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