HP Involved in Multi-Million Euro Russian Bribery Scandal

Even though a company getting sued is common in the IT industry, recently, it seemed as though things were calming down as antitrust lawsuits got settled and old enemies ended their feuds. Unfortunately, the world doesn't look like it will stop needing courts any time soon, especially now that Hewlett-Packard has been linked to a multi-million bribery that sparked a veritable scandal in Russia.

Earlier last week, HP's office in Moscow was reportedly raided, according to The Wall Street Journal, by Russian authorities, in their search for evidence linking it to said bribery. The accusation, according to prosecutors in Germany, is that, in order to score a 35 million Euro contract in 2003, which was meant to provide the Russian prosecutor general's office with a new "state-of-the-art computer system," HP paid bribes totaling 8 million Euro. Coincidentally, this is the same office that investigates corruption in the country.

HP claims, according to the report, that they only became aware of the investigation in December, when they received the first warrants from the German and Swiss authorities. This, however, hasn't stopped German authorities from trying to find out whether or not HP executives pushed said bribes, and if they did it through smaller companies in different locations worldwide. Not only that but, on Thursday, HP confirmed that US authorities had also become involved in the legal action.

"HP has been in communication with the SEC and will continue to fully cooperate with the authorities investigating this matter," a company spokeswoman 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.”

The SEC can investigate bribery charges, even if the illegal activities were accomplished on foreign soil, and can bring civil actions under the Foreign Corrupt Practices Act. In case HP is also faced with criminal charges, it will have to deal with another lawsuit, this time prosecuted by the U.S. Department of Justice.

The alleged bribery took place during the time of former HP CEO Carly Fiorina, who was forced out in 2005 over company performance issues. At present, Fiorina is a Republican candidate for the California U.S. Senate seat.