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Hewlett-Packard Settles SEC and DOJ Bribery Charges for $108 Million

Hewlett-Packard (NYSE: HPQ) agreed to pay $108 million to settle civil and criminal cases brought by the Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ).

The charges stem from alleged bribes made by subsidiaries to public officials in three countries in order to obtain profitable contracts in violation of the Foreign Corrupt Practices Act (FCPA).  Specifically, Hewlett-Packard subsidiaries attempted to improperly obtain public contracts by directing its:

  • Russian subsidiary to pay more than $2 million to Russian officials,
  • Subsidiary in Poland to pay government officials more than $600,000, and
  • Mexican subsidiary to overpay commissions by more than $1 million to consultant associated with officials.

“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,” said Kara Brockmeyer, chief of the SEC Enforcement Division’s FCPA Unit.  “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.”

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