Home / / Alcatel-Lucent settles bribery charges for $137m

Alcatel-Lucent settles bribery charges for $137m

Company accused of paying bribes to win contracts in Latin America, Asia

Alcatel-Lucent settles bribery charges for $137m
Alcatel-Lucent has agreed to pay out $137 million to settle bribery charges stemming from dealings in Latin America and Asia between 2001 and 2006.

Alcatel-Lucent will pay $137m to settle charges by the US that it paid bribes to win Latin American and Asian contracts, the company has revealed.

The firm was accused of bribing government officials in Costa Rica, Honduras, Malaysia and Taiwan.

Both the US Securities and Exchange Commission (SEC) and the Department of Justice were investigating the company for violating the Foreign Corrupt Practices Act. 

The bribes were allegedly paid to government officials between 2001 and 2006, before the Alcatel-Lucent merger.

Alcatel-Lucent has agreed to pay $92m to settle the criminal charges from the Justice Department, plus an additional $45m to settle civil charges brought by the SEC.

The initial legal agreements with the SEC and Department of Justice were originally disclosed in public filings in 2009 and were included as part of the company's year end 2009 results filing issued February 11, 2010, according to Alcatel-Lucent.

The company says the pay-out of $137 million will not affect 2010 results and the settlements will be submitted to the US Federal Court for formal approval in early 2011.

In addition to Alcatel-Lucent entering into a three-year deferred prosecution agreement,  three Alcatel-Lucent subsidiaries will each plead guilty to one count of conspiracy to commit anti-bribery, books and records, and internal controls violations of the FCPA. 

"We take responsibility for and regret what happened and have implemented policies and procedures to prevent these violations from happening again. The violations largely occurred prior to the merger of Alcatel and Lucent Technologies and involved improper activities in several countries," said Steve Reynolds, Alcatel-Lucent general counsel.

"These settlements resolve the company's FCPA liability with the DOJ and SEC.  We are pleased to have reached these settlements and look forward to putting these matters behind us."

Since the Alcatel-Lucent merger in 2006, the company now has different management, including a new CEO, a new executive committee and a different Board of Directors.

According to Reynolds; "Alcatel-Lucent has a zero-tolerance policy regarding bribery and corruption and has a system in place with strong processes and internet-based and live training designed to prevent these types of situations in all aspects of our business."

The company has also terminated the use of sales agents and consultants, the primary means by which former employees were able to make the alleged bribes.

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