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ICE Loses ‘Victim’ Claim In Eleventh Circuit

The U.S. Court of Appeals for the Eleventh Circuit today said a lower court didn’t make a mistake when it denied victim status to a Costa Rican state-owned utility.

“The district court identified the pervasive, constant, and consistent illegal conduct conducted by the ‘principals’ (i.e. members of the Board of Directors and management) of ICE . . . .,” a two-judge panel wrote for the Atlanta-based Eleventh Circuit.

In a petition for mandamus filed Wednesday, ICE — the Instituto Costarricense de Electricidad S.A. — said the federal district court in Miami had been wrong to conclude earlier this month that ICE was a co-conspirator in Alcatel-Lucent’s bribery and therefore could not have been a victim for purposes of U.S. federal law.

Following today’s ruling, Alcatel-Lucent’s $137 million FCPA settlement with the DOJ and SEC will go forward.

Under federal rules, petitions for mandamus — requests for appellate courts to direct lower courts to take certain action — have to be decided within 72 hours. ICE’s mandamus petition asked the appellate court to stop the Alcatel-Lucent settlement and give victim status to ICE under federal law.

ICE was the first foreign government-linked entity to claim victim’s rights in an FCPA enforcement action. If it had succeeded, the Costa Rican utility would have been entitled to restitution.

With potentially millions at stake, ICE’s U.S. lawyers were aggressive in attacking the way the DOJ and SEC handled the case.

ICE accused them of ignoring federal victim-rights laws and holding an “imperialist” view of Latin America.

The DOJ said it always treated ICE and the Costa Rican government with courtesy and good faith, and that the mutual cooperation even resulted in Costa Rica receiving $10 million in restitution last year from Alcatel-Lucent France, S.A. for “moral damages” to the country’s citizens.

“This marked the first time in Costa Rica’s history that a foreign corporation paid the Costa Rican government damages for corruption,” the DOJ said.

Despite that record, the DOJ said, the case was marked by ICE’s “vitriolic allegations and false accusations questioning the motives, competence, and conduct” of the DOJ and SEC.

ICE’s failure to gain victim status will probably deter other foreign governments and state-owned enterprises from rushing to intervene in FCPA enforcement actions. 


Download a copy of the Eleventh Circuit’s June 17, 2011 order denying mandamus to ICE here.

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

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

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