Hewlett-Packard Execs Busted in E-Rate Bribery Scandal
Washington, D.C. – In a shocking revelation, the U.S. government has settled two whistleblower lawsuits against Hewlett-Packard Co. (HP) for $16.25 million, alleging that the tech giant violated the competitive bidding rules of the Federal Communications Commission’s (FCC) E-Rate Program at the Dallas and Houston Independent School Districts.
The E-Rate program, created by Congress in the Telecommunications Act of 1996, provides funding for needy schools and libraries to connect to and utilize the Internet. The FCC oversees the E-Rate program, which is funded by monies collected from telephone users.
The two lawsuits were filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the United States and share in any recovery. The first lawsuit was filed in Dallas by Dan Cain and Pamela Tingley, while the second lawsuit was filed in Houston by Dave Richardson and Dave Gillis.
According to the lawsuits, the defendants provided illegal gratuities and inducements to school officials, including the use of several yachts and tickets to sporting events, including the 2004 Super Bowl, while the companies were bidding on school district contracts funded by the E-Rate Program. From the settlement with HP announced today, relators Cain and Tingley will receive $1,424,969, while Richardson and Gillis will receive $796,280.
The U.S. government has elected to intervene in both lawsuits, under the authority of the False Claims Act, which allows the government to intervene in and take over any whistleblower action filed. The U.S. notices of intervention stated that the United States expects to file its own complaint in each case within 45 days.
“The E-Rate Program provides much-needed funding that allows underprivileged students to access the Internet,” said Tony West, Assistant Attorney General for the Civil Division. “We will continue to pursue those who use improper inducements to undermine the integrity of this important program.”
In related news, both Wong and Bohuchot, former executives of MSE and the Dallas Independent School District, were found guilty of bribery in U.S. District Court in Dallas in 2008 and sentenced to more than 10 years in prison. The United States previously settled related claims against the Dallas and Houston Independent School Districts for payments of $750,000 and $850,000 respectively.
The cases are U.S. ex rel. Cain v. Micro Systems Enterprises et al., No. 3-05CV1843-P (N.D. Tex.) and U.S. ex rel. Richardson v. Analytical Comp. Services et. al., Civ. No. H-05-3836 (S.D. Tex.).
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