I was playing as TEC Rebels and I researched "Truce Amongst Rogues" and at that point in the game there was only one AI player left. The AI player kept spending money on my bounty, even though the Pirates were my allies and would not attack me.
I'm not sure what happens in multi-player, but the A.I. ought to figure this out. The bounty against me was over 20000, the A.I. bounty was 0 and the Pirates kept attacking the A.I.