HP's Moscow office raided in bribery probe

HP is alleged to have paid millions in bribes to secure a government IT contract

Russian authorities raided HP's Moscow offices Wednesday looking for clues in a multimillion-dollar bribery investigation.

In question is a €35 million ($47.8 million) contract to provide a "state-of-the-art computer system designed to provide secure communications for prosecutors throughout Russia," The Wall Street Journal reported Wednesday. German and Russian investigators are looking into allegations that HP paid €8 million in bribes to secure the deal, which dates back to August 2003.

An HP spokeswoman confirmed a company office in Russia was the subject of a search.

"This is an investigation of alleged conduct that occurred almost seven years ago, largely by employees no longer with HP. We are cooperating fully with the German and Russian authorities and will continue to conduct our own internal investigation," she said in an e-mail.

German prosecutors are following a complex network of payments and shell companies leading through the U.K., Latvia, Lithuania, Austria, Switzerland, as well as the U.S., according to the Journal, which cites German court documents and unnamed sources in its report.

Corruption is widespread in Russia, and U.S. companies can find it difficult to distance themselves from partners or subsidiaries who engage in bribery, which is illegal in the U.S.

HP reportedly learned of the investigation in December when German and Swiss authorities served the company with search warrants that named 10 suspects in the case.

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Robert McMillan

IDG News Service
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