Report: Microsoft Bribe Investigation Extends to Russia, Pakistan

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Published August 22, 2013

| FOXBusiness

The U.S. investigation into allegations that Microsoft (MSFT) business partners bribed foreign government officials for contracts also includes activity in Russia and Pakistan, according to The Wall Street Journal.

Earlier reports indicated that lawyers from the Securities and Exchange Commission and the Department of Justice were conducting a preliminary investigation into kickback allegations made by a former Microsoft representative in China. The company’s relationships with resellers and consultants in Romania and Italy were also part of the probe.

The Journal cited people familiar with the matter as saying an anonymous tipster in Russia told Microsoft that resellers of its software allegedly sent kickbacks to executives of a state-owned telecommunications company to win a contract.

In Pakistan, a tipster claimed that executives at Microsoft’s Pakistan operations paid for a trip for a government official and his wife in exchange for a contract that would supply the government with Microsoft Office software.

The Journal also reviewed documents pertaining to the allegations.

All three tipsters contacted Microsoft directly in the last eight months, the report said.

Investigations by the government can end with no charges being filed. In the Microsoft case, the government hasn’t accused the company or any of its business partners of wrongdoing.

John Frank, Microsoft’s vice president and deputy general counsel, said in a statement that the company fully investigates allegations of potential misconduct.

“We also invest heavily in proactive training, monitoring and audits to ensure our business operations around the world meet the highest legal and ethical standards,” Frank said, adding that Microsoft cooperates fully in any government inquiries.

In a blog post, Frank noted that Microsoft has more than 50 people who investigate potential breaches of company policy and another 120 people whose primary role is compliance.

“This is a reflection of the size and complexity of our business, and the seriousness with which we take meeting our obligations,” he wrote.

The investigation into Microsoft’s business partners is one of dozens being conducted under the Foreign Corrupt Practices Act, which prohibits U.S. companies and companies that trade on U.S. stock exchanges from paying bribes to foreign officials.

The SEC whistleblower program that was established in 2010 with the passage of Dodd-Frank provides cash incentives for employee tipsters.

Microsoft shares jumped 2.3% Thursday morning after getting an upgrade from Nomura analysts.

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http://www.foxbusiness.com/technology/2013/08/22/report-microsoft-bribe-investigation-extends-to-russia-pakistan/