Alcatel-Lucent to pay $137 million in bribery case
NEW YORK: AlcatelLucent SA resolved U.S. criminal and civil probes into allegations that it paid bribes in Costa Rica, Taiwan and Kenya by agreeing to pay $137 million.
Prosecutors yesterday charged Paris-based AlcatelLucent with violating the internal controls and books and records provisions of the Foreign Corrupt Practices Act. The Justice Department will defer prosecution and drop the case after three years if the company improves its compliance program as promised.
Alcatel-Lucent, the world's biggest supplier of fixed-line phone networks, will pay a $92 million criminal penalty.
Three subsidiaries will plead guilty to anti-bribery provisions of the FCPA, according to the Justice Department. The company also will pay $45 million to settle civil charges filed by the U.S. Securities and Exchange Commission.
"Alcatel and its subsidiaries failed to detect or investigate numerous red flags suggesting their employees were directing sham consultants to provide gifts and payments to foreign government officials to illegally win business," Robert Khuzami, SEC enforcement director, said in a statement.
Three subsidiaries-AlcatelLucent France SA, AlcatelLucent Trade International AG and Alcatel Centroamerica SAwill plead guilty, according to the deferred-prosecution agreement filed yesterday in federal court in Miami.
Alcatel "pursued many of its business opportunities around the world through the use of third-party agents and consultants," according to a statement of facts admitted by the company in deferred-prosecution agreement.
A decentralized corporate structure also permitted corruption, as "the local employees were more interested in obtaining business than ensuring that business was won ethically and legally," the company admitted. -Bloomberg