Alcatel-Lucent, S.A. and three of its subsidiaries
are to pay US$137 million for violations of the US Foreign Corrupt
Practices Act relating to the bribing of foreign government
officials.
The payment resolves both criminal charges by the
US Department of Justice and civil claims by the US Securities and
Exchange Commission.
The December 2010 settlements were for
Alcatel’s alleged payment of millions of dollars in bribes to
secure a number of telecommunications contracts in Costa Rica,
Honduras, Malaysia and Taiwan.
The settlement is one of the largest to date and
marks the end of a record-setting year for FCPA enforcement.
Well over US$1 billion was paid in 2010 to settle claims brought by
the DOJ and the SEC, including major settlements with non-US
companies such as BAE Systems, Snamprogetti and Daimler – a
clear signal that US authorities are focusing their efforts on the
extraterritorial application of the FCPA .
The DOJ Settlement
The criminal charges were for violations of the
FCPA’s internal controls and book and records
provisions.
Alcatel agreed to pay US$92 million to the DOJ to
resolve the criminal charges under a three-year deferred
prosecution agreement involving measures such as an enhanced
corporate compliance programme and the appointment of an
independent compliance monitor for the three-year
period.
The size of the penalty reflects the extent of
Alcatel’s cooperation: it conducted a global internal
investigation, reported its findings to the DOJ and the SEC, and
decided, as a matter of company policy, to stop using third party
sales and marketing agents in its worldwide
operations.
The SEC Settlement
The civil case was for violating the FCPA’s anti-bribery,
books and records, and internal accounting controls provisions.
Alcatel agreed to pay US$45 million to the
Securities and Exchange Commission to settle the civil case,
representing its profits from illegal activities. It is also
prohibited from committing any future violations of the
FCPA.
*Note: the author is a US-qualified lawyer