
Bribery, according to the DOJ. Lucent technologies helped wrap up a DOJ investigation on Tuesday by agreeing to pay $1 million for FCPA violations. From 2000 to 2003 the company reportedly spent over $10 million on about 315 various trips for approximately 1,000 Chinese government officials. This included all expense paid trips to Disneyland, Universal Studios, Las Vegas, the Grand Canyon, Boston, San Fransisco, Hawaii, Hong Kong and, well, a bunch of places that don’t have anything to do with Lucent’s work. On top of that, each official was allegedly given a $500 to $1,000 per diem to spend at their will. Although most people would appreciate lavish vacations like this, the DOJ found that Lucent’s motivation was, unfortunately, to secure Chinese contracts.
The trips typically lasted 14 days and cost between $25,000 and $55,000 each. The money came out of Lucent’s sales department and was falsely documented as “factory inspection” or “training” trips, but little to no time was actually spent in either regard. Although by 2001 Lucent had outsourced the vast majority of its work and had no factories for customers to tour, the company still paid for factory tours across the world to countries such as the United States, Europe, Japan, Australia, Canada, etc.
The Justice Department will not prosecute Lucent should the company agree to all the terms of the agreement. This includes the aforementioned fine, as well as adding stronger internal controls, maintain fair and accurate books and records, implement a new FCPA compliance program and, most importantly, stop bribing customers. In a separate but related settlement with the SEC, Lucent agreed to pay $1.5 million but neither admitted nor denied guilt. These decisions come from alleged violations committed before Alcatel bought out Lucent in 2006.


