HP Agrees To Pay $55 Million In Kickback Probe Settlement


HP has agreed to pay the U.S. Department of Justice $55 million as part of a settlement agreement over allegations that the computer maker paid kickbacks to technology partners in order to secure lucrative government contracts.

The payment was announced by the Justice Department earlier this week and follows a tentative settlement announcement last month. HP admitting no wrongdoing in the matter and still denies it was involved in any illegal activity; however, the company decided to settle with the Justice Department and resolve the allegations in full.

The case involves allegations that HP, along with Sun Microsystems and Accenture, made illegal payments to alliance partners in order to win federal government contracts. The probe dates back to 2004 when two whistleblowers at Accenture filed a lawsuit again the three companies under False Claims Act, which allows private citizens to file lawsuits on behalf of the federal government.

The Justice Department began investigating the matter and later filed its own complaint in 2007, accusing HP of making illegal payments to partners as part of a kickback scheme. The $55 million settlement ends both the Justice Department complaint as well as the False Claims Act lawsuit.

While HP has brought this kickback probe to a close, the computer maker is facing another problem: HP was hit with bribery allegations in Russia last month.

The company's office in Moscow were raided by HP offices in Moscow were raided by Russian authorities in the spring and now both Russian and German law enforcement agencies are investigating allegations that HP paid bribes to secure government contracts in Russia.

The Justice Department has taken an interest in the European bribery probe and asked HP to turn over documents and materials related to the case.