Hewlett-Packard Bribed Russian Officials: HP Fined for Using Cash and Gifts to Win Contracts in Mexico, Poland and Russia
On Thursday, a U.S. judge ordered computer maker Hewlett-Packard (HP) to pay a $58.8 million fine for charges of bribery.
The company was found to have bribed government officials in Moscow so that a contract with the office of the prosecutor general in Russia would be awarded to them, Inquirer reports.
U.S. District Judge Lowell Jensen of Northern California ordered the fine after HP admitted their guilt in violating the accounting and anti-bribery provisions of the Foreign Corrupt Practices Act, according to the release from principal deputy assistant attorney general Marshall Miller of the U.S. Justice Department's Criminal Division.
Based on the plea bargain agreement, the executives of the subsidiary of HP in Russia built a slush fund of several million dollars where they took the money to bribe the Russian officials, CBS reports. In turn, the company was awarded by the Russian prosecutor general's office with a $45 million (35 million euro) contract.
The plea bargain was part of the agreement HP entered into in April. The fine given to the company amounted to $108 million to close the civil and criminal investigations into the company's payment of bribes to win contracts in Mexico, Poland and Russia, according to a statement released by the SEC.
Authorities have revealed that California-based Hewlett-Packard's Russian branch paid bribes worth over $2 million via agents and several shell companies and kept secret spreadsheets as well as two sets of books for tracking purposes. The FBI said that the Russian executives of HP have been involved in bribing officials in government for huge contracts for over a decade.
The company used bribes in the form of cash and gifts worth over $600,000 in Poland for the country's police agency contracts. In Mexico, the company paid commissions amounting to over $1 million to a consultant in order to win the software purchase of Pemex, a petroleum company owned by the state. Part of the money was sent to an official of the company. According to the SEC, HP is lacking internal controls and the bribes were recorded as official expenses and commissions.
The Russian bribes were paid out from 2000 to 2007, the Mexican bribes were given from 2008 to 2009 and the ones in Poland were paid from 2006 until 2010.
Executive Vice President and HP general counsel John Schultz released a statement saying that the misconduct detailed in the agreement with the court was carried out by a few employees who are now out of the company.
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