Feds: IBM bribed South Korea, China officials

IBM has agreed to a settlement of $10 million to settle civil charges. It's being sued by the SEC for using bribes to gain computer equipment contracts.

IBM has agreed to pay a settlement of $10 million to settle civil charges that it had an ongoing practice of trading bribes for computer equipment contracts, according to court documents filed today.

The Wall Street Journal first reported that the SEC is suing the company over cash bribes that it says IBM paid between 1998 and 2003 to South Korean government officials, and between 2004 and 2009 to Chinese government officials.

IBM did not admit to wrongdoing, but did say it has higher ethical standards for its employees and had taken "appropriate remedial action," according to the WSJ report.

The SEC's suit accuses employees in the South Korea offices of the tech giant of paying government officials $207,000 and providing travel, entertainment, and gifts of cameras and laptops in exchange for a contract to supply PCs and mainframes to the government.

The SEC complaint also alleges that more than 100 employees and two top officials of IBM in China paid for the vacations of Chinese government representatives, through slush funds established at travel agencies.

The investigation is part of the Justice Department's crackdown on violations of the Foreign Corrupt Practices Act. Last year it joined with Russian and German authorities in investigating whether Hewlett-Packard had bribed officials in Russia to land a computer equipment contract.

About the author

Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.


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