Alcatel-Lucent pays US fine on corruption charges

28th December 2010, Comments 0 comments

French-based telecom equipment giant Alcatel-Lucent agreed to pay 137 million dollars in fines and penalties to settle US charges it paid bribes to win contracts in Latin America and Asia, officials said.

The US Justice Department and Securities and Exchange Commission reached the settlement with the Paris-based firm, according to a statement Monday.

The SEC said Alcatel's subsidiaries "used consultants who performed little or no legitimate work to funnel more than eight million dollars in bribes to government officials in order to obtain or retain lucrative telecommunications contracts and other contracts."

Alcatel agreed to pay more than 45 million dollars to settle the SEC's charges, and pay an additional 92 million dollars to settle criminal charges with the Department of Justice.

The Justice Department said the company violated the Foreign Corrupt Practices Act (FCPA) by Alcatel prior to its 2006 merger with US-based Lucent Technologies.

Alcatel-Lucent admitted that the company earned some 48.1 million in profits as a result of the actions, officials 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," said Robert Khuzami, director of the SEC's division of enforcement.

"Alcatel's bribery scheme was the product of a lax corporate control environment at the company."

According to the SEC complaint, Alcatel's bribes went to government officials in Costa Rica, Honduras, Malaysia, and Taiwan between December 2001 and June 2006.

US officials said the bribery payments were undocumented or improperly recorded as consulting fees in the books of Alcatel's subsidiaries and that head of units in the regions "either knew or were severely reckless in not knowing about the misconduct."

The case stemmed from an investigation by US agencies along with those rom Costa Rica and France, US officials said.

© 2010 AFP

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