U.S. steps up kickback probe of Hewlett-Packard

By Associated Press
Posted Dec. 17, 2010 at 10:24 a.m.

The U.S. Justice Department and the Securities and Exchange Commission are expanding their probe into possible kickbacks on the part of computer maker Hewlett Packard Co., a regulatory filing said.

The agencies have been investigating the Palo Alto, Calif., company for possibly bribing authorities in Russia and Germany. Now, the agencies are also investigating similar improprieties in Austria, Serbia, the Netherlands and the Commonwealth of Independent States.

According to this round of allegations, local HP employees may have paid kickbacks to government officials, private organizations and channel partners who distributed HP’s products. The bribes are said to date back 10 years.

In September, the agencies joined German authorities in investigating possible bribery, embezzlement and tax evasion related to a transaction between Hewlett-Packard ISE GmbH, a former HP subsidiary in Germany, and the chief public prosecutor’s office of the Russian Federation. That subsidiary allegedly paid $46.43 million in kickbacks between 2001 and 2006.

No charges have been filed. But if HP is ever found guilty of violating the Foreign Corrupt Practices Act, it faces civil penalties of $500,000 per bribe and criminal penalties in excess of $2 million.

HP said it is cooperating with the investigations.

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