HP to Pay $58.8 Million |to Settle Bribery Charges

(CN) – Hewlett-Packard must pay $58.8 million after admitting it bribed government officials in Moscow to secure a lucrative contract with Russia’s top prosecutor.
     U.S. District Judge Lowell Jensen ordered the fine after the computer giant pleaded guilty pleaded guilty to violating anti-bribery and accounting provisions of the Foreign Corrupt Practices Act.
     According to the U.S. Department of Justice, executives of HP Russia (also known as ZAO Hewlett-Packard A.O.), created a multimillion dollar slush fund, from which more than $2 million was paid out in bribes through varies shell companies and individuals.
     The scheme, which prosecutors described as “brazen,” was intended to snare a $45 million contract with the Office of the Prosecutor General of Russia. According to investigators, the employees involved kept two sets of books and secret spreadsheets to keep track of their activities.
     “Hewlett Packard’s Russia subsidiary used millions of dollars in bribes from a secret slush fund to secure a lucrative government contract,” said principal deputy assistant attorney general Marshall Miller of the Justice Department’s Criminal Division said in a written statement.
     “Even more troubling was that the government contract up for sale was with Russia’s top prosecutor’s office,” he said.
     The plea deal came as part of an agreement by HP in April to pay a total of $108 million to settle investigations that it paid bribes to win public contracts in Russia, Poland and Mexico.
     The plea bargain came as part of an agreement HP reached with prosecutors in April in which they agreed to pay U.S. regulators $108 million to settle a corruption scandal involving employees at HP subsidiaries in Russia, Poland and Mexico.
     In Poland, company employees gave cash, computers and audio and visual equipment to the head of It at the county’s police headquarters; In Mexico the company reportedly paid officials about $1.4 million to win a software contract with Pemex, the country’s state-owned oil and gas company.
     “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,” Miller said.
     In a statement of its own, HP said it “fully cooperated” with prosecutors during the investigation.
     “The misconduct described in the settlement was limited to a small number of people who are no longer employed by the company,” said HP’s Executive Vice President and General Counsel John Schultz in the statement.

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