Alcatel-Lucent to pay $137 million to settle US bribery charges

Alcatel-Lucent, the French telecommunications giant, yesterday agreed to pay $137 million to settle US federal criminal and civil charges for allegedly bribing foreign government officials to win telecom contracts.

The charges are against the global sales practice of Alcatel starting in the 1990s and continuing through late 2006, just prior to its 2006 merger with Lucent Technologies Inc.

The US Department of Justice (DoJ) alleges that Alcatel Lucent between December 2001 and June 2006 paid millions of dollars in bribes to foreign officials for the purpose of obtaining and retaining business in Costa Rica, Honduras, Malaysia and Taiwan.

It also paid bribes through third-party agents to government officials in Kenya, Nigeria, Bangladesh, Ecuador, Nicaragua, Angola, Ivory Coast, Uganda and Mali.

The DoJ alleges that Alcatel won three contracts in Costa Rica worth a combined total of more than $300 million as a result of corrupt payments to government officials and from which Alcatel reaped a profit of more than $23 million. Alcatel wired more than $18 million to two consultants in Costa Rica, which had been retained by Alcatel in connection with obtaining business in that country.

Alcatel hired a perfume distributor, with no experience in telecommunications, as a consultant after being personally selected by the brother of a senior Honduran government official and bribes were paid to the family of the senior Honduran government official in exchange for Alcatel retaining contracts worth approximately $47 million, from which Alcatel earned $870,000.