A Costa Rican company objected Wednesday in federal court to a settlement of foreign bribery charges between the U.S. government and French telecommunications firm Alcatel-Lucent SA.
The Costa Rican communications and electric services firm Instituto Costarricense de Electricidad _ known by its Spanish acronym ICE _ contends that it was a victim of the rampant bribery committed by Alcatel and deserves to be paid as much as $400 million in restitution. ICE attorney Burton Wiand said the plea deals Alcatel negotiated with U.S. officials could shut it out of that money.
"These are mandatory rights, and we are entitled to those," Wiand said at a hearing before U.S. District Judge Marcia Cooke. "If you accept this plea, then I think our rights are gone."
But the Justice Department disagreed. Charles Duross, deputy chief of the department's fraud section, said ICE was "complicit in this corruption" because top ICE executives and members of its board of directors solicited tens of thousands of dollars in bribes from Alcatel and other companies seeking Costa Rican contracts.
"They are at the very least partially responsible for what was going on here," Duross said. "The entire process was corrupted."
Cooke set a June 1 date for Alcatel and three of its subsidiaries to finalize pleas in the criminal case, which was brought under the Foreign Corrupt Practices Act. ICE will be able to argue at that hearing it should be considered a corruption victim and is due restitution from Alcatel, but Cooke expressed some skepticism about whether it will succeed.
"You would not be at the top of the hit parade," the judge said.
The Justice Department and Securities and Exchange Commission have been increasingly using the anti-corruption law to target major corporations for shady overseas dealings, including recent cases against health care giant Johnson & Johnson, Mercedes-Benz maker Daimler AG and former Halliburton Co. subsidiary KBR. All reached settlements in court and paid fines.
Alcatel in December announced three subsidiaries would plead guilty to violating the corruption law and the French parent would enter into a deferred prosecution agreement requiring it to pay $92 million in fines but enabling it to avoid a criminal conviction. In addition, Alcatel must pay $45.3 million in a related SEC civil enforcement action.
Alcatel, which bought U.S.-based Lucent Technologies at the end of 2006, admitted paying bribes in exchange for business in Costa Rica, Honduras, Malaysia and Taiwan between 2001 and 2006. Court records indicate Alcatel paid about $18 million to Costa Rican "consultants" who, in turn, paid bribes to various executives and government officials.
"We intend to enter pleas of guilty under the agreements," said Alcatel attorney Martin J. Weinstein.
The Alcatel case was brought after the arrest in Miami of Christian Sapsizian, a former Alcatel executive who admitted paying bribes to ICE officials and began cooperating with U.S. prosecutors. Sapsizian is currently serving a 2 1/2-year prison sentence.
Curt Anderson can be found on Twitter at: http://twitter.com/Miamicurt