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Richard L. Cassin Publisher and Editor

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Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

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Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

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FCPA Blog Daily News

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Wednesday
Apr092014

H-P in $108 million settlement for Mexico, Russia, Poland bribes

Hewlett-Packard agreed Wednesday to pay more than $108 million to settle FCPA charges brought by the DOJ and SEC.

The Palo Alto, California technology company is paying fines of $74.2 million to resolve the DOJ's criminal case. 

It's paying $29 million in disgorgement, including $26.47 million to the SEC and $2.53 million to satisfy an IRS forfeiture as part of the criminal matter. 

The disgorgement to the SEC is the 10th biggest FCPA disgorgement of all time.

With prejudgment interest of $5 million to the SEC, the total payment is just over $108 million.

In Russia, an H-P subsidiary paid more than $2 million through agents and various shell companies to a government official to keep a multi-million dollar contract with the federal prosecutor’s office, the SEC said. 

The offenses occurred from 2000 to 2007. "Despite the red flags, the [Russia] deal went forward without any meaningful due diligence on the agent or the subcontractors," the SEC said.

In Poland, Hewlett-Packard’s subsidiary gave gifts and cash bribes worth more than $600,000 to a government official to obtain contracts with the national police agency.

To win a software sale to Mexico’s state-owned oil and gas company, Pemex, Hewlett-Packard’s subsidiary paid more than $1 million in inflated commissions to a consultant with close ties to company officials, and money was funneled to one of those officials, the SEC said. The contract was worth $6 million.

"At least $125,000 was funneled to a government official at the state-owned petroleum company with whom the consultant had connections," the SEC said. The money was referred to internally as an "influencer fee."

In 2012, German prosecutors arrested three former Hewlett-Packard managers for paying €7.5 million ($10.3 million) in bribes in Russia. The Saxony chief prosecutor said a Finnish woman, an American man, and a German man were charged with bribery, breach of trust, and aiding in tax evasion.

On Wednesday, Polish prosecutors said a former government official identified as Andrzej M., and a former HP executive called Tomasz Z., were being charged with bribery. Their last names were withheld in accordance with Polish law.

A copy of the SEC's April 9, 2014 press release is here.

The DOJ's April 9, 2014 press release is here.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.