Alcatel-Lucent, S.A. ("Alcatel"), formerly known as Alcatel, S.A., a French corporation headquartered in Paris, France, is one of the world's largest providers of telecommunications equipment and services, with more than 75,000 employees in 140 countries, including the United States. Until November 30, 2006, Alcatel's American Depository Receipts ("ADRs") were registered with the Commission pursuant to Exchange Act Section 12(b) and traded on the New York Stock Exchange ("NYSE"). As such, during the time the relevant conduct occurred, Alcatel was required to file reports with the Commission under Section 13 of the Exchange Act, and was an "issuer" within the meaning of the FCPA. Alcatel conducted its commercial transactions through its subsidiaries. On November 30, 2006, an Alcatel subsidiary merged with Lucent Technologies Inc. in the United States and Alcatel changed its name to Alcatel-Lucent, S.A. After the merger, the company's shares were traded on the Paris Euronext exchange and as ADRs on the NYSE.
Alcatel-Lucent France, S.A., which was known before the 2006 Merger as "Alcatel CIT, S.A." (hereinafter "Alcatel CIT"), was headquartered in Vélizy, France, just outside Paris. Alcatel CIT was a wholly owned subsidiary of Alcatel, and was incorporated in France. Accordingly, Alcatel CIT was a "person other than an issuer or a domestic concern" within the meaning of the FCPA. Alcatel-Lucent Trade International, A.G., which was known before the 2006 Merger as "Alcatel Standard, A.G." (hereinafter "Alcatel Standard"), was headquartered in Basel, Switzerland. Alcatel Standard was a wholly owned subsidiary of Alcatel, and was incorporated in Switzerland. Accordingly, Alcatel Standard was a "person other than an issuer or a domestic concern" within the meaning of the FCPA. Alcatel Centroamerica, S.A., which was known before the 2006 Merger as "Alcatel de Costa Rica, S.A." (hereinafter "ACR"), was formed under the laws of Costa Rica and was headquartered in San Jose, Costa Rica. ACR was a wholly owned subsidiary of Alcatel. Accordingly, ACR was a "person other than an issuer or a domestic concern" within the meaning of the FCPA. Alcatel SEL, A.G. ("Alcatel SEL") was formed under the laws of Germany and was headquartered in Stuttgart, Germany. Alcatel SEL was an indirect subsidiary of Alcatel. Alcatel Network Systems Malaysia Sdn. Bhd. ("Alcatel Malaysia") was founded as a joint venture in 1992 in Kuala Lumpur, Malaysia. Alcatel owned a majority share of and exercised control over the joint venture.
Alcatel itself did not conduct actual business with any customer. Starting in the 1990s, Alcatel utilized a consistent strategy to obtain contracts in many parts of the world, under which Alcatel typically used a subsidiary in the country to obtain contracts. Then Alcatel’s subsidiaries used consultants who performed little or no legitimate work to funnel more than $29 million in bribes to government officials in Costa Rica, Honduras, Malaysia, Taiwan, Kenya, Nigeria, Bangladesh, Ecuador, and Nicaragua in order to obtain or retain lucrative telecommunications contracts and preferential treatment. The contracts obtained through these bribes amounted to over $800 milliion.
On December 27, 2010, the DOJ filed a two count Information against Alcatel alleging violations of the Books & Records and Internal Controls provisions of the FCPA. At the same time, Alcatel entered into a Deferred Prosecution Agreement with the DOJ. In the agreement, Alcatel admitted responsibility for the actions listed in the Information and agreed to pay a fine of $92 million and implement enhanced compliance controls, including the hiring of an independent monitor for a term of three years.
On May 3, 2011, the Instituto Costarricense de Electricidad (“ICE”) filed a motion to be deemed a "victim" of Alcatel's crimes, enabling ICE to collect restitution from Alcatel. The court denied this motion, and on August 3, 2012, the Court of Appeals for the Eleventh Circuit rejected ICE's appeal citing a lack of jurisdiction to hear the case.
