HP to pay $US108 million for overseas bribery and corruption

Employees in Russia, Poland and Mexico were accused of bribing local officials

Hewlett-Packard will pay $US108 million in penalties after subsidiaries in Russia, Poland and Mexico were found to have paid bribes to win business, the US Department of Justice said.

An international subsidiary of HP has agreed to plead guilty to violating the US Foreign Corrupt Practices Act and admit to its role in bribing Russian officials to secure a big contract there, the US Department of Justice said.

The US is also entering into "criminal resolutions" with HP subsidiaries in Poland and Mexico, relating to contracts with Poland's national police agency and Mexico's state-owned petroleum company, the DOJ said.

The HP entities will pay a total of $US77 million in criminal penalties and forfeiture related to those dealings. HP has also reached a deal with the US Securities and Exchange Commission that will cost it a further $US31 million.

The subsidiaries created a "slush fund" for bribe payments and set up "an intricate web of shell companies and bank accounts" to launder money, Deputy Assistant Attorney General Bruce Swartz said in a statement.

HP said it had cooperated with the investigations.

"The misconduct described in the settlement was limited to a small number of people who are no longer employed by the company," John Schultz, HP's general counsel, said in a statement.

The investigation had been ongoing for some time, and HP said last month it was close to resolving the matter.

The Russian dealings date back to 1999, when the government there announced a project to automate the IT systems at the Office of the Prosecutor General of the Russian Federation -- essentially Russia's equivalent of the DOJ.

The project was worth more than $100 million, and employees at HP Russia structured the deal to include a fund of several million dollars, at least part of which was intended as bribes for Russian officials, the DOJ said.

The DOJ acknowledged HP's "extensive cooperation," and HP said it would set up certain compliance and reporting programs.

It's not the only company to have run into trouble doing business overseas. IBM and Oracle in the past have also reported potential violations of the Foreign Corrupt Practices Act.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags legalHewlett-PackardCriminal

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?