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HP Russia Bribed Officials for $35M Contract
San Francisco, CA – In a shocking case of corporate corruption, ZAO Hewlett-Packard A.O. (HP Russia), a subsidiary of California-based tech giant Hewlett-Packard Company (HP Co.), pleaded guilty to felony violations of the Foreign Corrupt Practices Act (FCPA) and was sentenced to pay a $58,772,250 fine.
According to court documents, HP Russia executives created a multimillion-dollar secret slush fund, which was used to bribe Russian government officials who awarded the company a contract valued at more than €35 million. The contract was for technology products with the Office of the Prosecutor General of the Russian Federation.
“In a brazen violation of the FCPA, Hewlett Packard’s Russia subsidiary used millions of dollars in bribes from a secret slush fund to secure a lucrative government contract,” said Principal Deputy Assistant Attorney General Marshall L. Miller. “Even more troubling was that the government contract up for sale was with Russia’s top prosecutor’s office. Tech companies, like all companies, must compete on a level playing field, not resort to secret books and sham transactions to hide millions of dollars in bribes.”
HP Russia pleaded guilty to conspiracy and substantive violations of the anti-bribery and accounting provisions of the FCPA. The plea agreement was made before U.S. District Judge D. Lowell Jensen of the Northern District of California.
U.S. Attorney Melinda Haag commended HP Russia for its cooperation during the investigation, saying, “HP’s cooperation during the investigation is what we expect of major corporate leaders facing the challenges of doing business around the world.”
The investigation was led by the FBI’s Washington Field Office and the Internal Revenue Service – Criminal Investigation (IRS-CI). “For more than a decade HP Russia business executives participated in an elaborate scheme that involved paying bribes to government officials in exchange for large contracts,” said FBI Assistant Director in Charge Andrew G. McCabe. “There is no place for bribery in any business model or corporate culture.”
IRS-CI Chief Richard Weber added, “HP Russia thought that they could play by a different set of rules than the rest of the international business community. Unfortunately, they are not alone. For other companies out there conducting business in this way, let the message be very clear—we will relentlessly follow the money trail.”
Key Facts
- State: California
- Category: Fraud & Financial Crimes|Public Corruption
- Source: DOJ Press Release ↗
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