Monday, April 19, 2010

Possible Bribes in Russia by HP in Germany

Raids took place last week in Russia and Germany on HP offices and by Russian Prosecutors.

If there is anything more frightening then 60 Minutes at the front door, its a group of Russian prosecutors.

The investigation revolves around suspected bribes, occurring seven years ago.
German investigators are looking into possible corruption linked to a $47 million sale of computers to Russia. They are examining whether the company paid bribes to win the contract, Wolfgang Klein, a spokesman at Saxony’s Chief Prosecutor’s Office, said.

Under the lamp, nine people are being investigated for breach of trust.

Apparently, the suspects may have set up a system of sham companies and contracts, leading to 8 million euros ($10.8 million) in improper payments.

“It is unclear where these 8 million euros went,” Klein said from Dresden. “I don’t want to use the word bribes to say what they were used for, but we’re looking into that.”

Resonating here at Home -

"Even if senior management doesn't know about it, that doesn't give the company a pass," said John Davis, an FCPA expert at the Miller Chevalier law firm in Washington, D.C.

In the current political climate, a linkage between these possible bribes and former CEO Carly Fiorina’s run for the GOP nomination for the U.S. Senate seat now held by Democrat Barbara Boxer, is being bantered about.

From Rich Smith, at the Motley Fool,

"...Tempest in a Russian tea glass

Here's a quick rundown of the allegations against HP. Back in 2003, Russia's Prosecutor General's office put up for bid a contract for sophisticated computer equipment. HP won the $48 million deal, but in order to do so, it allegedly had to pay out $11 million in bribes, parceled out through bills for nonexistent services, and paid to middlemen through an extended series of shell companies ranging from Belize to Latvia to Switzerland..."

Go over to his article here, he does a pretty good job summarizing and explaining.

More here.

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