Feds reportedly probes Microsoft over bribery claims

PanARMENIAN.Net - Federal regulators are looking into an alleged bribery scheme involving Microsoft and its partners in China, Italy, and Romania, CNET reported citing the Wall Street Journal.

According to the Journal, lawyers at the Justice Department and the Securities and Exchange Commission are focused on allegations of kickbacks in China, as well as the company's relationship with resellers and consultants in Romania and Italy.

While Microsoft did not directly acknowledge the investigation, it said in a statement provided to CNET that it takes such allegations "seriously" and cooperates with government inquiries "fully."

"Like other large companies with operations around the world we sometimes receive allegations about potential misconduct by employees or business partners and we investigate them fully regardless of the source," John Frank, Microsoft's vice president and deputy general counsel, said in a statement. "We also invest heavily in proactive training, monitoring and audits to ensure our business operations around the world meet the highest legal and ethical standards"

In a blog post shortly after the Journal story posted, Frank noted that allegations don't always lead to legal action. "It is also important to remember that it is not unusual for such reviews to find that an allegation was without merit," Frank wrote.

Citing people "familiar with the matter," the Journal reported that the China allegations come from "an anonymous tipster" who was in contact with U.S investigators last year. That tipster, who worked to develop business for Microsoft and was also involved in a labor dispute with the company, reportedly alleged that a Microsoft executive in China gave instructions to "offer kickbacks to Chinese officials in return for signing off on software contracts."

Microsoft reportedly hired an outside law firm to look into the claims in 2010, and after a 10-month investigation found no evidence of wrongdoing.

The Italian claims are said to focus on Microsoft's dealings with consultants in that country. The Journal reports that consultants who specialize in customer loyalty programs have allegedly offered gifts, such as trips, to Italian procurement officials in exchange for government business.

In Romania, federal investigators are looking into allegations that resellers of Microsoft's software offered bribes to win business from Romania's Ministry of Communications, and what role if any Microsoft might have played, according to the Journal report. According to the article, a ministry spokeswoman said the allegations were "inconsistent" with agency records.