Feds probe Microsoft, foreign partners for alleged kickbacks
Mar 19, 2013, 10:55 AM | Updated: 2:44 pm
The Wall Street Journal reports federal officials are investigating Microsoft and some of its foreign partners and consultants for allegedly bribing foreign officials to secure software deals. (AP file)
(AP file)
The U.S government is investigating several Microsoft business partners and the company’s relationship with them for allegedly paying kickbacks to foreign government officials in exchange for software contracts, The Wall Street Journal reported Tuesday.
Sources say the Justice Department and the Securities and Exchange commission are investigating the claims made by a former Microsoft representative in China. They are also allegedly looking at the company’s relationship with some partners in Romania and Italy.
Both departments refused to comment, and the Journal reports the government is not accusing Microsoft or any of its business partners of wrongdoing.
“Like every large company with operations around the world we sometimes receive allegations about potential misconduct by employees or business partners,” John Frank, Microsoft’s vice president and deputy general counsel, told the Journal. “We cooperate fully in any government inquiries,” he added.
The Journal reports an anonymous source tipped off U.S. investigators last year. Microsoft also reportedly hired an outside law firm to conduct its own internal probe and found no wrongdoing.
“We take all allegations seriously and investigate them fully regardless of the source,” Frank told The WSJ. “We also invest heavily in proactive training, monitoring and audits to ensure our business operations around the world meet the highest legal and ethical standards.”
The Feds are also investigating alleged claims Microsoft resellers in Romania offered bribes to secure software sales. And they’re reportedly looking at other allegations consultants in Italy offered gifts and trips to Italian officials in exchange for contracts with the government.
Microsoft has offices in more than 100 countries, and said last year there were roughly 640,000 Microsoft partner businesses around the world.
The probe is far from unique. The government conducts dozens of investigations into claims companies are violating a 1977 law that prohibits U.S. companies and companies that trade on U.S. stock exchanges from paying bribes to foreign officials. The Journal reports the vast majority of cases are settled. But companies have paid over $2 billion in penalties since the law was enacted.
