HP Reaches $108M Settlement With DOJ, SEC

Hewlett-Packard has reached a $108 million settlement with the Justice Department and the SEC, which also includes reporting, cooperation and compliance obligations, thereby ending an investigation into alleged violations of the Foreign Corrupt Practices Act. The investigation had been examining HP’s dealings in Russia, as well as Poland, where HP is accused of paying more than $500,000 in bribes to help win contracts. “The misconduct described in the settlement was limited to a small number of people who are no longer employed by the company,” said John Schultz, executive vice president and general counsel for HP,  in an April 9 filing with the SEC. “HP fully cooperated with both the Department of Justice and the Securities and Exchange Commission in the investigation of these matters.”

Update [April 10]: Justice Department filings reveal more details of the web of lavish spending that led to overseas bribery charges. Detailed by the Wall Street Journal, the filings reveal employees using myriad bank accounts and shell companies to spend lavishly, or even deliver bags of cash to government officials and others.

In Russia, where the illegal activity went on from 2000 to 2007, H-P’s money was spent on travel, cars, jewelry, clothing, expensive watches, furniture, household appliances and “swimming pool technology,” the Justice Department said.

In one case, a Bosnian account of a company registered in the British Virgin Islands paid a nearly €108,000 hotel bill for a company owned by a family member of an unnamed senior Russian government official.

In Poland, the activity by H-P subsidiary occurred roughly between 2006 and 2010, the government agencies stated. The goal was to secure and maintain millions of dollars with the Polish National Police agency.

An unnamed executive in H-P’s Polish unit repeatedly delivered bags of cash to an unnamed information-technology director of the agency–described mainly in court documents as “Polish Official,” sometimes at the recipient’s house and sometimes in a Warsaw parking lot.