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HP Businesses The Almighty Buck

HP's Moscow Offices Raided In Bribery Probe 106

Posted by Soulskill
from the hey-those-printer-cartridges-are-expensive dept.
FrankPoole writes "Hewlett-Packard's Moscow offices were raided Wednesday as part of a bribery investigation by Russian and German authorities. The news was first reported by The Wall Street Journal [currently paywalled; Reuters also covered it], which wrote that HP is suspected of allegedly paying out nearly $11 million in bribes to secure a major Russian government contract several years ago via a German subsidiary. Ironically, the contract was with the Prosecutor General's office of the Russian Federation, which will now play a role in investigating HP. While HP knew of the investigation as far back as December, the company did not disclose the information in any SEC filings. Instead, in its most recent quarterly report, HP states that in foreign nations 'it is common to engage in business practices that are prohibited by laws and regulations.'"
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HP's Moscow Offices Raided In Bribery Probe

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  • by Anita Coney (648748) on Friday April 16, 2010 @02:22PM (#31874812) Homepage

    They didn't pay enough.

    • Indeed. In 3rd-world countries you must bribe if you want to compete because your competitors are bribing.

      • Re: (Score:2, Funny)

        by Anita Coney (648748)

        Russia is basically a third world country with nukes.

        • by Nadaka (224565) on Friday April 16, 2010 @02:47PM (#31875182)

          Wow. ok.
          History lesson:
          The US and its primary allies are the first world nations.
          Russia and its primary allies are the second world nations.
          Everyone else that isn't important enough to vaporize in a global thermo-nuclear war is a third world nation.

          • So where does China fit into this? They are not US allies, as Taiwan is always a crisis waiting to happen for the US and China. China is not a Russian ally, as they've fought quite a few wars over the past 100 years. Russia has sold China some weapons, but Russia would sell nukes to North Korea if it would get the money for it. But they're certainly not primary allies. Let's say they're on speaking terms. And I would argue that in a global thermo-nuclear war, China will be important in one way or another.

            So

            • by Luckyo (1726890)

              China was considered 2nd world country due to similar political systems and their support for North Korea in Korea War. This despite soviet-sino war and it's self-imposed isolationism, as it still stayed largely true to its original policy of supporting hostile nations such as North Korea.

              Really folks, you need to get your terminology straight. Third world was not named third world because of its poverty, as current youth seems to think - it has been named to due to cold war divide into "us", "enemy" and "n

              • It seems then that the old terminology has outlived its usefulness.

                • by Nadaka (224565)

                  Somewhat.

                  China is the new ideologically opposed super power, so it would still be 2nd world. Russia itself may soon be out of second world status though.

                • by goodmanj (234846)

                  Agreed. The "three worlds" metaphor doesn't account for the rise of nuclear nations with their own agenda like China and India, for the fact that the standard of living in Mexico and Argentina exceeds that of Russia, for the fact that many of the former East Bloc countries have moved toward the west or actually joined the E.U...

                  It was simplistic in 1970. In 2010, it's just useless.

              • The historical euphemism has been "non-aligned."

          • by Hadlock (143607)

            [citation needed]
             
            slashdot needs a [citation needed] function like facebook has for liking status updates.
             
              Hadlock [slashdot.com] and27 other people [slashdot.com] require[citation needed] [slashdot.com]

            • by Nadaka (224565)

              If you are over the age of 15, you should know something about the cold war. Since your UID is lower than mine, I can safely assume you didn't join this site at the age of 9.

              [citation [google.com] needed] [wikipedia.org] indeed [nationsonline.org]

              Was that so hard?

          • by AK Marc (707885)
            Wow. ok. History lesson:

            Have you heard it used properly in the past 10 years? Switzerland is a 3rd world country, by basis of their neutrality. But the general nature of the "3rd world" to be places that weren't allied because they had nothing to offer made the term apply to mean "any nation that is significantly below the US in quality of life." I know what 3rd world is defined as, and what it meant when it was invented. However, its meaning now is defined not by books, but by how people mean it when
      • by camcorder (759720)
        You must be very experienced third-world trader. Bribing is an ethical issue, and apparently this ethical culture is not limited to the third-world countries, and western countries are also very convenient with bribing. You and those giving your insightful mod are just accusing lots of nations with this kind of ignorant claim.

        Actually using bribing as a way of marketing their overpriced products is a practice not because they could not compete with local third-world companies although they are superior, b
      • You could always bribe the local prosecutors to investigate your rivals for corruption

    • by jmichaelg (148257)

      You may be right.

      The case reminds me of Eddie DeBartolo, the former 49'ers owner, getting shook down by Governor Edwards of Louisiana. DeBartolo wanted a riverboat gambling license and Edwards wanted cash in exchange. Louisiana politics were notoriously corrupt so if you were going to do business there, you had a choice, pay the bribe or don't do business. Evidently Russia has the same kind of business rules.
       

    • Re: (Score:3, Funny)

      by e2d2 (115622)

      Damn it you beat me to it. I was gonna ask if they paid a bribe or if they failed to pay one. The article doesn't make it clear.

    • by zero_out (1705074)
      You're modded funny, but that's probably the truth.
    • Re: (Score:1, Interesting)

      by Anonymous Coward

      There's going to be a lot of comments like that -- which are funny and not entirely inaccurate -- but there are more ways of looking at it.

      First, Russia was a collapsed country when that was going on. Eventually enough Law and Order got reinstated enough to fight back against corruption, and we're now seeing that applied to HP. Sure, they're probably being raided by the same people who took the bribes, and we won't see any currently established Russians getting charged alongside, but that brings us to the s

    • In Russia, a bribed Prosecutor General's office prosecutes you.

  • SEC sues Goldman Sachs.

    Compare and contrast.
    • Arthur Levitt: The longest-serving SEC chairman (1993 to 2001). Hired by Goldman in June 2009 as an adviser on public policy and other matters.
  • (i.e. "Bribes"). Yeah, HP, how did that work out for you? Too bad they can't claw back your bonus for *that* move.

  • big business as it is normally done. Right?
  • by Biff Stu (654099) on Friday April 16, 2010 @02:31PM (#31874946)

    It was Fiorina at the time.

    • Re: (Score:3, Funny)

      by Jaysyn (203771)

      Oh you mean the one that is running for Senate?

      http://carlyforca.com/ [carlyforca.com]

      If California elects that crooked bitch, they'll get exactly what they deserve.

      • Re: (Score:1, Troll)

        by gangien (151940)

        California is already getting what they deserve, for so many stupid policies. But they shouldn't worry, Bernanke and company will bailout cali, i mean, they help bailout grease, how could they turn down cali? SO i guess, they're not getting what they deserve, oh well.

        • by gangien (151940)

          yeah i'm really trolling there. I love you mods, you're never biased, and never mod down stuff because you don't agree politically!! <3 <3 <3

      • Oh you mean the one that is running for Senate?

        http://carlyforca.com/ [carlyforca.com]

        If California elects that crooked bitch, they'll get exactly what they deserve.

        She's running for the US Senate (not the state-level), so the rest of the country gets to suffer with us.

        • by Jaysyn (203771)

          No, I mean the rest of the US is going to saw California off at the state line & push it into the Pacific, ala Bugs Bunny.

          • by goodmanj (234846)

            I believe cartoon physics says that if we do so, California will stay in place and the rest of the U.S. will fall into the Atlantic.

  • by viking80 (697716) on Friday April 16, 2010 @02:32PM (#31874968) Journal

    If you link from /. it is paywalled. As always, if you link from Google, it is all free. Just paste WSJ headline into Google, and go:

    http://www.google.com/search?q=H-P+Executives+Face+Bribery+Probes [google.com]

    First hit is the article in full.

    Funny how Google is a better front end to WSJ than WSJ itself. Maybe WSJ is shooting itslef in the foot with this policy. (Same with Mercury News and others)

  • by Neuroticwhine (1024687) on Friday April 16, 2010 @02:39PM (#31875072)
    While i didnt RTFA, but just to focus in on one aspect of the summary,
    "HP states that in foreign nations 'it is common to engage in business practices that are prohibited by laws and regulations.'"

    While they may have been wrong in this situation, the statement itself is very true; After spending some time in china for instance, bribery is certainly prevalent. Also when we examine the US system, with lobbyists and contributions... is it really that different?
    • Not to mention Cornhusker Kickback and Louisiana Purchase.

      For sale, votes: Current price between $250,000,000 and $1,500,000,000 depending upon condition. Please see your nearest associate for details.

    • by Yaotzin (827566)
      Well, as true as your statement may be, it doesn't make bribery ok. Government officials in China have been executed for accepting bribes. If you have to bribe someone, you should make sure that you can't be convicted for it.
      • Those dealing with such countries are stuck between a rock and a hard place. If they don't bribe they won't suceed, if they do bribe and someone decides to make an example of them for whatever reason then they may end up doing time.

        • Re: (Score:2, Interesting)

          by Yaotzin (827566)
          I think that punishing the people who accept bribes is more important than punishing those who bribe. It's not really fair, but if the financial climate requires bribery then obviously something is wrong. Punishing business interests for trying to succeed could lead to lowering the incentive to do business within the region. But by making sure that no one wants to accept a bribe, then you change the business climate. People accepting bribes are the real criminals.
          • by goodmanj (234846)

            Sounds good. So what do you do if the "people who accept bribes" are the same as the people in charge of prosecuting bribery?

            This is not a hypothetical question.

            • by Yaotzin (827566)
              Good point. In that case, I'd say that you're pretty much screwed. Unless you have some kind of secret police watching the people in charge of prosecuting bribery. Although I can't say I like the idea of secret police all too much...

              "Quis custodiet ipsos custodes?"
            • It's really a question with no good answer.

              A governement trying to weed out corrution could set up an independent body to investigate crimes commited by law enfocement but there is of course the risk of that becoming corrupt too.

        • Re: (Score:3, Insightful)

          by goodmanj (234846)

          Those dealing with such countries are stuck between a rock and a hard place. If they don't bribe they won't suceed, if they do bribe and someone decides to make an example of them for whatever reason then they may end up doing time.

          And that, ladies and gentlemen, is why corruption destroys national economies. Investors and multinationals understand this fact, and only the most desperate or stupid choose to do business in such an environment.

          Russia has been hanging foreign and domestic corporations out to d

    • Re: (Score:2, Insightful)

      by kkohlbacher (922932)
      I hope these individuals are dealt with with the verocity China sets forth on individuals breaking laws of this caliber.

      It amazes me how ethical behavior has taken a back seat to profits (see: Massey Energy, Maydoff, and the cause of that... oh what was that thing... uh, oh yea, global recession).

      How many of you were awstruck when Google pulled out of China? I was taken aback. Shocked that I was shocked. And I asked myself why that is?At the threat of losing a huge financial opportunity, I was ama
    • Quote:
      One of the things I have always found troubling about Westerners doing business in emerging market countries is that they sometimes take an almost perverse pride in discussing payoffs to government officials. It is as though their having paid a bribe is a symbol of their international sophistication and insider knowledge. Yet, countless times when I am told of the bribe, I know the very same thing could almost certainly have been accomplished without a bribe.

      Source: Chinalawblog.com [chinalawblog.com].

    • by HungWeiLo (250320)

      I did a business analyst internship with Weyerhaeuser, and their corporate policy specifically allows gifts to be given to business partners, vendors, and government officials whenever "the local custom or culture dictates."

    • Just read the history of Richard Branson and Virgin Records. They found it was cheaper to break the law and pay the fines than sell legal records, and they made a boat-load of money doing just that.
  • by MrKevvy (85565)

    This gives "Radia" a whole new meaning.

  • by zero_out (1705074) on Friday April 16, 2010 @03:01PM (#31875370)

    Instead, in its most recent quarterly report, HP states that in foreign nations 'it is common to engage in business practices that are prohibited by laws and regulations.'

    Apparently they didn't read their own Ethics & Compliance materials. As a former HP employee, I can tell you that every year the employees are required to take an online course in Ethics and Compliance. Part of those materials mentions that HP won't participate in any activities that are expected practice in other countries, but forbidden in the US. The specific example of bribery was included. Furthermore, simply knowing that a partner or subsidiary is doing something unethical on behalf of HP is forbidden. The act of a business partner bribing a customer to secure a contract for HP was one of the examples. In fact, there were even videos with actors portraying these situations. Then again, maybe the training materials grew out of this specific case.

    • Much respect, but those training items are really smoke screen passed on to the individual workers (as if they had any economic power to bribe a foreign official). They do not apply to upper management or board of directors (who can make those decisions of bribery), never have and probably won't any time soon. However, because you have to take those courses, the board of directors can present on demand an active company practice and policy to appease any would-be investigators, and ultimately provide spin

      • by AK Marc (707885)
        Much respect, but those training items are really smoke screen passed on to the individual workers (as if they had any economic power to bribe a foreign official).

        I personally know people who have illegally bribed foreign officials. It's really easy. The example I know was in Azerbaijan, not Russia, but still former USSR. There was an elevator in a building without usable stairs. When you show up to get to the room you have rented for corporate equipment, handling communications equipment, the securit
    • by Ruvim (889012)
      Yes, but were those training material in Russian?
    • by jayveekay (735967)

      As a former HP employee myself, I concur.

      However, I would like to add that at this time this Russian bribery situation is an alleged crime, not a proven one. If the source of the alleged evidence of wrongdoing is the Russian government, then I really don't know what to believe, since I don't believe that they have a lot of integrity or credibility in law enforcement.

    • The only reason for the yearly Ethics and Compliance refreshers is to remind the employees of what the Board members DON'T do. I'm always sure to remind them about that when they ask if I think the training is helpful. Lot's of resources being used to address an issue (or issues) with the leadership, rather than the rank and file.

      Although, in fairness, the actions being investigated were taken in 2000. The relevant contract completed in 2007. The emphasis on yearly ethics training didn't come about until th

  • Bribe prosecutor's office to get contract and get prosecuted by the office.

    Somebody needs to up their bribe-fu.

  • in the USA that is normal, it is called campaign contributions, or business investments. isn't capitalism grand?; where everything has a price (even your soul)

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