Cable firms accused of paying bribes

From the shores of Fujairah in the United Arab Emirates where Alcatel-Lucent contractors began laying the Teams fibre optic cable to the shores of Mombasa. The cable firm was charged by US prosecutors in a federal court in Miami with violating the internal controls and records provision of the Foreign Corrupt Practices Act. Photo/FILE

A company awarded an $82 million (Sh6.56 billion) supply contract to lay the fibre optic cable in Kenya, has agreed to pay $137 million (Sh10.6 billion) to settle US criminal and civil charges that it paid bribes in Kenya and other countries.

Alcatel-Lucent SA, a French-based company was charged by US prosecutors in a federal court in Miami with violating the internal controls and records provision of the Foreign Corrupt Practices Act.

US and French authorities, investigated payments by Alcatel-CIT, which is the main subsidiary in France, made to a consultant in 2000 in connection to an unspecified supply contract in Kenya.

French authorities are also conducting investigations to ascertain whether Kenyan public officials received bribes in the said project. Alcatel-Lucent says it has forwarded its own findings about these payments to them.

The US prosecutors charged that Alcatel-Lucent hired sham sales and marketing agents and consultants to provide gifts and payments to foreign government officials to illegally win business.

According to a statement released on Monday by the US department of Justice, Alcatel-Lucent admitted that the company earned about $48.1 million (Sh3.75 billion) in profits as a result of these improper payments.

In 2006, Alcatel-Lucent was awarded the supply contract to lay The East African Marine Systems (Teams) fibre optics cable after the Kenyan government grew frustrated with another fibre-optic cable- The Eastern Africa Submarine Cable System (Eassy).

Prosecution of the case has been deferred by the US Justice Department and will be dropped after three years if the company improves its compliance program. As part of their settlement, the company will pay a $92 million (Sh7.1 billion) criminal penalty.

Three subsidiaries- Alcatel-Lucent France SA, Alcatel-Lucent Trade International AG and Alcatel Centroamerica SA will plead guilty to anti-bribery provisions of the FCPA.

The company also will pay $45 million (Sh3.5 billion) to settle civil charges filed by the U.S. Securities and Exchange Commission.