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.'"
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HP states that in foreign nations 'it is common to engage in business practices that are prohibited by laws and regulations
Thank god they specified foreign nations, cause in the US that'd be wrong
Re:There's just so much about this... (Score:4, Informative)
In many other nations, the distinction between the laws on paper and accepted practices is much greater than it is in the United States (except maybe in Chicago or Philadelphia...). For instance, in most of the US, if you try to bribe a cop to get out of a traffic ticket, you're going to jail most of the time. In Mexico, the bribe -- la mordida -- is pretty much expected, and you're more likely to go to jail if you DON'T offer it, even though bribery is illegal in Mexico. So HP actually has a point here.
Looks like HP made the mistake of dealing with a dishonest politician... defined as one who won't stay bought.
Re:There's just so much about this... (Score:5, Informative)
In many other nations, the distinction between the laws on paper and accepted practices is much greater than it is in the United States
Too bad for US corps, we have this law here called The Foreign Corrupt Practices Act [wikipedia.org] that makes it illegal to bribe foreign officials.
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Too bad for US corps, we have this law here called The Foreign Corrupt Practices Act that makes it illegal to bribe foreign officials.
Proof that the government hates competition.
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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
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You go to China but you can't do business unless you pay the bribes
Isn't the ethical solution to get back out of China?
And I'm speaking as an emigrant out of Russia, where I came to detest the pervasive corruption.
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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.
If the contract is large enough, the government will step in and do the bribery itself (but then it's probably legal).
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Not so much greater as they're just different. See lobbying/campaign contribution/etc.
Apparently... (Score:3, Funny)
They didn't pay enough.
Necessity (Re:Apparently...) (Score:3, Interesting)
Indeed. In 3rd-world countries you must bribe if you want to compete because your competitors are bribing.
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Russia is basically a third world country with nukes.
Re:Necessity (Re:Apparently...) (Score:4, Informative)
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.
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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
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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
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It seems then that the old terminology has outlived its usefulness.
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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.
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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.
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The historical euphemism has been "non-aligned."
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[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]
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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?
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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.
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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
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Actually "third world" referred to any country not aligned with either capitalist countries such as the US (first world) or communist countries such as the Soviet Union (second world). Thus, the third world was Africa, South America, the Middle East, and India.
However, nowadays, "third world" can be used to refer to areas stricken with severe poverty. For example, I can say, "The rust belt of the United States is essentially a third world country" and everyone but you would know exactly what I was talking
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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
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You could always bribe the local prosecutors to investigate your rivals for corruption
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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.
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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.
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That's Russia for you.
Damned if you do,
Damned if you don't.
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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
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In Russia, a bribed Prosecutor General's office prosecutes you.
In other news... (Score:1, Troll)
Compare and contrast.
Arthur Levitt (Score:2)
Go offshore for "Greater Operational Flexibility" (Score:2)
(i.e. "Bribes"). Yeah, HP, how did that work out for you? Too bad they can't claw back your bonus for *that* move.
Ummm, (Score:1)
I wonder if this will lead up to the CEO? (Score:5, Interesting)
It was Fiorina at the time.
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Really the only difference between countries in their bribery and government contracts is the how they go about it. It's like the difference between a girlfriend who's only there for your bank account (assuming you both know that's the reason), a high-priced call girl, a middle-class hooker, and a crackwhore. They're all selling it. The only difference is in the terms used and how likely you are to lose your wallet to the pimp.
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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.
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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.
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hahaha yeah. i deserved that one.
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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
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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.
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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.
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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.
currently paywalled; Not anymore (Score:3, Informative)
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)
Bribes are an everyday part of business at times. (Score:5, Insightful)
"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?
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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.
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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.
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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.
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"Quis custodiet ipsos custodes?"
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Good news! Russia *does* have some secret police watching out for this sort of issue. Their job is to KILL YOU when you start to complain about this problem.
http://www.cpj.org/killed/europe/russia/ [cpj.org]
http://www.rferl.org/content/article/1071933.html [rferl.org]
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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.
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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
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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
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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].
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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."
Re:Bribes are an everyday part of business at time (Score:1)
HP? (Score:2)
This gives "Radia" a whole new meaning.
Not following their own Ethics and Compliance (Score:5, Informative)
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.
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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
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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
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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.
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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
IT'S A TRAP!!! (Score:1)
Bribe prosecutor's office to get contract and get prosecuted by the office.
Somebody needs to up their bribe-fu.
thats normal procedure (Score:2)
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That's not irony, that's corruption.
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HP obviously missed the Prosecutor General's memo that he needed a bigger bribe....
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I don't know about other countries, but in Russia, the laws are commonly stacked up such that you simply can't do business if you don't cough up the bribe - they'll close you down otherwise, because if you don't break law A, you're breaking law B (which directly contradicts A).
You can't even catch a corrupt official red-handed anymore. Not so long ago, they've enacted the law that using any concealed audio or video recording or transmitting device while dealing with a government official is a crime (which c
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Wow. Interesting to hear about, as I've long considered that the only way we will reduce corruption in the US is to have 24/7 surveillance of our elected officials, available for anyone t
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Next time someone replies to a troll like this just to get your comment higher on the page, I'm going to mod you off-topic, because you're off the topic that you're replying to. Unfortunately I won't be able to leave a comment explaining why. You want to top-post on this story, you're going to have to come up with some sort of kathleen fent-related content.
Your comment is not more worthy than anyone else's comment until it has been judged so by the community. You're just not special, sorry if no one has