Corruption

This from a Globe and Mail article today:

Hewlett-Packard Co., one of the leading technology suppliers to the Canadian government, is facing a possible 10-year ban on selling products and services to Ottawa in the wake of a high-profile U.S. bribery conviction.

The recent criminal conviction, involving bribes paid to Russian government officials, marks the first major test of strict new Canadian integrity rules quietly introduced in March by Public Works and Government Services.

The details were a bit sketchy in the Globe. The Foreign Corrupt Practices Act blog covered a lot more ground in their report:

Hewlett-Packard agreed Wednesday to pay more than $108 million to settle FCPA charges brought by the DOJ and SEC.

The Palo Alto, California technology company is paying fines of $74.2 million to resolve the DOJ’s criminal case.

It’s paying $29 million in disgorgement, including $26.47 million to the SEC and $2.53 million to satisfy an IRS forfeiture as part of the criminal matter.

The disgorgement to the SEC is the 10th biggest FCPA disgorgement of all time.

With prejudgment interest of $5 million to the SEC, the total payment is just over $108 million.

Clearly not a trivial case. And it seems to take a lot of money to secure a contract in Russia:

In Russia, an H-P subsidiary paid more than $2 million through agents and various shell companies to a government official to keep a multi-million dollar contract with the federal prosecutor”™s office, the SEC said.

HP’s behaviour was not new.

The offenses occurred from 2000 to 2007. “Despite the red flags, the [Russia] deal went forward without any meaningful due diligence on the agent or the subcontractors,” the SEC said.

Here is what happened in Poland and Mexico:

In Poland, Hewlett-Packard”™s subsidiary gave gifts and cash bribes worth more than $600,000 to a government official to obtain contracts with the national police agency.

To win a software sale to Mexico”™s state-owned oil and gas company, Pemex, Hewlett-Packard”™s subsidiary 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, the SEC said. The contract was worth $6 million.

Certain geographies are clearly more challenging in terms of how to win business. Remarkable that certain individuals can secure so much money from influencing a deal.

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