HP's Moscow Offices Raided In Bribery Probe 106
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.'"
Necessity (Re:Apparently...) (Score:3, Interesting)
Indeed. In 3rd-world countries you must bribe if you want to compete because your competitors are bribing.
I wonder if this will lead up to the CEO? (Score:5, Interesting)
It was Fiorina at the time.
Re:Apparently... (Score:1, Interesting)
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 second point.
Russia got busted on Regan's wheel. I'm not saying that's entirely a bad thing, but it has consequences. About the only Russian organization that wasn't completely crushed was the KGB. They fought back. It's no surprise that Putin runs the show now, and in the old way. From the Russian POV the invasion has been fought back from the gates of Moscow just like the Germans.
Western companies were not welcomed as partners to establish Russian democracy & capitalism & global neighborliness. Western companies were welcomed in the same way German supplies and weapons were -- as resources to raid and take over. This was already most clear during Bush Jr's tenure. He let corporations run wild there without putting in equal support for developing democracy and rule of law there. All apparently in exchange for the single key moment when his buddy Putin said 'Yeah, our intelligence thinks Saddam has WOMD too'.
(I'm not fond of the Dems either, just Bush has the most memorable face-palm moments about handling the resurgence of Russian dictatorship.)
So yeah, they didn't pay enough -- HP does not currently present enough value to Russia to be left alone. So they're going to be squeezed to a rind now. They are not the first Western company this has happened to, and they are not going to be the last.
Re:Bribes are an everyday part of business at time (Score:2, Interesting)
Re:There's just so much about this... (Score:3, Interesting)
Which effectively prevents a US corp from doing business in many countries if held to, including Mexico, Russia, China, etc. It is not more meant to be obeyed than the laws against bribery in the nations where bribery is the de facto method of doing business. It's just a hammer for somebody to use if you piss off somebody. You go to China but you can't do business unless you pay the bribes but if you (or the person you paid the bribes to) ever piss off the wrong person in government, then they'll hit you with those bribes they demanded. Then the US government will go "gosh, we can't support that", and the hit you with their hammer too as a form of appeasement to various parties. Just like many of the laws in the US and the powers passed after 9-11, they expect you to break something, simply because they want to have something to use against you if they need the excuse.
Re:Necessity (Re:Apparently...) (Score:3, Interesting)
Productivity per capita? Sorry, but that is one of the few metrics with USA still at the top. Unfortunately the average American doesn't really benefit from that hard work, it mostly goes to make the top 5% even richer.