HP Faces Bribery Probe In Russia and Germany

Authorities in both Germany and Russia are investigating allegations that executives at Hewlett-Packard paid millions of dollars in bribes in order to secure an IT contract in Russia.

Germany Asks For Russian Raid

Prosecutors in the eastern German city of Dresden apparently sought the assistance of their Russian counterparts in order to search HP’s offices in Moscow, so that documents could be seized relating to suspicions that around 8 million euros ($10.9 million) in bribes was paid to win a contract, according to Reuters and other news outlets.

“The case came to light here,” a spokesman for the prosecutors’ office in Dresden told the news agency. “The suspicion is that 8 million euros (£7 million) in kickback payments were made.”

Reuters said the case began after investigators became suspicious after an audit of a small company in the eastern German state of Saxony, which turned up money transfers that seemed to produce nothing real in return.

This led to what the spokesman called an international network of money transfers and prompted German officials to search HP premises in the southern town of Boeblingen and in Munich in early December.

The HP contract was to supply computers and software for criminal prosecutors in Moscow back in 2000, a contract thought to worth 35 million euros (£31 million). The contract was concluded in 2007.

HP is not the only IT company facing these types of charges. Chip giant Intel was accused of “bribery and coercion” in an anti-trust suit filed in November last year by New York’s Attorney General’s office.

Under Investigation

Nine suspects, including former staff of HP, have been identified, according to Reuters. They are under investigation for possible breach of trust, tax evasion and bribery of foreign officials.

HP has confirmed that a probe is under way, but insisted the actions were of staff who were no longer at the company.

“This is an investigation of alleged conduct that occurred almost seven years ago, largely by employees no longer with HP,” the company said in a statement.

“We are co-operating fully with the German and Russian authorities and will continue to conduct our own internal investigation.”