Another Significant Foreign Corrupt Practice Act Settlement
By: Kevin E. Raphael
Hewlett-Packard Co. (“HP”) reached a $108 million settlement of federal civil and criminal investigations, focused on whether HP violated the Foreign Corrupt Practices Act by bribing government officials in Russia, Poland and Mexico. The $108 million settlement included $29 million disgorged to the SEC and IRS, $74.2 million in fines related to the criminal investigation, and $5 million in interest to the SEC. The government focused intensively on HP’s failure to create and maintain internal controls to insure illicit payments did not occur, and certain HP supervisors ignored significant warning signs that illicit conduct might be occurring.
HP employees are alleged to have paid $3.6 million in cash and gifts to government officials in Russia, Poland and Mexico, in order to obtain or keep public contacts for IT services or computer hardware in those countries. This matter is yet another compelling indication that FCPA investigations are becoming increasingly prevalent, and businesses that conduct commerce in global markets must insure that they have internal processes and controls in place to prevent, or catch, employees who otherwise seek to pay bribes in violation of the FCPA.