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September 14, 2010

SEC Widens Probe of HP Bribery Allegations

U.S. investigators have widened their probe of alleged kickbacks paid to Russian authorities by employees of a Hewlett-Packard Co. subsidiary in Germany.
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Authorities in Russia, Germany and the U.S. have been looking into alleged bribes totaling $11 million paid to secure a $44.5 million contract that ran from 2001 until 2006.
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Now, the U.S. Securities and Exchange Commission is also investigating governmental and quasi-governmental transactions in Russia dating to 2000, according to a quarterly financial statement the computer maker filed Thursday.
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HP says it is cooperating with the investigation, which so far has not produced any allegations aimed at the company itself.
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Carly Fiorina, the Republican candidate challenging Democratic Sen. Barbara Boxer in California, ran the company from mid-1999 to early 2005. On Friday, campaign spokeswoman Andrea Saul reiterated Fiorina’s previously stated position that she had no knowledge of the alleged bribes.
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Saul pointed to the company’s previous statement saying it would be a mistake to suggest that Fiorina or any other executive at the company’s Palo Alto headquarters was aware of the arrangement.
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The probe is another distraction for a company that just forced out its CEO for allegedly faking expense reports.
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HP accused Mark Hurd, who led HP for five years before resigning abruptly last month, of trying to hide a relationship with a contractor who ended up suing him for sexual harassment. Hurd has denied making any sexual advances toward the contractor and said he didn’t prepare his own expense reports.
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The story hasn’t ended with his departure. HP is suing Hurd to keep him out of a new job with rival Oracle Corp., arguing his knowledge of the company would give Oracle an unfair advantage. Both companies provide corporate servers.
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The Russian kickback probe came up in April when authorities arrested three people in Germany and Switzerland in connection with the allegations. German prosecutors charged…

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