Alcatel-Lucent agrees to pay settlement for alleged bribes

Alcatel-Lucent puts to stop using agents
Alcatel-Lucent will stop using sales and marketing agents in conducting its business. This development comes on the back of confirmed reports that the company has paid $137.4 million in fines for alleged bribes paid in Costa Rica, Taiwan and Kenya.

“The proposed settlement resolves the company’s FCPA (Foreign Corrupt Practices Act) liability with the Department of Justice and Securities and Exchange Commission. These settlements do not resolve the FCPA liability, if any, of any involved individuals. Alcatel-Lucent is not aware of any other pending actions with U.S. regulators”, said the company in a statement addressed to

The company stated that it has implemented “vigorous compliance and training programs designed to prevent similar situations from happening in the future”.

“In particular, within months of joining the company as CEO, Ben Verwaayen announced that we will no longer conduct our business through the use of sales and marketing agents and consultants”, declared the company’s new management.

On Friday, Alcatel-Lucent agreed to pay $137.4 million for alleged bribes paid in Costa Rica, Taiwan and Kenya, to avoid U.S prosecution, according to a Bloomberg report. The agreement would then see Alcatel-Lucent entering a three-year probationary period and accept a French anti-corruption monitor.

According to a company regulatory filing, three subsidiaries, namely Alcatel-Lucent France, Alcatel-Lucent Trade and Alcatel Centroamerica, have been violating the FCPA’s internal controls and books and records provision. The mother company, headquartered in Paris, has welcomed an accord with the Securities and Exchange Commission (SEC).

“If finalized, the agreements would relate to alleged violations of the FCPA involving several countries, including Costa Rica, Taiwan, and Kenya”, said the officials on Friday.

Alcatel would pay a $92 million criminal fine over three years to the Justice Department and a further $45,4 million to SEC.

The company was accused of using a consulting company to offer bribes to a Costa Rican official, member of the board of Costa Rica’s state-owned telecommunications authority, who in turn would award Alcatel with a lucrative cell phone contract.

Two former Alcatel executives were involved in the case, including Christian Sapsizian, a former deputy vice president, who pleaded guilty in June 2007 and is currently serving a 30-month prison term. However, the investigation “has not yet concluded”, said prosecutors.

Other settlements refer to illicit payments involving a Taiwan Railway contract, a supply contract in Kenya, several payments made by the subsidiaries in Nigeria and an accusation of favoritism in being awarded the submarine cable contract linking Tahiti and Hawaii.