A U.S. court has fined Hewlett-Packard for $58.8 million after the company admitted to have bribed government officials in Moscow to acquire a lucrative contract with the office of Russia's prosecutor general.
Northern California U.S. District Judge Lowell Jensen placed the fine after HP pleaded guilty to a violation of the anti-bribery and accounting provisions of the Foreign Corrupt Practices Act.
According to HP's negotiated plea bargain, a multi-million-dollar slush fund was created by executives of ZAO Hewlett-Packard A.O., a Russian subsidiary of HP. The fund is where the money that was used to bribe the Russian officials came from.
After the receiving the bribe, the corrupt Russian officials awarded HP with a $45 million agreement with the office of Russia's prosecutor general.
"Hewlett Packard's Russia subsidiary used millions of dollars in bribes from a secret slush fund to secure a lucrative government contract," said Marshall Miller, principal deputy assistant attorney of the United States Justice Department's Criminal Division.
"Even more troubling was that the government contract up for sale was with Russia's top prosecutor's office," Miller added.
Authorities reported that HP's Russian subsidiary paid over $2 million worth of bribes to officials through agents and several shell companies, with the company utilizing two sets of books and spreadsheets to monitor the illegal affairs.
The negotiated plea bargain was part of an agreement made by HP back in April for a payment of $108 million in settlement of investigations that the company used bribery to acquire public contracts in Mexico, Poland and Russia.
According to the United States Securities and Exchange Commission, the settlement by HP covers both civil and criminal investigations made under the Foreign Corrupt Practices Act.
In Poland, Hewlett-Packard Polska, Sp. Z o.o. reportedly sent gifts and money worth over $600,000 as bribes to a government official to acquire contracts with the country's police force.
In Mexico, Hewlett-Packard Mexico, S. de R.L. de CV. allegedly paid over $1 million as commission to a consultant to acquire a software sale contact to Pemex, a state-owned petroleum firm, with some of the money transferred to an official of Pemex.
The three subsidiaries of HP will pay $76.8 million in total for criminal penalties and forfeiture, while HP will pay another $31.5 million for disgorgement, prejudgment interest and civil penalties.
Miller also said that the conviction and sentencing of HP are vital steps in the division's efforts to penalize companies that are corrupting the global marketplace.