• Print
  • 05 02 2016 429716a-cig-clearchoice-banner-902x177
  • banner-01-26-17b
  • ces_web_banner_toner_news_902x1776
  • 2toner1-2
  • ncc-banner-902-x-177-june-2017
  • clover-depot-intl-us-ca-email-signature-05-10-2017-902x1772
  • 4toner4
  • cartridgewebsite-com-big-banner-02-09-07-2016
  • mse-big-banner-new-03-17-2016-416716a-tonernews-web-banner-mse-212


 user 2010-05-10 at 9:58:53 am Views: 66
  • #23599
    HP investigation sheds light on
    challenges of the modern businessworld

    Despite President Dmitry Medvedev’s recent pledge to crack down
    on corruption, legal experts and overseas business advisers say it’s
    not surprising that a Russian government contract is at the center of a
    bribery investigation targeting Hewlett-Packard managers in Europe.”It’s
    extraordinarily difficult to avoid demands for bribes in Russia,” said
    Alexandra Wrage of TRACE International, a Washington-based group that
    advises corporations on avoiding foreign graft. “You can do business in
    Russia profitably, or you can do business in Russia legally, but you
    can’t very often do both.”

    That won’t let HP or its employees off
    the hook, according to several legal experts, if the allegations
    investigated by German and U.S. authorities turn out to be true. But
    some said the persistence of corruption in some parts of the world
    underscores why U.S. companies must act aggressively to ensure that
    employees aren’t paying bribes or kickbacks overseas.Both the U.S.
    Securities and Exchange Commission and Department of Justice reportedly
    are looking into the HP case, initiated by German authorities who
    suspect HP employees paid up to $11 million in kickbacks connected with a
    2003 contract to provide computer systems to a Russian government

    Palo Alto-based HP says it is cooperating with
    authorities and conducting an internal review. In a statement Friday,
    the company said no senior executives “then or now” had knowledge of
    what it called “alleged  activities that took place seven years ago in
    Germany and Russia by regional employees.” Overseas corruption is a
    particular concern to Silicon Valley companies that have factories and
    suppliers in Asia and sales operations around the world. HP, like other
    big tech vendors, draws much of its revenue from outside the United
    States.Singapore attorney Richard Cassin, who writes a blog about the
    FCPA and overseas graft, said HP is known for a strong anti-corruption
    stance.HP’s ethics policies, listed on the company’s website, include
    employee training and other measures. “We do not bribe,” says one
    document. “In countries where ethics issues are more likely to arise, we
    conduct additional training and audits to ensure our standards are

    Still, overseas business experts say demands for bribes are
    a recurring problem for multinational companies, particularly in
    developing countries. Russia frequently scores near the bottom of
    surveys in which corporate executives rank countries on whether their
    government and business climate are free from corruption.”Russia is a
    very difficult place to do business,” said Kenn Kurtz, CEO of a San
    Francisco risk management consulting firm called STEELE.Frustrated
    executives at Ikea, the Swedish retailer, have complained publicly that
    officials at Moscow’s electric utility demanded bribes to provide power
    for newly opened stores. Rather than bow to those demands, Ikea rented
    diesel generators to produce its own power.Even that effort ran into
    trouble: Ikea said it learned last year that one of its Russian
    executives accepted kickbacks from the generator supplier, which
    overcharged Ikea by almost $200 million.

    “These companies are
    huge global enterprises and sometimes an individual overseas just goes
    off the rails,” Cassin said. “It happens, but the company is still
    responsible for that behavior.”The Wall Street Journal, however, said
    German court records show the payments continued until 2006. The
    newspaper identified two suspects as former HP regional officials in
    Germany and Russia, and a third as a current HP marketing executive in
    Germany, now on administrative leave. The payments allegedly were made
    through middlemen and shell companies that submitted seemingly
    legitimate invoices.

    But even if the suspects acted without the
    knowledge of HP’s top management, legal experts say the company could
    still be liable under a U.S. law known as the Foreign Corrupt Practices
    Act. The law prohibits U.S. corporations, or their representatives, from
    paying bribes to foreign officials.”Even if senior management doesn’t
    know about it, that doesn’t give the company a pass,” said John Davis,
    an FCPA expert at the Miller Chevalier law firm in Washington, D.C.

    the last five years, authorities in the United States and Western
    Europe have assigned a higher priority to bribery cases, as some
    business groups have argued that enforcement helps level the competitive
    playing field. The volume of investigations, prosecutions and
    multimillion-dollar fines have all increased.As a result, many big
    corporations realize they need more than written policies against
    bribes. Regulators have urged companies to provide employee training,
    conduct audits and take other steps to prevent illicit deals, said
    attorney William Barry, an FCPA expert at Richards Kibbe & Orbe in
    Washington. He said authorities weigh those efforts when considering
    criminal charges or financial penalties for violations.