Alcatel allegedly broke Foreign Corrupt Practices rules by paying $8m in bribes to government officials

US authorities charged Paris based telecoms company Alcatel-Lucent with bribing foreign government officials to win contracts in Latin America and Asia.

For its part Alcatel agreed to pay $45m to the Securities and Exchange Commission to settle the charges and an extra $92m to the Department of Justice.

The SEC claimed that Alcatel broke Foreign Corrupt Practices rules by paying $8m in bribes to government officials in order to secure business.

“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 enforcement for the SEC. “Alcatel’s bribery scheme was the product of a lax corporate control environment at the company.”

The SEC’s enforcement officer Glenn Gordon added: “The serious sanctions Alcatel has agreed to, including paying back all net profits made on the contracts Alcatel illegally obtained, should serve as a reminder that we are committed to enforcing the FCPA and a level playing field for companies seeking to obtain or retain business in other countries.”

Alcatel’s bribes went to government officials in Costa Rica, Honduras, Malaysia, and Taiwan between December 2001 and June 2006, according to the SEC. All of the bribery payments were recorded as consulting fees in Alcatel’s books, continued the SEC.

The leaders of several Alcatel subsidiaries and geographical regions, including some who reported directly to Alcatel’s executive committee, either knew or were severely reckless in not knowing about the misconduct.