Lucent fined for violating bribery law

Telecommunications giant Lucent Technologies agreed to pay $1 million for violating a law against bribery by taking Chinese officials on sightseeing trips to Disneyland and elsewhere to win government contracts, the Justice Department said Friday.

The company also agreed to pay $1.5 million in a separate settlement with the Securities and Exchange Commission in which it neither admitted nor denied wrongdoing.

Between 2000 and 2003, Lucent spent more than $10 million on trips for about 1,000 Chinese government officials, the department said in a statement.

"Often, the customers dictated the substance and locations of the post-sale trips," the department said in a document outlining the agreement.

Lucent, which merged with Alcatel in 2006 and has facilities in Naperville and Lisle, admitted to wrongdoing as part of its settlement with the Justice Department. In the settlement with the SEC, it neither admitted nor denied wrongdoing.

Lucent steadily expanded its business in China after being awarded a telecommunications contract by the Chinese government in 1997. By 2003, revenue from its Chinese customers accounted for 11 percent of Lucent's consolidated revenue, according to court documents filed in the case.

Lucent paid for trips for Chinese officials through its sales department, according to the documents.

The trips were billed as training or factory inspections but often were dominated by stops in Disneyland, Universal Studios, Washington, Niagara Falls, San Diego, Boston, Las Vegas, the Grand Canyon, San Francisco, Napa Valley, Thailand, Hong Kong and Hawaii.

Internal Lucent documents spoke of using one trip for "strengthening the customer relationship," the Justice Department said.

"Lucent's contracts with its Chinese government customers often specified that Lucent had to provide the employees with a per diem while on the 'factory inspection' trips of $500 to $1,000 per day, even though Lucent also paid for all lodging, transportation, food and entertainment expenses," the Justice Department documents said.