The US justice department and securities regulator were investigating Microsoft after a former company representative made allegations that Microsoft business partners bribed government officials in China, Italy and Romania in exchange for software contracts, the Wall Street Journal reported.
The newspaper said that US officials declined to comment on the issue, but quoted people familiar with the investigation saying that in Romania’s case, investigators were reviewing whether Microsoft had a role in allegations that re-sellers offered bribes to secure software deals with Romania’s communications ministry.
In China, an executive of Microsoft’s China subsidiary is alleged to have instructed at least one employee (the whistleblower who tipped off US officials) to offer kickbacks to Chinese officials in return for signing off on software contracts; in Italy, the spotlight was on the company’s consultants, alleged to have been used as intermediaries that gave kickbacks to government officials in charge of procurement, WSJ said.
The investigation falls under the Foreign Corrupt Practices Act, the US law that forbids US companies and companies trading on US stock markets from paying bribes to foreign officials.
In a blog post, Microsoft vice president and deputy general counsel John Frank said that the software manufacturer was taking the allegations seriously and would co-operate fully with the inquiry.
But while the matters were serious and it was “appropriate that both Microsoft and the government review them”, Frank said that “is also important to remember that it is not unusual for such reviews to find that an allegation was without merit.”
Microsoft’s business in Eastern Europe has been in the spotlight before, including in Bulgaria, where then-state administration minister Nikolai Vassilev came under criticism in 2008 after signing a contract for 60 000 Microsoft and Office licences, worth a total 71.4 million leva (about 36.5 million euro).
The matter was briefly investigated by the country’s prosecutors, but charges were never pressed, despite media and industry rumblings that the public procurement notice was worded in such as way as to exclude all but a short list of companies from lodging bids.
(Photo: Zsuzsanna Kilian/sxc.hu)