ISIS while insisting that the company’s name not appear on any contract with the terrorist group, prosecutors said. They also sought the terrorist group’s help in blocking competitors from importing cement from Turkey, the Justice Department said.

“Leveraging ISIS to harm competitors defies belief, but it really happened,” said Brooklyn US attorney Breon Peace.

Lafarge evacuated the cement plant in September 2014 as ISIS militants advanced on the site and after Barack Obama outlined a plan to lead an international coalition to root out the terrorist group through military action. Justice Department officials said they worked in concert with French authorities, who have previously charged some former Lafarge executives for roles in the alleged scheme. The cases in France are pending.

The Wall Street Journal