Fast Company

HP Executives Under Investigation for Russian Bribery Charges

HPHP is currently under investigation by both Russian and German authorities for bribery. Allegedly, HP paid a bribe of about $10.9 million to the Russian office of the prosecutor general to ensure a $47.8 million contract. The Germans involved themselves due to the suggestion that the equipment was sold through one of HP's German subsidiaries.

The office of the prosecutor general is assigned criminal prosecution in Russia, and the Wall Street Journal is quick to point out that many of those cases are, most deliciously, corruption cases. According to HP's contract with Russia, that $47.8 million bought mostly computer equipment designed for security purposes, including desktops, laptops, servers, and workstations.

HP's Moscow office was raided on Wednesday by Russian investigators looking for any documentation of the bribery. They're working in concert with the Germans, who are trying to figure out exactly how the money was laundered. So far it looks like it was funneled through bank accounts and shell companies in Britain, Austria, Switzerland, the British Virgin Islands, Belize, New Zealand, Latvia, Lithuania, and even the States, in Delaware and Wyoming.

But even without the well-known money laundering hot spots of Delaware and Wyoming being involved (wait, what?), the U.S. Securities and Exchange Commission might have to get involved, since HP is an American company. According to the WSJ, "The Foreign Corrupt Practice Act prohibits U.S. companies from paying bribes to foreign officials. The SEC also requires public companies to disclose important investigations in their filings with the agency." HP has not disclosed the current Russian and German investigations, which they evidently don't consider "important" enough to be filed with the SEC.

It's looking like a very tough case--nobody has yet figured out exactly to whom and from where that money might have gone, and German law stipulates that corporations (like HP) cannot be sued, only individuals.

HP, for its part, said in a statement:

"This is an investigation of alleged conduct that occurred almost seven years ago, largely by employees no longer with HP. We are cooperating fully with the German and Russian authorities and will continue to conduct our own internal investigation."

It's the kind of case that'll likely be very long and drawn out, given its complexity and the fact that several different countries are involved. We'll keep you updated on any major developments.

Add New Comment

0 Comments