HP takes charge to settle DOJ kickbacks case

The company has settled accusations that it made improper payments to win US government contracts

Hewlett-Packard has reached a settlement with the U.S. Department of Justice over allegations that HP paid kickbacks to systems integrators in order to help it secure government contracts, HP said on Monday.

As a result of the settlement, HP expects to take a one-time charge of about US$0.02 per share against its earnings for the third quarter, the company said.

The DOJ said in 2007 that it had joined three whistleblower suits alleging that HP, Accenture and Sun Microsystems improperly solicited and provided payments for technology contracts with U.S. government agencies starting in the late 1990s.

HP allegedly paid more than $3 million to systems integrators between 2001 and 2006 in exchange for favorable treatment on government contracts, according to DOJ filings.

The lawsuits were originally filed in 2004 by Norman Rille, who was then a senior manager with Accenture, and Neal Roberts, a partner at PricewaterhouseCoopers.

On Monday, HP said its settlement with the DOJ also resolves the complaints in the case filed by Rille. As part of the settlement, HP admits to no wrongdoing. The settlement must be approved by the court, the DOJ and other agencies.

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