The Department of Justice and the Securities and Exchange Commission capped off 2010 by closing another massive bribery investigation.
Paris-based telecommunications company Alcatel-Lucent and three of its subsidiaries have agreed to pay more $137 million to settle charges that it violated the Foreign Corrupt Practices Act by paying bribes to foreign government officials to win business in Latin America and Asia.
The company agreed to pay $92 million to settle criminal charges as part of a three-year deferred prosecution agreement with the U.S. Department of Justice, and $45 million in disgorgement to settle civil charges by the Securities and Exchange Commission. In addition, three of its subsidiaries will plead guilty to a criminal information charging one count of conspiracy to commit anti-bribery, books and records, and internal controls violations of the FCPA.
The settlements, which are subject to court approval, place Alcatel-Lucent seventh on the list of the top-ten FCPA cases of all time, according to The FCPA Blog.
As part of the DPA, Alcatel-Lucent agreed to hire an independent compliance monitor for three years to oversee the implementation and maintenance of an enhanced FCPA compliance program and to submit yearly reports to DoJ. The company already terminated its use of sales agents and consultants--the primary means by which some former employees made the improper payments.
“We take responsibility for and regret what happened and have implemented policies and procedures to prevent these violations from happening again,” Alcatel-Lucent general counsel Steve Reynolds said in a statement, adding that the violations largely occurred prior to the 2006 merger of Alcatel and Lucent Technologies.
According to the SEC's complaint, Alcatel's bribes went to government officials in Costa Rica, Honduras, Malaysia, and Taiwan between December 2001 and June 2006. Calling Alcatel's bribery scheme “the product of a lax corporate control environment at the company,” SEC Enforcement Division director Robert Khuzami said Alcatel and its subsidiaries failed to detect or investigate numerous red flags suggesting employees were directing sham consultants to provide gifts and payments to foreign government officials to illegally win business.