A judge ordered Hewlett-Packard to pay US$58.8 million (RM187.9 million) as a penalty for bribing Russian government officials for a contract as part of an agreement by HP in April.
Hewlett-Packard A.O. (HP Russia), an international subsidiary of the California technology company Hewlett-Packard Company (HP Co.), professed creating a secret slush fund and violating the Foreign Corrupt Practices Act (FCPA) in a Northern California court, as per the statement of the U.S. Department of Justice.
Hewlett-Packard and three subsidiaries agreed to pay $108 million in criminal and regulatory penalties at the cost of bribing foreign officials in Russia, Mexico and Poland.
Justice Department Deputy Assistant Attorney General Bruce Swartz said,”Hewlett-Packard subsidiaries, co-conspirators or intermediaries created a slush fund for bribe payments, set up an intricate web of shell companies and bank accounts to launder money, employed two sets of books to track bribe recipients, and used anonymous email accounts and prepaid mobile telephones to arrange covert meetings to hand over bags of cash.”
The company’s subsidiary in Russia paid more than US$2 million in bribes through agents and various shell companies using the two books and the secret spreadsheet.
In Poland, more than US$600,000 were paid as an intent for bribe and gift to a Polish government official to procure contracts with the national police agency.
HP paid around US$1 million in commissions in Mexico, to a consultant to triumph a software sale to Mexico’s state-owned petroleum company Pemex, and some amount was channeled to a company official.
The announcement was made by Principal Deputy Assistant Attorney General Marshall L. Miller of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office.
Miller refereed the most troubling fact to be the government contracting up for sale with Russia’s top prosecutor’s office.
“Tech companies, like all companies, must compete on a level playing field, not resort to secret books and sham transactions to hide millions of dollars in bribes. The Criminal Division has been at the forefront of this fight because when corruption takes hold overseas, American companies and the rule of law are harmed. Today’s conviction and sentencing are important steps in our ongoing efforts to hold accountable those who corrupt the international marketplace.”
U.S. Attorney Haag added,“Today’s conviction and sentence of HP Russia demonstrates that the United States Attorney’s Office is dedicated to aggressively prosecuting all forms of corporate fraud that touch our district, wherever they may occur. HP’s cooperation during the investigation is what we expect of major corporate leaders facing the challenges of doing business around the world.”
Assistant Director in Charge McCabe commented,“For more than a decade HP Russia business executives participated in an elaborate scheme that involved paying bribes to government officials in exchange for large contracts.”. “There is no place for bribery in any business model or corporate culture. Along with the Department of Justice, the IRS and international law enforcement partners, the FBI is committed to investigating corrupt backroom deals that threaten our global commerce.”
Representatives of the Palo Alto, California, company didn’t revert immediately.
HP’s general counsel, John Schultz, said when the settlement was reached in April that the misconduct was limited to a small number of people who are no longer with the company.
The Justice Department admired the aid bestowed by the Polish Appellate Prosecutor’s Office, the SEC’s Division of Enforcement, the Polish Anti-Corruption Bureau, the Public Prosecutor’s Office in Dresden, Germany, and their law enforcement partners in Hungary, Italy, Latvia, Lithuania, Mexico, the United Kingdom and Spain.