US authorities join HP bribery investigation

Company cooperating as current and former officials are questioned over Russian deal

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Hewlett-Packard is cooperating with a U.S. Securities and Exchange Commission probe into allegations that the company bribed Russian officials in order to secure a 2003 computer contract.

On Wednesday, the company said that its Moscow offices had been raided, reportedly as part of a multimillion-dollar bribery investigation, spearheaded by German authorities. Thursday afternoon, HP confirmed that US authorities are now involved.

"HP has been in communication with the SEC and will continue to fully cooperate with the authorities investigating this matter," a company spokeswoman said via e-mail.

The investigation centres around the 2003 €35 million (US$47.8 million) sale of computer systems to the office of Russia's prosecutor general, coincidentally, the same office that investigates corruption cases in the country.

According to reports, German and Russian investigators are looking into charges that HP paid €8 million in bribes to secure the contract.

Even if a U.S. company commits bribery on foreign soil it is still illegal. The SEC can investigate bribery charges and bring civil actions against companies under the Foreign Corrupt Practices Act. But HP could be facing criminal charges, too. Those would be prosecuted by the U.S. Department of Justice.

The Wall Street Journal first reported news of the SEC investigation Thursday. According to its report, one current HP executive was arrested by German authorities in connection with the investigation last December. Two former executives were also arrested, but none of the three has been formally charged.

The alleged bribery occurred when former CEO Carly Fiorina was running the company. The HP board forced Fiorina out in 2005 over a series of issues related to the company's performance. Fiorina is currently a Republican candidate for the California U.S. Senate seat that has long been held by Democrat Barbara Boxer.

"This is an investigation of alleged conduct that occurred almost seven years ago, largely by employees no longer with HP. We are cooperating fully with the German and Russian authorities and will continue to conduct our own internal investigation," the HP spokeswoman said via e-mail on Wednesday.

FBI and SEC representatives did not return messages seeking comment for this story. A DOJ spokeswoman declined to comment on the matter.


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