Hewlett-Packard agreed Wednesday to pay more than $108 million to settle FCPA charges brought by the DOJ and SEC.
The Palo Alto, California technology company is paying fines of $74.2 million to resolve the DOJ’s criminal case.
It’s paying $29 million in disgorgement, including $26.47 million to the SEC and $2.53 million to satisfy an IRS forfeiture as part of the criminal matter.
The disgorgement to the SEC is the 10th biggest FCPA disgorgement of all time.
With prejudgment interest of $5 million to the SEC, the total payment is just over $108 million.
In Russia, an H-P subsidiary paid more than $2 million through agents and various shell companies to a government official to keep a multi-million dollar contract with the federal prosecutor’s office, the SEC said.
The offenses occurred from 2000 to 2007. “Despite the red flags, the [Russia] deal went forward without any meaningful due diligence on the agent or the subcontractors,” the SEC said.
In Poland, Hewlett-Packard’s subsidiary gave gifts and cash bribes worth more than $600,000 to a government official to obtain contracts with the national police agency.
To win a software sale to Mexico’s state-owned oil and gas company, Pemex, Hewlett-Packard’s subsidiary paid more than $1 million in inflated commissions to a consultant with close ties to company officials, and money was funneled to one of those officials, the SEC said. The contract was worth $6 million.
“At least $125,000 was funneled to a government official at the state-owned petroleum company with whom the consultant had connections,” the SEC said. The money was referred to internally as an “influencer fee.”
In 2012, German prosecutors arrested three former Hewlett-Packard managers for paying €7.5 million ($10.3 million) in bribes in Russia. The Saxony chief prosecutor said a Finnish woman, an American man, and a German man were charged with bribery, breach of trust, and aiding in tax evasion.
On Wednesday, Polish prosecutors said a former government official identified as Andrzej M., and a former HP executive called Tomasz Z., were being charged with bribery. Their last names were withheld in accordance with Polish law.
A copy of the SEC’s April 9, 2014 press release is here.
The DOJ’s April 9, 2014 press release is here.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.