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Microsoft confirms DOJ, SEC investigations

Microsoft Corporation on Tuesday responded to a Wall Street Journal report that the DOJ and SEC are investigating a whistleblower complaint about alleged bribes by business partners to officials in Italy, Romania, and China. 

The investigations were reported by Chris Matthews at the Wall Street Journal.

Microsoft is generally known for its robust compliance program.

But it said Tuesday in a statement apparently acknowledging the investigations that with 98,000 people and 640,000 partners operating in 112 countries, ‘it isn’t possible to say there will never be wrongdoing.’

The Wall Street Journal said the investigations are still preliminary and the government hasn’t accused Microsoft or any of its business associates of wrongdoing.

‘Like other large companies with operations around the world,’ Microsoft said, ‘we sometimes receive allegations about potential misconduct by employees or business partners, and we investigate them fully, regardless of the source.’

Microsoft said the ‘matters raised in the Wall Street Journal are important, and it is appropriate that both Microsoft and the government review them.’

In an email to the FCPA Blog referring to the headline on this post, a public relations firm representing Microsoft said, ‘Microsoft did not confirm whether these investigations are actually taking place.’

                                                        *     *     *

Here’s Microsoft’s full statement posted Tuesday on its website in response to the Wall Street Journal story:

Our Commitment to Compliance
19 Mar 2013 10:33 AM
Posted by John Frank
Vice President & Deputy General Counsel, Microsoft

Today, the Wall Street Journal reported that the U.S. government is reviewing allegations that Microsoft business partners in three countries may have engaged in illegal activity, and if they did, whether Microsoft played any role in these alleged incidents.

We take all allegations brought to our attention seriously, and we cooperate fully in any government inquiries. Like other large companies with operations around the world, we sometimes receive allegations about potential misconduct by employees or business partners, and we investigate them fully, regardless of the source. We also invest heavily in proactive training, compliance systems, monitoring and audits to ensure our business operations around the world meet the highest legal and ethical standards.

The matters raised in the Wall Street Journal are important, and it is appropriate that both Microsoft and the government review them. It is also important to remember that it is not unusual for such reviews to find that an allegation was without merit. (The WSJ reported earlier this week that an allegation has been made against the WSJ itself, and that, after a thorough investigation, its lawyers have been unable to determine that there was any wrongdoing).

We cannot comment about on-going inquiries, but we would like to share some perspective on our approach to compliance.

We are a global company with operations in 112 countries, nearly 98,000 employees and 640,000 business partners. We’re proud of the role we play in bringing technology to businesses, governments, non-profits and consumers around the world and the economic impact we have in local communities.

As our company has grown and expanded around the world, one of the things that has been constant has been our commitment to the highest legal and ethical standards wherever we do business.

Compliance is the job of every employee at the company, but we also have a group of professionals focused directly on ensuring compliance. We have more than 50 people whose primary role is investigating potential breaches of company policy, and an additional 120 people whose primary role is compliance. In addition, we sometimes retain outside law firms to conduct or assist with investigations. This is a reflection of the size and complexity of our business and the seriousness with which we take meeting our obligations.

We also invest in proactive measures including annual training programs for every employee, regular internal audits and multiple levels of approval for contracting and expenditure.

In a company of our size, allegations of this nature will be made from time to time. It is also possible there will sometimes be individual employees or business partners who violate our policies and break the law. In a community of 98,000 people and 640,000 partners, it isn’t possible to say there will never be wrongdoing. Our responsibility is to take steps to train our employees, and to build systems to prevent and detect violations, and when we receive allegations, to investigate them fully and take appropriate action. We take that responsibility seriously.

Microsoft’s response is posted here.

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1 Comment

  1. This is a very interesting situation for Microsoft. What it will develop into, I don't know, but regardless, it demonstrates that even just an accusation can have a damaging effect on a business regardless of whether it is even actually involved in any wrong doing.

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