SEC slaps HP with $108 MEEELION fine over bribe scandal
Company accused of bribing officials for contracts
HP has agreed to a $108m settlement with the US Securities and Exchange Commission (SEC) to settle charges that company representatives paid off government officials in order to obtain contract deals.
The SEC said that the settlement would end a case it had filed with the company alleging violations of the Foreign Corrupt Practices Act (FCPA) by HP subsidiaries in Russia, Poland and Mexico.
According to the SEC, HP subsidiaries in those three countries funneled millions of dollars to government officials in order to secure lucrative service deals and contracts. The company was said to have paid off a $2m package in Russia, a $1m payout in Mexico and $600,000 in Poland in order to secure government deals. The incidents are believed to have taken place between 2000 and 2010.
"Hewlett-Packard lacked the internal controls to stop a pattern of illegal payments to win business in Mexico and Eastern Europe. The company’s books and records reflected the payments as legitimate commissions and expenses," SEC chief of FCPA enforcement Kara Brockmeyer said.
"Companies have a fundamental obligation to ensure that their internal controls are both reasonably designed and appropriately implemented across their entire business operations, and they should take a hard look at the agents conducting business on their behalf."
Under the terms of its settlement, the SEC plans to collect a $74.2m fine from HP, along with an additional $5m in interest and $29m in disgorgement and forfeitures from the deals.
HP said that it has since cut ties with the offenders in its subsidiary operations and would be implementing additional compliance and reporting requirements.
"The misconduct described in the settlement was limited to a small number of people who are no longer employed by the company," executive vice president and general counsel John Schultz said in a company statement passed to El Reg.
"HP fully cooperated with both the Department of Justice and the Securities and Exchange Commission in the investigation of these matters and will continue to provide customers around the world with top quality products and services without interruption." ®
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