On September 11, the DOJ announced that ZAO Hewlett-Packard A.O., a Russian subsidiary of Hewlett-Packard Company, pleaded guilty to conspiracy and felony violations of the anti-bribery and accounting provisions of the FCPA for making improper payments to Russian officials to secure a technology contract with the federal prosecutor’s office. Following the guilty plea, a federal judge in the U.S. District Court for the Northern District of California sentenced HP to pay a $58.7 million fine. The guilty plea and fine are part of a larger agreement announced in April between HP, the DOJ, and the SEC, whereby HP and its international subsidiaries agreed to pay $108 million in criminal and civil penalties for bribing officials in Russia, Poland, and Mexico.
The DOJ’s Information accused the Russian subsidiary of the California technology company of improperly paying Russian officials millions of dollars in bribes to secure a $45 million information technology contract with the Office of the Prosecutor General of the Russian Federation. According to the DOJ, for several years company executives bribed Russian government officials using a multimillion dollar slush fund that was financed through an elaborate buyback scheme and concealed through the use of two sets of books and other off-the-books agreements.
In its press release, the DOJ praised HP’s “extensive cooperation” during the investigation, including conducting a “robust” internal investigation and engaging in “extensive” anti-corruption remedial efforts such as instituting disciplinary actions and enhancing its internal accounting, reporting and compliance functions. In April, HP said the misconduct was limited to a small number of people who are no longer with the company.
While HP was required to implement a corporate compliance program and report annually for three years to the DOJ regarding the implementation thereof, HP was not required to engage a corporate monitor in its settlement of the DOJ’s allegations.