A Hewlett-Packard (HP) subsidiary in Russia was fined $58 million Thursday for bribing government officials in the country.
The company pleaded guilty in front of the California court for violating the US anti-bribery and accounting laws and was sentenced for bribery. The Justice Department said HP Russia created slush funds and allegedly bribed officials with $2 million to secure a technology contract amounting to more than $45 million with the Office of the Prosecutor General of the Russian Federation.
The $58 million dollars is part of HP's agreed total settlement of $108 million dollars in criminal and regulatory penalties. The company is also guilty for bribing cases in Mexico and Poland. HP Poland bribed officials to secure a contract with the national police agency, while HP Mexico bribed for a contract with the state-owned petroleum company. An HP representative said in April that the crime was committed by a small number of former employees.
The technology giant has already paid $31.5 million for disgorgement, prejudgment interest, and civil penalties. According to the final judgment in April, the company will pay a total of $76.8 million in criminal penalties and forfeiture.
"In a brazen violation of the FCPA, Hewlett Packard's Russian subsidiary used millions of dollars in bribes from a secret slush fund to secure a lucrative government contract. Even more troubling was that the government contract up for sale was with Russia's top prosecutor's office," said Marshall L. Miller, the Principal Deputy Assistant Attorney General.
Miller said that the Criminal Division focus on the case because when an American company commits corruption in international market, other companies and the rules of law are negatively affected.
According to the statement of facts filed with the plea agreement, the slush fund proceeds were spent on luxury cars, travel services, expensive clothes and jewelry, and other valuabale items.
Hewlett-Packard has refused to comment on the issue.
