Saturday, 17 April 2010

Hewlett-Packard’s Moscow offices raided over bribery claims

Russian and German authorities are pursuing IT firm Hewlett-Packard over claims that executives paid a huge bribe to land a lucrative contract with the Russian Prosecutor General's Office.

On Wednesday the firm's corporate HQ in Moscow was searched by officers of Moscow's economic crimes department. Several employees of the firm wrote on their blogs that they were told to leave the office at 9:40 am, and were not allowed to return.

Corporate marketing manager Olga Ekkert confirmed that the office was indeed searched, but did not comment on what the search pertained to, RIA Novosti reported.

Other sources in the company revealed that the search was related to a "seven-year-old case that mostly involves employees who are no longer with the company."

And the raid was followed by a warning that more was to come as Russia attempts to clean up its act on corruption.

The head of Russia's National Anti-Corruption Committee Kirill Kabanov told The Moscow News that this is just the tip of the iceberg. "This isn't going to be the last case like this that we see this year," he says, explaining that there is a strong move by western companies to rid their business partners of corruption.

"There is no other way to do business in Russia", said Kabanov. "Either you play by the rules, or you don't work in the field."

Kabanov added that a culture of corruption meant that Russian officials tended to be more concerned about the size of the bribe on offer to them than the quality of the products or services offered to the public.

But among signatories to the Group of States against Corruption agreement (GRECO) - including Russia - zero tolerance of bribery is a must and failure to crack down is criminally negligent. As more foreign companies do business here that is putting pressure on Russia to conform to new standards.

Kabanov also stressed that Russian public officials don't care about the quality of products that is offered, they tend to care more about the size of the bribe. But for those countries that have signed the GRECO (Group of States against Corruption) agreement, accepting that bribes are a way of doing business is impossible, and criminally negligent, thus it is in their best interest that all of their partners play the same set of rules.

The Wall Street Journal reported that HP paid up to $10.9 million to secure the $47 million contract, and added that the company was cooperating with Russian and German authorities as well as launching its own investigation.

Russia's General Prosecutor's office has not commented on the matter, citing the lack of information.

The news follows the recent admission that Russia's Daimler franchises had been involved in paying bribes, while in February IKEA fired two senior officials over a bribery scandal at their store in St. Petersburg.

Hewlett-Packard is an American corporation that has an office in nearly every country. They specialize in computer equipment, printers, and other assorted IT infrastructure.

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