updated 05:55 pm EDT, Thu April 15, 2010
HP may have bribed to get contract
An investigation is underway into allegations that HP may have bribed the Russian government to win a computer contract. German, Russian and now reportedly US officials are checking a claim that the PC builder sent the equivalent of $10.9 million to Russia's prosecutor general's office, through a German partner firm, to guarantee that it would get a lucrative deal supplying PCs. The bribe was allegedly elaborate masked and routed through shells in the US and locations as far away as Belize and the British Virgin Islands.
Sources for the WSJ claimed the US was getting involved as the accusations, if true, could violate the Foreign Corrupt Practices Act. The Justice Department would address any direct criminal lawbreaking while the Securities and Exchange Commission would handle the civil side of the case.
HP has acknowledged the basic investigation and said it's "fully cooperating" with both American and German officials, though it's understood that Russia's own investigators raided HP's local offices on Wednesday to look for evidence. Three had been arrested as far back as December but weren't charged with any crimes.
Any charges filed could be grave for both HP and for the PC industry. HP is the single largest PC maker in the world with one quarter of the market but is in fierce battles to fend off rapidly growing Acer as well as to keep Dell on the decline. The bribery if real would hint at bribery as a possible tactic to prevent competitors from landing deals, although it remains far from clear as to whether any illegal activities were conducted by a rogue or part of a larger campaign.