Siemens agreed to pay a $175,000 fine for not disclosing two corporate felony convictions on a variety of FCC wireless license applications. The convictions stem from Siemens in 2008 pleading guilty to violating the accounting provisions of the Foreign Corrupt Practices Act through bribery of foreign government officials and from a 2007 guilty plea to a federal charge of obstruction of justice in a civil matter, said the Enforcement Bureau in its order issued Thursday. The failure to disclose "is particularly troubling because the underlying acts included misdeeds involving foreign telecommunications regulators," the bureau said, saying the consent decree includes that the two Siemens subsidiaries involved -- Siemens Corp. and Siemens Medical Solutions -- corrected the wireless application submissions on their own initiative and were fully cooperative with a bureau investigation afterward. Under the consent decree, the two also will develop and implement a compliance plan aimed at ensuring accurate future filing of wireless license applications, including a compliance manual and compliance training. Siemens didn't comment.
Ericsson confirmed it received a voluntary request from U.S. authorities to answer questions about its operations. "While we strive to at all times conduct our business in compliance with applicable laws, matters do arise from time to time as a result of the global nature of our business," said a company statement Friday. "We will not provide any detailed comments on the request as such, but can say that it relates to Ericsson's anti-corruption program and questions related to the Foreign Corrupt Practices Act. Ericsson cooperates with US Authorities and works diligently to answer the questions."
The FCC should not renew the licenses for News Corp.’s WTTG-TV Washington, WDCA-TV Washington and WUTB-TV Baltimore, the Citizens for Responsibility and Ethics in Washington said in a petition filed with the FCC this week (http://xrl.us/bnms7d). News Corp. and Chairman Rupert Murdoch “have committed egregious violations of law ... that include illicit payments by News Corp. employees to British public officials in violation of the Foreign Corrupt Practices Act, lying under oath, and allegations that News Corp. hacked into voicemails of 9/11 victims that currently are subject of a criminal investigation in the United States,” the petition said. A News Corp. spokesman declined to comment. “Though these crimes were not directly broadcast related, individuals in News Corp.’s chain of responsibility were involved in the misconduct and their behavior related directly to their roles as members of the news media,” the petition said. The petition called for an FCC hearing on the issue.
Frequent updates at the FCC by News Corp. and the addition of internal watchdogs are good ways to guard against the kind of illegality in the U.S. that continues to swirl around the company and its newspapers in the U.K., said industry executives. News Corp. closed its News of the World newspaper two Sundays ago after it was revealed its reporters hacked into the phone systems of politicians and private citizens. The FBI and Justice Department have reportedly opened investigations into the scandal after several U.S. lawmakers pushed for increased scrutiny based on potential violations of the Federal Foreign Corrupt Practices Act (CD July 14 p7). News Corp. recently hired Williams & Connolly, a prominent Washington, D.C., criminal defense firm, as the legal stakes of the scandal continue to grow.
The FBI opened a probe of News Corp.’s role in the alleged hacking of 9/11 victims’ phones, the Associated Press reported Thursday. News Corp. declined to comment on the report. It remains unlikely that News Corp.’s problems with the News of the World newspaper, shut on Sunday, could lead to the company losing its U.S. broadcast licenses, Stifel Nicolaus analysts wrote investors. The FCC has narrowly interpreted the role of character in broadcast licenses and has rarely invoked that factor when revoking or preventing renewal of a license, they said. The loss of such a license generally is due to felonies and/or misrepresentation to the government, they said. Several lawmakers on Wednesday (CD July 14 p7) urged the U.S. government to investigate possible News Corp. violations of the Foreign Corrupt Practices Act related to the phone hacking scandal. An FCPA conviction “would ratchet up the heat and could provide a basis for someone to call on the FCC to hold a hearing,” Stifel said.
News Corp.’s withdrawn bid for British Sky Broadcasting leaves the would-be acquirer with a large amount of cash on hand, potentially clearing the way for other media purchases, said industry executives. Another try at the U.S. satellite TV market seems unlikely, but a content acquisition is possible, they said. News Corp. said Wednesday it won’t bid for the 61 percent of BSkyB it doesn’t own, as controversy over phone hacking by a News Corp.-owned newspaper continues to heat up in the U.K.
Jorge Granados and Manuel Caceres, Colombian nationals who respectively are the former CEO and the vice president of business development for Miami-based service provider LatiNode, have been indicted for allegedly paying more than $500,000 in bribes to government officials in Honduras, the U.S. Justice Department said. Granados and Caceres are charged with criminal violations of the anti-bribery provisions of the Foreign Corrupt Practices Act and international money laundering. In December 2005, LatiNode learned that it was the sole winner of an “interconnection agreement” with Empresa Hondureña de Telecomunicaciones (Hondutel), the state-owned operator in Honduras. The agreement permitted LatiNode to use Hondutel’s lines in order to establish a network between Honduras and the U.S. and provide long distance services between the two countries. LatiNode was required to pay Hondutel a set rate per minute for calls to Honduras. On April 7, 2009, LatiNode pleaded guilty to a one-count information charging the company with a criminal violation of the FCPA. As part of the plea agreement, LatiNode agreed to pay a $2 million fine.
Alcatel-Lucent agreed to pay $137.4 million and change its procedures to avoid U.S. prosecution on charges involving bribe payments in Costa Rica, Taiwan and Kenya, the company said in an SEC filing. Its management has adopted strong compliance and training programs to prevent any recurrence, a spokeswoman said. Within months of becoming CEO, Ben Verwaayen announced that “we will no longer conduct our business through the use of sales and marketing agents and consultants,” she said. Three subsidiaries -- Alcatel-Lucent France, Alcatel-Lucent Trade and Alcatel Centroamerica -- will plead guilty to violating the Foreign Corrupt Practices Act’s anti-bribery provisions, the filing says. The company is cooperating with U.S., French and Costa Rican authorities. Under an agreement in principle, the Justice Department would defer prosecution of Alcatel-Lucent on charges that it violated the internal controls and the books and records provisions of the Foreign Corrupt Practices Act. The company would be on probation three years and agree to work with a French anti-corruption monitor. The company is still working on final agreements, the spokeswoman said. “There can be no assurances, however, that final agreements will be reached with the agencies or accepted in court,” according to the filing. Under the Justice Department agreement, the company would pay a $92 million criminal fine over three years. It also would enter into a consent decree with the SEC and pay $45.4 million.
IP-based networking equipment maker UTStarcom said it agreed to pay a $3 million penalty to the Securities and Exchange Commission and the Department of Justice over bribes paid in China. The case, filed in the U.S. District Court for the Northern District of California, is another wake-up call for U.S. companies to comply with the Foreign Corrupt Practices Act (FCPA), SEC officials said in an interview.
VoIP provider Latin Node pleaded guilty in the U.S. District Court for the Southern District of Florida and agreed to pay a fine of $2 million over the next three years for violation of the Foreign Corrupt Practices Act, a court filing said. The Florida-based telecom company was charged with violating the Act’s anti-bribery provisions by making improper payments in Honduras and Yemen. The company paid or arranged payments to officials in exchange for interconnection agreements, the filing said.