HP pays $47m to settle US ‘kickback’ claims

Hewlett-Packard has reached a $47 million settlement with the US Department of Justice following allegations it paid “kickbacks” in order to win federal government contracts.

A complaint filed in 2007 alleged that HP paid a number of systems integrators and consultants to recommend HP products for use government contracts. The Department of Justice claimed that the payments – which were kept secret from authorities – were in violation of the US Anti-Kickback Act, which prohibits the exchange of money or compensation as means to receive favourable treatment.

“HP denies engaging in any illegal conduct in connection with these matters," the company said in a statement yesterday. "HP has agreed to a settlement with the Department of Justice, without any admission of wrongdoing, in order to resolve the allegations in full."

The initial accusations were made by a former Accenture employee turned whistle-blower who alleged that paying "influencer fees" to public sector IT systems integrators and consultants is common practise in the IT industry.

Storage vendor EMC was implicated in a similar law suit in May this year, and subsequently paid $87.5 million in settlement fees to the Department of Justice.

In April, authorities in Germany and Russia alleged that HP had bribed officials to win a $47.5 million contract with Russian prosecutors.

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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