HP TRAINING PARTNERS FOR ANTI-BRIBERY PROGRAM !!!

[Anonymous]

http://www.crn.in/ITChannel-005Oct009-HP-Charging-Partners-For-Anti-Bribery-Training.aspx
HP TRAINING PARTNERS FOR ANTI-BRIBERY PROGRAM !!!
Hewlett-Packard
is demanding that its global network of 154,000 channel partners pay to
complete a regulatory compliance training program by October 31 or risk
losing their partner status.
HP
recently notified some US-based partners of the compliance initiative
via a faxed letter that described the mandatory compliance requirement
and a $120 fee “only payable by credit card.” The delivery method,
combined with the credit card-only terms, set off a bit of a furor
among solution providers, some of whom said they initially believed the
faxes to be a hoax.But it’s no scam. HP is demanding that partners
register for the program, complete a short compliance training module
with a third-party contractor, review and accept HP’s Partner Code of
Conduct and complete a questionnaire to assess compliance risk.

Joe
Balsarotti, President, Software To Go – an HP partner, said the ASCII
Group’s online forum was buzzing with “ticked off” HP resellers as the
faxes announcing the compliance program started arriving last month.
The program itself was announced in June, according to HP, but some
partners say that the faxes were the first they heard about
it.Balsarotti, whose company is located in Missouri, said partners were
troubled because “HP is usually such a professional company,” but the
grainy, faxed correspondence “looks like a scam and it smells like a
scam.”Risa Stolly, Owner, A-Prompt – a Pennsylvania-based partner, also
described the communications as “unprofessional.” She said A-Prompt
“threw the fax in the trash” before learning from her peers that the
message was a legitimate communication from HP that now appears on the
company’s partner portal.”We could have communicated this better,” said
a spokesperson for HP’s Solution Providers Organization—Americas. HP
will be mailing partners directly with more information about the
compliance program ahead of the October 31 deadline, the spokesperson
said.
 

The compliance effort is apparently aimed at
preventing everything from bribery prosecutions associated with the US
Foreign Corrupt Practices Act (FCPA) to gray market movement of
products aimed at avoiding taxes.”This initiative seeks to protect both
HP and HP partners by reducing business risk and unnecessary costs,
penalties and goodwill damage that can result from noncompliant
behavior, including government sanctions and legal action for
violations,” wrote Enrique Lores, Senior Vice President, Worldwide
Solution Partners Organization and Commercial Sales, HP, and Jon Hoak,
Vice President and Chief Ethics and Compliance Officer, HP, in a fax
sent to HP partners that was obtained by Crn.com.”Partners that fail to
comply will face serious consequences, including potential loss of
status as an HP partner. All HP partners are required to complete this
program,” the faxed message warns.Integrity Interactive, the Waltham,
Massachusetts-based company administering the compliance program, will
receive the entirety of fees from participating partners, according to
HP. That’s no small amount of money — at $120 per partner from the
154,000 worldwide partners HP reported having in 2008, the initiative
would amount to better than $18 million in fees for Integrity
Interactive should every partner pony up.

But it seems
unlikely that HP’s entire channel will participate in the program,
given the reaction of some smaller partners. Some small solution
providers that do only several thousand dollars of business with HP
annually told Channelweb.com that they would rather buy their HP
products from big box retailers like Office Max and Staples rather than
pay the $120. They said they often get better pricing for their
customers from those stores than from distributors.For most larger
partners, the fee they are being asked to pay isn’t particularly
troubling—and partners with unspent market development funds from HP
can pay for the program with that money. Partners contacted by Crn.com
described the $120 as a “nuisance fee,” but one that they would gladly
pay if they knew more about the compliance program’s purpose.”It’s the
principle, not the amount,” said one partner who asked not to be named,
adding that he felt that HP had not communicated what partners would be
receiving for their time and money.”They’re getting something back. The
reason HP partnered with Integrity Interactive is for suppliers to get
something tangible,” said Richard Cellini, Senior Vice President,
Business and Legal Affairs, Integrity Interactive. “We keep a
lock-encrypted PDF of their response. We maintain millions of these
records for hundreds of companies around the world.”

Cellini
said one reason HP was concerned with gray market issues and
anti-corruption enforcement was that the US government has signaled
that it will be focusing on high-tech companies for possible violations
of the FCPA.”Some smaller partners may be scratching their heads, but
that just shows how much this is needed,” he said. “The US Department
of Justice has targeted the high-tech industry on anti-bribery laws.
Whether you’re doing business for yourself or on behalf of a larger
company like HP, you can’t bribe anyone.””Routing things in a certain
way, to avoid taxes and duties, actually lands people in jail. Normally
the DOJ squeezes individuals to get at companies. But the bribery guys
want to put individuals in jail,” Cellini said, adding that “98
percent” of FCPA violations brought to court involve distributors and
resellers.”It’s essentially the ‘reseller corruption act.’ And it’s not
the wave of the future, it’s the wave of the present,” he said.

 

Cellini’s
interpretation of a tough new DOJ attitude towards FCPA violators was
seconded by Hugh Quinn, Principal, Quinn Forensics – a DC-based
compliance consultant. Quinn said the DOJ was currently conducting
about 120 open investigations into possible FCPA violations, a major
increase in focus on the Carter-era law.”They’ve had more enforcement
of the FCPA in the past four years than in last 40 years,” he said.
“They’ve increased their staffing and the biggest area they’re going
after is third-party vendors. So anything a partner does, the liability
could go to HP.”

Quinn said that even the smallest of businesses
ought to be as concerned with FCPA compliance as larger firms, pointing
to the September conviction on federal bribery charges of Gerald and
Patricia Green, a husband and wife who ran film festival and tourism
businesses together in Los Angeles. The Greens face up to five years in
prison for each of their FCPA violations.”Most of the people getting
hit with this FCPA stuff, they’re your next door neighbor. They’re not
robbing banks,” Quinn said. “And most of the FCPA cases never go to
trial. They get settled because everybody’s scared to death of
it.”Participating in compliance programs like Integrity Interactive’s
can help protect individuals against FCPA charges if an employee or
business partner violates the law, Quinn said.”I don’t think it’s too
much to ask,” he said, referring to the $120 fee HP partners are
required to pay for the program. “It’s a nuisance fee, but if you want
to play with the big boys, you’ve got to pay it.”I’m pretty sure HP
doesn’t want to do business with somebody who’s going to sink the ship.
Look, the best thing in the world is that you get to be CEO of HP,”
Quinn added. “The worst thing in the world is if you’re CEO of HP and
the feds put you in handcuffs because one of your resellers violated
the FCPA.”

Some partners, however, say they might just walk away
from their partnership with HP over the compliance initiative. Derek
Gabriel, Owner, Gabriel Phoenix Communications said his Hawaii-based
company already pays fees for other compliance programs independent of
HP.”If you want me to jump through an extra hoop to prove additional
compliance for you, that’s an expense you should be responsible for. By
forcing my company to pay for your compliance efforts, you add
additional costs to do business with you. This compounds the already
high costs associated with training and certifications to do business
as an HP partner,” Gabriel told Crn.com in an e-mail exchange.”Last I
checked, Lenovo, Dell, Xerox, Lexmark and the myriad other major PC,
printer and network equipment manufacturers don’t charge partners for
compliance schemes. So to continue to maintain a competitive stance
with respect to my operating costs, I’ll choose to strengthen my
business relationship with these other vendors over paying to prove
compliance with HP programs,” he said.

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October 6, 2009 at 11:27 AM