H-P Pays $108M to DOJ, SEC Over Anti-Bribery Allegations

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Published April 09, 2014

| FOXBusiness

Hewlett-Packard (HPQ) agreed to pay $108 million to settle federal claims that it violated the U.S. Foreign Corrupt Practices Act, marking yet another major settlement as the government cracks down on bribery.

The government alleges H-P violated FCPA when its subsidiaries in Poland, Mexico and Russia made improper payments to government officials to obtain or retain public contracts.

The PC maker agreed to pay $108 million to the U.S. Securities and Exchange Commission and Dept. of Justice, and undertake certain compliance, reporting and cooperation obligations.

"The misconduct described in the settlement was limited to a small number of people who are no longer employed by the company," H-P general counsel John Schultz said in a statement.

Shares of H-P were up 0.49% to $32.61 in recent trade.

In Russia, the SEC says the subsidiary paid more than $2 million through agents and various shell companies from 2000 to 2007 to maintain a multi-million-dollar contract with the federal prosecutor’s office.

In Poland, an H-P company allegedly provided gifts and cash bribes worth more than $600,000 to a Polish government official from 2006 to 2010 to obtain contracts with the national police agency.

The computer company also allegedly paid a consultant with close ties to Mexico’s state-owned petroleum company more than $1 million in inflated commissions – some of which was funneled to one of those officials – in a bid to win a software sale valued at $6 million.

“Hewlett-Packard lacked the internal controls to stop a pattern of illegal payments to win business in Mexico and Eastern Europe,” said Kara Brockmeyer, chief of the SEC Enforcement Division’s FCPA Unit.  “Companies have a fundamental obligation to ensure that their internal controls are both reasonably designed and appropriately implemented across their entire business operations.”

The anti-bribery campaign has been in full force over the last year, spurring a number of multi-million-dollar settlements among some major U.S. companies operating outside of domestic borders.

In January, Alcoa (AA) agreed to pay $384 million to settle an FCPA probe after the government alleged the aluminum maker’s subsidiaries paid bribes to government officials in Bahrain. Last May, French oil giant Total (SA) agreed to a $398 million settlement.

"Enforcement of the Foreign Corrupt Practices Act continues to be a high priority area for the SEC," the agency says. 

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http://www.foxbusiness.com/industries/2014/04/09/h-p-in-108m-settlement-with-doj-over-foreign-practices/