On December 27, 2010, Department of Justice (DOJ) reported that Alcatel-Lucent S.A. and three of its subsidiaries have agreed to pay a $92 million penalty to resolve a Foreign Corrupt Practices Act (FCPA) investigation into the sales practices of Alcatel S.A. prior to its merger with Lucent Technologies Inc. in 2006.
Alcatel-Lucent and DOJ agreed to resolve the FCPA charges by entering into a deferred prosecution agreement for a term of three years. According to court documents, Alcatel-Lucent was formed in 2006 after Lucent Technologies merged with Alcatel, a French telecommunications equipment and services company. Beginning in the 1990s and through 2006, Alcatel pursued many of its business opportunities around the globe through subsidiaries using third-party agents and consultants who were retained by Alcatel Standard. This business model was shown to be prone to corruption, as consultants were repeatedly used as conduits to bribe foreign officials and business executives of private customers to obtain or retain business in many countries.
Court documents allege that Alcatel-Lucent's three subsidiaries paid millions of dollars to bribe foreign officials in order to obtain and retain business. Alcatel-Lucent also admitted that it violated the internal controls and books and records provisions of the FCPA related to the hiring of third-party agents. Overall, the company admitted that it earned approximately $48.1 million in profits as a result of these payments.
In a related case, two former Alcatel executives were charged in March 2007 with conspiracy to violate the FCPA, making corrupt payments in violation of the FCPA, and laundering bribe payments through a third-party.