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Deutsche Telekom to pay $95 million to settle FCPA charges

Company accused of bribing government officials in Macedonia and Montenegro

Deutsche Telekom AG and one of its business units are resolving to do better in 2012.

Last week, the Germany-based telephone company and a Hungarian unit, Magyar Telekom, agreed to pay more than $95 million to settle U.S. criminal and civil charges claiming they violated the Foreign Corrupt Practices Act (FCPA) by bribing government officials in Macedonia and Montenegro. The companies also agreed to improve compliance programs.

The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) said Magyar executives arranged to pay $15.8 million to foreign officials in 2005 and 2006 in order to reap business benefits.

The SEC also filed separate civil charges against three former Magyar executives, including the CEO, director of central strategic organization, and director of business development and acquisitions.

“Magyar Telekom’s senior executives used sham contracts to funnel millions of dollars in corrupt payments to foreign officials who could help them keep competitors out and win business,” Kara Novaco Brockmeyer, chief of the SEC enforcement division’s unit handling FCPA cases, said in a statement.

Deutsche Telekom has also been in the news recently regarding AT&T’s failed attempt to purchase its U.S. subsidiary, T-Mobile.

Read Reuters for more about the company’s bribery settlement.

Contributing Author

Ashley Post

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