Alcatel-Lucent to Pay $137M to Settle Foreign Bribery Charges


Alcatel-Lucent (NYSE:ALU) has agreed to pay more than $137 million to settle charges it bribed foreign government officials in Latin America and Asia for a period of four-and-a-half years ending in 2006, when Alcatel completed its merger with Lucent.

The company will pay $45 million to the U.S. Securities and Exchange Commission and $92 million to the Department of Justice following their investigations of violations of the Foreign Corrupt Practices Act [FCPA].

Continue Reading Below

Alcatel allegedly used consultants to bribe government officials in Costa Rica, Honduras, Malaysia and Taiwan with more than $8 million in exchange for contracts from December 2001 to June 2006.

While the French telecommunications company will be criminally charged, prosecution of those charges will be deferred for a three-year period. Still, each of its three subsidiaries will plead guilty to one count of conspiracy to commit anti-bribery, books and records, and internal controls violations to the FCPA.

“We take responsibility for and regret what happened and have implemented policies and procedures to prevent these violations from happening again,” Steve Reynolds, Alcatel-Lucent’s general counsel, said in a statement.

“We are pleased to have reached these settlements and look forward to putting these matters behind us,” he said, adding that the merged company is “radically different.”

Since their combination, Alcatel has hired a new CEO, new executive committee and appointed a different board of directors. It also has a zero-tolerance policy regarding bribery and corruption and has a system in place designed to prevent those types of situations.

In 2008, Alcatel-Lucent announced that it would terminate the use of sales agents and consultants, the primary means by which certain former employees made improper payments and bribes, the first to do so in its industry.

What do you think?

Click the button below to comment on this article.