More details on HP bribery allegations

Justice Department is also reportedly examining whether HP violated the Foreign Corrupt Practices Act, a law barring U.S. companies from bribing foreign governments or officials.

U.S. officials have joined Russian and German authorities in looking into allegations that Hewlett-Packard may have paid millions in bribes to win a computer equipment contract.

HP acknowledged Friday that the company has been contacted by the Securities and Exchange Commission, and it "will continue to fully cooperate with the authorities investigating this matter," an HP spokeswoman told CNET.

The Wall Street Journal reported Friday that the Department of Justice, along with the SEC, are trying to determine whether HP violated the Foreign Corrupt Practices Act. The anti-bribery law prohibits American companies from making payments to foreign government officials to obtain business.

The Journal first reported Wednesday that German prosecutors are investigating whether HP paid $10.9 million for the chance to sell a sophisticated computer system providing secured communications to the Russian prosecutor general's office through a German subsidiary company. HP's offices in Moscow were raided Wednesday by Russian investigators looking into the matter on behalf of the German prosecutors.

The investigators were looking for evidence that HP used a series of shell companies located in places from Britain, Austria, Switzerland, the British Virgin Islands, Belize, New Zealand, Latvia, Lithuania, to the U.S. to create a fund that paid the Russian prosecutor's office.

Investigators still don't know who received the $10.9 million, believed to have been paid between 2004 and 2006. But there are three people said to be the focus of the investigation. They are Hilmar Lorenz, former head of sales for HP in Russia, Kenneth Willett, head of HP's German equipment sales unit, and Paeivi Tiippana, who held Willett's position before him.

HP said in a statement Wednesday that the investigation was looking at events that occurred "almost seven years ago, largely by employees no longer with HP." But Willett still works for HP though he's currently on administrative leave.

Willett, Lorenz, and Tiippana were each arrested and released from jail, though none have been officially charged.

Lorenz was released on March 25, after posting bond and agreeing to talk to German prosecutors. It appears Lorenz was the main person responsible for landing contracts for HP in Russia for years. And the German investigators are focusing on whether Lorenz was the architect of the elaborate plan to move the $10.9 million from shell companies into the coffers of the Russian prosecutor's office to win the 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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