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Oracle's Africa dealings under FBI, SEC, DoJ investigation

Ellison's firm up to its neck in the alphabet soup

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Oracle is reported to be under investigation by the US authorities for breaking federal anti-bribery laws in Africa.

The FBI field office in Washington, fraud prosecutors in the Justice Department's criminal division, and attorneys for the Securities and Exchange Commission (SEC) are reported to be looking into sales of Oracle databases and applications in unnamed Western and Central African countries.

The agencies are examining if Oracle employees or people acting on behalf of the database giant made improper payments to secure deals in the countries, The Wall St Journal said.

Under the Foreign Corrupt Practices Act, US companies and staff are not allowed to offer bribes to officials representing foreign governments or employees of state-owned companies.

The Wall St Journal does not name its source for the story and Oracle would not comment when contacted by The Reg.

Oracle has been in hot water in the past with the US authorities and politicians.

The DoJ last year took Oracle to court alleging Larry Ellison's software giant had defrauded the US government of hundreds of billions of dollars between 1998 and 2006.

Oracle had been obliged under contract with the US General Services Administration to tell the body when commercial discounts on software had improved and to extend them to government customers. The DoJ said Oracle had misrepresented its true commercial sales practices – meaning government customers received deals on worse terms than customers in the private sector.

Meanwhile, in 2002, state legislators in California investigated a $95m Oracle database contract that had been awarded without other bidders being considered and which saw the state paying for at least $6m in unused Oracle software licences.

Among the fallout from this California database investigation was the end to no-bid contracts on deals worth more than $100,000.

The US government, though, has also proved a valuable friend to Oracle in the past. Colleagues of the DoJ's criminal investigation unit in the antitrust division in 2009 were hard at work lobbying European regulators to let Oracle's purchase of Sun Microsystems sail through.

According to the latest WikiLeaks disclosures, European Commission regulators were concerned that Oracle would hamper development of MySQL, owned by Sun, should the deal proceed. The DoJ's antitrust division had approved Oracle's $7.4bn purchase in August 2009 but concerns lingered inside the European Union: Oracle president Safra Catz met with European Union Competition Commissioner Neelie Kroes in October that year and with the US mission to "push for rapid European Commission approval of the merger."

According to the leaked DoJ cable, the DoJ's antitrust unit saw a successful completion of talks between Oracle and EU as a "high priority".

"Its senior officials and investigative staff are currently engaging productively and intensely with their DG COMP counterparts, and are in close touch with Oracle and Sun, in the hopes of preventing a divergent outcome," the leaked cable says. ®

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