ICE, DOJ Trade Arguments In First FCPA ‘Victims’ Case

Just three directors and three employees out of 16,000 personnel at Costa Rica’s Instituto Costarricense de Electricidad, S.A. (ICE) benefited from Alcatel-Lucent’s bribery, ICE said in a filing this weekend.

That makes ICE a victim and entitled to restitution under U.S. federal law, it said.

Last week the DOJ argued that ICE isn’t a real victim but a corrupt institution ineligible for the benefits it’s asking for.

This is the first time a U.S. court has been asked to grant victim’s status to an overseas government-linked institution in an FCPA enforcement action.

ICE is trying to block Alcatel-Lucent’s FCPA settlement with the DOJ and SEC until the court orders restitution, which is mandatory under 18 U.S.C. § 3663A, ICE said.

What about ICE’s own corruption? “Every commercial bribery episode,” ICE noted, “has dishonest individuals who dishonor and violate the trust accorded to them by their employers so they can channel business in return for payments.”

Taking a bribe isn’t the same as paying one, ICE said. Alcatel-Lucent benefited by obtaining or retaining business. That’s why its employee’s criminal actions should be imputed to it. But the bribery hurt ICE, so the bribe-taking of its personnel shouldn’t be used to block restitution.

Granting victim’s status and rights of restitution to overseas state-owned enterprises and others would likely complicate FCPA enforcement actions.

Last week, the DOJ said in a court filing that even if ICE is a victim, restitution is limited to the victim’s “provable actual loss.” ICE’s loss can’t be established within a reasonable time, if at all, the DOJ said.

In its response filed Friday evening, ICE argued that its losses aren’t that hard to establish. But even if doing the math causes some delays to the Alcatel-Lucent settlement, that’s okay if justice is served, ICE said.

*     *     *

Download ICE’s May 27, 2011 reply to the DOJ’s opposition to ICE’s petition for relief and restitution here.

Download a copy of the DOJ’s brief here, and Alcatel-Lucent’s brief here.

Download a copy of ICE’s May 2, 2011 petition for relief pursuant to 18 U.S.C. §3771(d)(3) and objection to plea agreements and deferred prosecution agreement in U.S. v. Alcatel-Lucent S.A. here.