Hewlett-Packard Pleads Guilty To Bribing Officials in Russia, Poland, and Mexico 110
Charliemopps writes Hewlett-Packard and three subsidiaries pleaded guilty Thursday to paying bribes to foreign officials in Russia, Mexico and Poland and agreed to pay $108 million in criminal and regulatory penalties. For over 10 years Hewlett-Packard kept 2 sets of books to track slush-funds they used to bribe government officials for favorable contracts.
From the article:
According to the Justice Department, HP Poland paid more than $600,000 in cash bribes and gifts, travel and entertainment to the the police agency's director of information and communications technology. HP Poland gave the government official bags filled with hundreds of thousands of dollars of cash, provided the official with HP desktop and laptop computers, mobile devices and other products and took the official on a leisure trip to Las Vegas, which included a private tour flight over the Grand Canyon, the Justice Department said.
The foreign officials probably weren't reporting the income on their taxes, either.
best to do the time in Poland (Score:2)
best to do the time in Poland the other places are shit.
Re:best to do the time in Poland (Score:5, Insightful)
Re:best to do the time in Poland (Score:5, Insightful)
What "Time"? These are Corporate Executives. When they break the law their company pays cash. Jail is the legal system for people who dont have enough money to pay Government Fines.
Sooo.... They will pay a bribe to settle charges of bribery?
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We dispense the finest justice that money can buy!
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Who do they think they are? Bernie Ecclestone?
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Yep, they should call this The Ecclestone Maneuver.
Re: best to do the time in Poland (Score:4, Informative)
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We don't pay any of these at all and we do business in 160 countries.
Bribery (including 'campaign donations' in the USA) is a risky tactic. Immediately, you get easier access to do whatever it was you were trying to do. However, it leads to a list of no-win situations that are likely to follow depending on factors completely outside your control, a few examples.
1) The bribed official is replaced, then you must either bribe the current position-holder a convincing amount or face increased scrutiny. (In the USA balance of campaign contributions, you can get away with donati
Re: best to do the time in Poland (Score:4, Informative)
Re: best to do the time in Poland (Score:1)
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If they get caught in Russia, they won't pay time because they will just turn up "missing" if it makes Putin look bad in any way.
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Who pays? (Score:4, Insightful)
Where will the money come from? Somehow I don't think it'll be execs who are "rightsized".
Where's the prison terms? Where's the personal liability for CxOs? No, they are likely not directly accountable for the actions of every single individual employee, but they are responsible for the actions of the company in general. When the company does something illegal, the boss should pay the penalty; it's the only way to justify the ludicrous money they make.
CAPTCHA: higher
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You're right. It'll be the lower level employees who most likely pay.
I work for a company that got hit with a FCPA violation years ago. We couldn't send anything out of the country without explicit State Department approval for years. It pretty much drove us to bankruptcy until we got bought by a bigger company with enough pull to ease the restrictions. One of the conditions is that *every* employee now has to have annual training on the FCPA.
According to FCPA, both individual and company (Score:2)
So what? (Score:5, Funny)
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Yeah, it's pretty much impossible to do successful business in at least Russia without bribing someone. It's just an accepted part of doing business there. Can't speak for the other places, but wouldn't be surprised if they were there same way. And as a matter of fact, it's the same way in America, only America calls it "expedite" (sp?) fee or "VIP" or some other term to make it legal, but really it's the same thing as paying someone to process your stuff first/better than others.
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And as a matter of fact, it's the same way in America, only America calls it "expedite" (sp?) fee or "VIP" or some other term to make it legal, but really it's the same thing as paying someone to process your stuff first/better than others.
Actually, it's not. Certainly there are cases in which one can pay for speedier service, but those aren't all that common, particularly not in interactions with government. And where they do exist, they're open, published fees that are paid to the agency or company in question, not under-the-table bribes to an individual. Bribery does exist in America, but it's pretty rare, and trying to bribe a public official is a good way to go to jail.
The one major exception, of course, is campaign contributions. Thou
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And as a matter of fact, it's the same way in America, only America calls it "expedite" (sp?) fee or "VIP" or some other term to make it legal, but really it's the same thing as paying someone to process your stuff first/better than others.
Actually, it's not. Certainly there are cases in which one can pay for speedier service, but those aren't all that common, particularly not in interactions with government.
Actually it is. The business culture in those countries is a lot different than here. People expect to get special treatment, special deals, and special offers. Right now the company I'm working for is modifying their systems to support multiple price lists for the sole purpose of making our Chinese clients think they're getting a great deal. Here, a widget costs $100 and we give a 25% discount. There it costs $750 and we give a 90% discount. Same item, same cost, same profit, different list price.
Whe
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Re:So what? (Score:5, Informative)
So they admitted to doing business in Poland, Russia and Mexico. Big deal.
Pretty much.
When I worked for IBM we tried to do business in Mexico. We didn't fail completely, IBM does have some small operations there, but we were perpetually hamstrung by the fact that company policies defined under the American model prevented us from competing effectively in Mexico. It sounds like someone at HP decided not to be so limited.
It's really sad. The endemic corruption in some of these countries really holds them back. I spent two years living in southeastern Mexico when I was a young adult (as a Mormon missionary), and I really learned to love the country, the people, the food, the language... Mexico is a fantastic nation, rich in natural resources, with many interesting cultures and sub-cultures and (American stereotypes to the contrary) a powerful work ethic. But the endemic corruption and all that it enables (e.g. drug-related violence, election fraud and inefficient business and government) make it impossible for the nation to realize its full potential.
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IBM was probably rightly worried about the FCPA [wikipedia.org].
Which does make it illegal to engage in that sort of behavior for a US business even in places where that is the norm. Now personally I think this is another example of the globalism people trying to have it both ways. They want "free trade" but they also demand US companies compete while being gagged and handcuffed. There certainly are parts of the world where its just the way business is done.
Either we should not have free trade agreements with these plac
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I think FCPA is a good idea, the problem is that we don't level the playing field. If the US got everybody else to pass similar laws and enforce them, then the playing field would be level. The problem is that if a US company follows the FCPA and a German company does not, the US company is at a disadvantage (I just picked Germany at random - for all I know they have a similar law that is well-enforced).
I think that first-world countries actually need to stick together a bit more to get rid of this nonsen
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The problem with what you propose is that it is a race to the bottom. If you require domestic companies to treat workers in a certain way, but allow them to trade freely with companies in other countries that do not have to treat workers in this way, then everybody is going to outsource everything to whatever country has the fewest controls, until everybody repeals all their worker protections to keep people employed.
Free trade and socialism just don't mix. It is far more sensible to band together with ot
Re:So what? (Score:4, Insightful)
endemic corruption and all that it enables (e.g. drug-related violence, election fraud and inefficient business and government) make it impossible for the nation to realize its full potential.
Yes, the influence of the corruption in Norteamericano politics really has boned Mexico. Wait, is that not what you meant?
The influence of Norteamericano (a misnomer, since México is also part of Norteamérica) politics has boned México, but not so much because of our political corruption but because of our failed drug policy. The really horrible drug violence problems they're facing now are a result of caving to US pressure to try to stop the flow of drugs through Mexico. The attempt failed utterly, as anyone with a brain knew it was going to, and it turned the Mexican drug traffickers into ultra-violent thugs. The relatively peaceful traffickers from 20 years ago were imprisoned or killed, and the guys who replace them are seriously nasty.
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Just thinking about the Zetas sends a chill down my spine. I hope the wave of drug legalization that's sweeping the US will cut off their profits.
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Because of the US policies in the 70's to destabilize latin america, corruption and fraud are a direct result of that.
Could you elaborate?
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What HP did was bribing high level government and corporate
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Must have failed to bribe someone to keep quiet (Score:4, Insightful)
When you start down the road of bribery and corruption, just know that you can never get off it.
Bribe / Donation same thing. (Score:2)
Of course the bribes to all levels of politicians in the US are legal and are called donations, that and revolving door syndrome.
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Then we blame the so called "third world" when they "learn" this kind of behavior from us. Remember, we always have the "moral high ground."
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Yep but Poland, Mexico and Russia apparently don't have a formal "lobbying" system to make these bribes legal. That's the difference you see.
Typical (Score:1)
Sounds like your typical corporate junket.... except these aren't corporation!
Hewlett & Packard are spinning in graves (Score:3, Insightful)
I cannot imagine either of those two approving of such business practices.
Hmm, 10 years ago, so that means 2004. That means during Carly Fiorina's reign, then Mark Hurd, then Leo Apotheker, then Meg Whitman.
I guess bribery and corruption must be good for shareholder value? Hey, bribery is just part of unfettered capitalism, isn't it?
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Hey, bribery is just part of unfettered capitalism, isn't it?
Except bribery does not exist in capitalist US. Instead, we call it "lobbying" and "campaign contributions."
Yeah, whatever ... (Score:4, Interesting)
This is different from lobbyists giving "campaign contributions" how?
The same thing happens everywhere, it's just a matter of the form it takes.
At this point, I assume all politicians and all corporations are corrupt.
Re: Yeah, whatever ... (Score:1)
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As I said, whatever ... they still essentially collect money from lobbyists, they just managed to write the rules in such a way as they have a nice legal exemption.
Like I said, I just assume all politicians and corporations are corrupt, it saves time.
Cultural Differences (Score:4, Insightful)
What many in the U.S. don't realize is that what we call bribery is SOP in some countries. Not that it makes it right, or legal, but it may be the only way for a company to do business there. I've witnessed this first hand in a couple places, with local government officials who would just not process paperwork unless you "tip" them.
Re:Cultural Differences (Score:4, Informative)
What many in the U.S. don't realize is that what we call bribery is SOP in some countries. Not that it makes it right, or legal, but it may be the only way for a company to do business there. I've witnessed this first hand in a couple places, with local government officials who would just not process paperwork unless you "tip" them.
That's a "Facilitating payment" [wikipedia.org] and is actually OK for US companies to pay. A facilitating payment is payment to make someone do something faster or more efficiently, but the person was obligated to do that thing anyway. Good examples are customs clearance, port expediting payments, etc. The official is obligated to release items from customs if all the paperwork is correct. He isn't obligated to do that in a timely fashion, however. The payment just makes his inevitable action happen faster.
When you pay for an action which may not have happened without payment (like a favorable decision) that is when it becomes bribery.
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The first step to legalizing bribery is to not call it bribery.
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Well, the issue is that in many countries these payments are not legal - but those laws are just never enforced. So, I'm not sure if those payments are actually legal under the FCPA. You are right that this is just how business is done - the local government probably barely pays some types of officials at all, realizing that they'll do the job just for the bribes.
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And what many don't realize is what is called bribery in other countries is called Lobbying and Campaign contributions in the USA.
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No, this is much more than the tip style bribery, in fact the foreign corrupt practices act specifically excludes payments to officials who are just doing their normal function (your tips to get paperwork moved), this was out and out corruption to get sweetheart deals. Nobody is paying one official $600k to get paperwork moved along, they're doing that to get millions in contracts with little oversight and hence tons of profit margin. Trust me, nobody in DOJ is going to upset powerful multinationals over so
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Interesting. I've received annual training on this, and never heard of any exemption except for national security purposes. The guide I just looked at also lists that as the only exemption.
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Is it ever okay to "grease" an official's palm?
If the payment is only intended and only results in an official carrying out his or her job duties a bit faster (without breaking any other rules), then it MAY be legal. If the payment speeds up the process by ignoring the local laws or regulatory process, then the payment is still an illegal bribe. So in addition to the FCPA, you must check written laws of the host country. link [msu.edu]
You can find many other sources, the case law around it is a bit nuanced, but basic
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Excellent. Thanks!
Interestingly enough... (Score:1)
...all Polish sources feature prominent headlines to the effect of "HP sentenced to multi-million fine for unfair business practices in Russia and Mexico". They barely even mention the fact that the local officials were, apparently, taking those sweet, sweet bribes too.
Funny how that works out, eh? It's only fair to mention, though, that most Polish conventional/old media are owned by members or strong supporters of either of the two current majority parties (The right-wing Citizen Platform, and the so-righ
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Very interesting (Score:2)
I guess HP didn't buy into that so much.
Amateurs (Score:2)
No one personally held responisble (Score:1)
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Nothing will change until someone at the bribing company is personally held responsible and faces the danger of jail time
Nothing will change until stockholders are personally held responsible.
Why isn't the UK jumping on HP too? (Score:2, Informative)
I'm sure HP does business in the UK, therefore they can be prosecuted under this regardless of where the crimes took place.
http://en.wikipedia.org/wiki/Bribery_Act_2010
"The penalties for committing a crime under the Act are a maximum of 10 years' imprisonment, along with an unlimited fine, and the potential for the confiscation of property under the Proceeds of Crime Act 2002, as well as the disqualification of directors under the Company Directors Disqualification Act 1986. The Act has a near-universal jur
My, how HP has fallen... (Score:2)
Standard operating procedure (Score:5, Informative)
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for western companies operating in Russia is to hire "logistics consultants" among locals who do all the actual bribing. It provides a degree of separation - a plausible deniability.
Yeah, I am working on a computer system that facilitates international transactions, and part of me wonders if part of the value-add of outsourcing some of the paperwork-handling in some countries comes from them handling paper of a different kind. We just pay a fee for them to do the job - who knows what they use it for.
Official Bags (Score:5, Funny)
What are 'official bags'? Are those the ones with a big dollar sign on the side?
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What are 'official bags'? Are those the ones with a big dollar sign on the side?
hmmmm too bad terrorists don't use "official bombs" with "bomb" written on the side.
I miss batman...
Soo.... (Score:1)
Since corporations are people too, when can it be placed on the public record that Hewlett-Packard has been officially incarcerated?
Some bribery is required to operate in some places (Score:2)
It doesn't make it a good thing, but the reality of international business is that bribery is required if you want to do business in some countries. This looks like it was pretty overt though, so that's probably why they got caught. I work for a multinational that routinely has to ship equipment all over the world. There are some places like Africa and the Middle East where your stuff will never clear customs without someone getting paid, or you have to pay someone off to make sure it doesn't disappear. The
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Which is why those payments have an explicit exemption in FCPA - making it completely different from a cash business owner committing tax evasion.
Bribery's Sin is Relative (Score:2)
Countries most likely to require a bribe (per Transparency International)
1. Russia
2. China
3. Mexico
4. Indonesia
5. United Arab Emirates
6. Argentina
7. Saudi Arabia
8. Turkey
9. India
10. Taiwan
Sometimes bribery is just expected. Russians have been brow-beaten by their ruling class(es) since the dawn of time. If you were to moan about paying a bribe there, grandmother passers-by would tell you to nut up and just get it done. In China, it's simply an expected part of business-- gifts of all sorts and money are exp
Oh Megan (Score:2)