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ICE Appeals ‘Victim’ Ruling

The Costa Rican state-owned utility that lost a bid earlier this month to become the first ‘victim’ compensated under federal law in an FCPA case has appealed the lower court’s decision.

Instituto Costarricense de Electricidad S.A. (ICE) asked the United States Court of Appeals for the Eleventh Circuit to overturn District Court Judge Marcia G. Cooke’s ruling that ICE wasn’t a victim of Alcatel-Lucent’s bribery and not entitled to restitution.

In the appeal filed Wednesday, ICE said the district court was wrong to conclude it was a co-conspirator and therefore could not have been a victim for purposes of U.S. federal law. That conclusion, ICE said in its brief, “is not supported by record evidence or the law.”

When she made her ruling at the June 1 hearing in Miami, Judge Cooke said the issues were too intertwined as to whether ICE was a victim or an offender, and that corruption was rampant at ICE.

Her decision cleared the way for Alcatel-Lucent’s $137 million settlement with the DOJ and SEC.

ICE had argued that just three of its directors and three employees out of 16,000 personnel benefited from Alcatel-Lucent’s bribery.

Alcatel-Lucent’s former top executive in Costa Rica, Edgar Valverde Acosta, said in a sworn statement filed in U.S. federal court last month that no one at ICE knew about Alcatel’s bribery except those directly involved. Acosta, 63, is serving a year in prison in Costa Rica for corruption.

ICE was the first party to ask a U.S. court to grant it victim’s status in an FCPA enforcement action.

The DOJ has opposed ICE’s petition. “The evidence gathered during the investigation,” the DOJ said in an earlier filing, “suggests that corruption at ICE was pervasive in the tender process and occurred at the highest reaches of ICE.”

Even if ICE is a victim, the DOJ said, restitution is limited to the victim’s “provable actual loss.” And that loss can’t be established for ICE within any reasonable time, if at all. So blocking resolution of the Alcatel-Lucent enforcement action wouldn’t serve justice, according to the DOJ.

Download a copy of ICE’s June 15, 2011 petition for a writ of mandamus under the victim’s rights act here.

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