Deutsche Telekom to pay $95 million to settle US bribery charges

Deutsche Telekom and its Hungarian subsidiary Magyar Telekom have agreed to pay more than $95 million to settle US criminal and civil charges that they bribed government officials in Macedonia and Montenegro.

The settlement resolves a Foreign Corrupt Practices Act (FCPA) investigation by the US Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) against Deutsche Telekom and its majority-owned Magyar Telekom unit.

According to court documents, Magyar Telekom's scheme in Macedonia stemmed from potential legal changes being made to the telecommunications market in that country.

In early 2005, the Macedonian government tried to liberalise the Macedonian telecommunications market in a way that Magyar Telekom deemed detrimental to its Macedonian subsidiary, Makedonski Telekommunikacii AD Skopje (MakTel).

The complaint alleges that Magyar Telekom executives, with the help of Greek intermediaries, lobbied Macedonian government officials to prevent the implementation of the new telecommunications laws and regulations.

Magyar Telekom paid €4.875 as bribe money to Macedonian officials, who agreed to delay the entrance of a third mobile licence into the Macedonian telecommunications market, as well as other regulatory benefits.

The bribe money was paid through consultants, intermediaries and other third parties, including through sham consultancy contracts with entities owned and controlled by a Greek intermediary.