HP has copped to felony bribery and money laundering charges.
The charges themselves, listed below, are as thrilling as anything you’d binge-watch on Netflix on a Thursday night.
The Menlo Park, Calif., tech stalwarts are $108 million poorer after settling with the U.S. Department of Justice and the Security and Exchange Commission for violating terms of the Foreign Corrupt Practices Act, a tacit admission to the felony charges.
The DOJ accused HP Russia of bribery, and instead of fighting the federal charges, the company paid serious money to settle.
HP subsidiaries in Poland and Mexico were also accused by DOJ of the same thing, and the fine encompasses those cases, as well, in criminal and regulatory penalties, according to the feds.
Not the kind of news HP chief Meg Whitman likes to hear about in her Valley home while drinking coffee first thing in the morning.
HP is officially saying little. A spokesperson referred my questions to a short, three-paragraph statement that did its best to minimize the fallout.
Here’s a portion of the statement, attributed to the company’s PR team and posted to its website:
“The misconduct described in the settlement was limited to a small number of people who are no longer employed by the company,” said John Schultz, executive vice president and general counsel, HP.The DOJ press release provided much more detail. And some of its downright hardcore. According to DOJ:
“HP fully cooperated with both the Department of Justice and the Securities and Exchange Commission in the investigation of these matters and will continue to provide customers around the world with top quality products and services without interruption.”
“A criminal information filed today in U.S. District Court for the Northern District of California charges HP Russia with conspiracy and substantive violations of the anti-bribery and accounting provisions of the FCPA. In addition, the government is entering into criminal resolutions with HP subsidiaries in Poland and Mexico relating to contracts with Poland’s national police agency and Mexico’s state-owned petroleum company, respectively.”
The charges stem from a federal multiagency investigation including the FBI and the SEC’s investigative arm, among others. Polish, German and Mexican prosecutors also assisted in the investigation.
The DOJ’s press release also included these details:
“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 Swartz.
“Even as the tradecraft of corruption becomes more sophisticated, 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.”
First came printers. Then HP mainframes. And now scandal.
Ouch.
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