Hewlett-Packard agrees to $108 million fine for foreign bribes

Hewlett-Packard said Wednesday it will pay federal investigators a $108 million fine to resolve allegations that its subsidiaries bribed officials in Poland, Russia and Mexico to win business contracts.

The technology giant said the payment will be made to the U.S. Department of Justice and U.S. Securities and Exchange Commission, which had investigated the company for violating the Foreign Corrupt Practices Act.

“The misconduct described in the settlement was limited to a small number of people who are no longer employed by the company,” it said in a news release, quoting John Schultz, its executive vice president and general counsel. “HP fully cooperated with both the Department of Justice and the Securities and Exchange Commission in the investigation of these matters.”

In addition to paying the fine, HP said it “has agreed to undertake certain compliance, reporting and cooperation obligations.”

Details about the bribes were outlined in separate statements issued by the Securities and Exchange Commission and Justice Department.

The SEC said an HP subsidiary in Russia “paid more than $2 million through agents and various shell companies to a Russian government official to retain a multi-million dollar contract with the federal prosecutor’s office. In Poland, Hewlett-Packard’s subsidiary provided gifts and cash bribes worth more than $600,000 to a Polish government official to obtain contracts with the national police agency.”

“And as part of its bid to win a software sale to Mexico’s state-owned petroleum company,” the SEC added, “Hewlett-Packard’s subsidiary in Mexico paid more than $1 million in inflated commissions to a consultant with close ties to company officials, and money was funneled to one of those officials.”

“Hewlett-Packard subsidiaries 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,” said Deputy Assistant Attorney General Bruce Swartz in the Justice Department statement.

“Even as the tradecraft of corruption becomes more sophisticated,” Swartz added, “the department is staying a step ahead of those who choose to violate our laws, thanks to the diligent efforts of U.S. prosecutors and agents and our colleagues at the SEC, as well as the tremendous cooperation of our law enforcement partners in Germany, Poland and Mexico.”

Photo by Kristina Sangsahachart, Daily News

Steve Johnson Steve Johnson (288 Posts)

Steve Johnson covers the microchip industry, cyber security and the big-technology sector that includes Hewlett-Packard, Oracle and Cisco Systems.