A judge last week ordered computer giant Hewlett-Packard to pay $58.8 million in fines for bribing Russian officials in Moscow to win a $45 million contract with the Office of the Prosecutor General of the Russian Federation.
US District Judge Lowell Jensen of the Northern District of California ordered the fine after ZAO Hewlett-Packard A.O. (HP Russia) pleaded guilty to violating anti-bribery and accounting provisions of the Foreign Corrupt Practices Act (FCPA).
According to the plea agreement, HP Russia executives created a multimillion dollar secret slush fund, of which more than $2 million were paid in bribes through agents and various shell companies. The events are said to have occurred from 2000 to 2007.
"Even more troubling was that the government contract up for sale was with Russia's top prosecutor's office", said principal deputy assistant attorney general Marshall Miller of the Justice Department's Criminal Division. "Tech companies, like all companies, must compete on a level playing field, not resort to secret books and sham transactions to hide millions of dollars in bribes".
The plea bargain came as part of an agreement HP reached in April to pay US regulators $108 million to settle a corruption scandal involving employees at subsidiaries in Russia, Poland, and Mexico.
In Poland, the company handed over cash, computers, as well as audio and video equipment worth more than $600,000 to the head of IT at the country's police headquarters, while in Mexico, the company paid around $1.4 million to win a software sale to the country's state owned oil and gas company Pemex.
"The misconduct described in the settlement was limited to a small number of people who are no longer employed by the company", said HP executive vice president and general counsel John Schultz, adding that the company "fully cooperated" with the government's investigation.