Alcatel agrees to settle bribery case for $137 million
The logo of Alcatel-Lucent is pictured at the entrance of its Paris headquarters December 12, 2008.
Credit: Reuters/Charles Platiau
By Jeremy Pelofsky
(Reuters) - Alcatel Lucent SA has agreed to pay more than $137 million to settle U.S. charges that it paid millions of dollars in bribes to foreign officials to win business in Latin America and Asia, U.S. authorities said on Monday.
The telecommunications equipment maker was accused of making payments to government officials in countries including Costa Rica, Honduras, Taiwan and Malaysia to win or keep contracts worth tens of millions of dollars, the Securities and Exchange Commission and Justice Department said.
Between December 2001 and June 2006, the company used consultants who funneled more than $8 million in bribes to officials, and Alcatel also improperly hired third-party agents in countries like Nigeria to help win deals, authorities said.
Overall, the company admitted it earned about $48.1 million in profits as a result of the improper payments, the Justice Department said.
"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, head of the SEC's enforcement division, said in a statement.
Alcatel was charged with two counts of violating the U.S. Foreign Corrupt Practices Act and entered into a deferred prosecution agreement. Three of its subsidiaries agreed to plead guilty to one count each of conspiracy to violate the anti-bribery law.
The company agreed to pay $92 million to settle the criminal charges filed by the Justice Department and also pay more than $45 million to settle the SEC's civil charges.
In 2006, France's Alcatel bought Lucent Technologies Inc, including its famous Bell Laboratories, which was the pioneer of many communications technologies. The company said the bribery violations occurred before the combination.
Alcatel set aside money for the settlements in the fourth quarter of 2009 and said they would not have an impact on its 2010 results.
"We take responsibility for and regret what happened and have implemented policies and procedures to prevent these violations from happening again," Steve Reynolds, the company's general counsel, said in a statement.
The case is the latest in a series of bribery cases brought by the Obama administration to crack down on illegal payments by businesses to win contracts.
The cases are: USA v. Alcatel-Lucent France SA et al, 10-cr-20906 and Securities and Exchange Commission v. Alcatel Lucent SA, 10-cv-24620, in the U.S. District Court for the Southern District of Florida. (Additional reporting by Karey Wutkowski in Washington and Daniel Levine in San Francisco, editing by Gunna Dickson, Gary Hill)
Credit: Reuters (www.reuters.com)
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