Microsoft is reportedly being examined by authorities for its activities with foreign government officials that have been accused of taking bribes in exchange for business. The violations being reviewed come from a federal law that passed in 1977 that makes it illegal for government officials to receive money from American companies to further their business interest. Justice Department spokesperson, Michael Passman, said he could not confirm nor deny the existence of investigations.
The Obama administration has focused on corporate bribery overseas and is taking an aggressive approach to its prevention. The list of companies under investigation related to the Foreign Corrupt Practices Act reach over 100, including Microsoft. These types of investigations have penalties that run in the tens of millions of dollars. In 2008, Siemens, the German engineering company, brought an investigation to an end by settling with the Justice Department and the S.E.C. for $800 million. In 2011, the Justice Department took aim at other big names in technology and retailing, including Tyco International and Comverse Technology.
The preliminary investigation involves Microsoft China, Italy, and Romania, according to an unidentified contact. In 2010, Microsoft used the help of an outside law firm to conduct an internal investigation of its China division after receiving claims from a whistle-blower that was directed to pay bribes to government officials to win business deals. The law firm did not turn up anything that could be considered improper behavior. Eric Kaye, a former Justice Department prosecutor, said large companies face a huge risk in countries like China or Romania because bribes are often solicited.
John Frank, a vice president and deputy general counsel at Microsoft, said that it is not uncommon for the agencies to review these types of claims. “We take all allegations brought to our attentions seriously and we cooperate fully in any government inquiries,” Mr. Frank said. He continued, “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.”
