FBI rifles firm's ex-files for its conspiracy theory.

SGL Carbon Corp.'s top executives were in France for a meeting in June 1997 when a dozen FBI agents, some armed, raided the electrode maker's Charlotte offices. They seized its server, then rifled through files, searching for evidence of a price-fixing ring.

Since that day, SGL Carbon's three U.S. competitors have struck deals with the U.S. Justice Department, conceding they worked together to set prices on graphite electrodes, which steel makers use in smelting furnaces. The smallest, Pittsburgh-based Carbide/Graphite Group Inc., flipped first and got a slap on the wrist. In February Ridgeville, S.C.-based Showa Denko Carbon Inc. agreed to a $29 million fine. Then in April, the market leader, Danbury, Conn.-based Ucar International Inc., got a $110 million fine, a record for antitrust.

That leaves SGL Carbon, the second-largest, as the holdout. It has not been charged with anything, but the Justice Department investigation continues. "We'd kind of like to get this behind us," President Wayne Burgess says, "but we feel a little concerned about pleading a plea bargain for something we didn't really do."

In the late '80s and early '90s, the industry "went bankrupt, for all practical purposes," he says. Manufacturers simply raised prices to recoup losses. Ucar, though, has admitted that the competitors held meetings throughout the world to divide up territories and hike rates.

SGL Carbon, owned by a German company, is also facing two civil suits, one by Charlotte-based Nucor Corp. and the other a class action by 23 other steel makers. Nucor contends SGL Carbon overcharged it $40 million between 1992 and 1997. Punitive awards could be three times that if it wins.

With only four players in the market, the steel maker finds itself in the awkward position of having to buy from the company it's suing. Nucor Chairman Ken Iverson, CEO John Correnti and CFO Sam Siegel popped over to see their Charlotte neighbor in late April to talk settlement but to no avail. "The only nice thing I'd say they've done is that prices haven't gone up," Iverson says.

For now, SGL Carbon's 2,000 U.S. employees feel the pain. There will be no bonuses or raises this year. "There's a big potential fine over our head," Burgess says. "But I really can't say anything about the progress of the negotiations. They know our position. And we know theirs."