DOJ and SEC Investigating Microsoft for Allegations of Bribery of Foreign Officials

By Tracey E. Schelmetic March 20, 2013

“When in Rome, Do as the Romans” may be great advice when you’re on vacation, but for companies doing business in parts of the world where bribery is “business as usual,” things become a lot stickier.

Federal regulators announced this week that Microsoft Corp. is under investigation concerning its relationships with business partners that allegedly bribed foreign government officials in return for software contracts, a number of media sources are reporting today.

Both the U.S. Department of Justice and the Securities and Exchange Commission (SEC) are reportedly investigating allegations of kickbacks made by a former Microsoft representative in China. There are also allegations of improper conduct with resellers and consultants in Italy and Romania. 

Thus far, the government agencies are simply investigation and have not made any allegations or charges as of yet. While the agencies have not commented on the allegations, Microsoft responded to the media reports and said it plans to cooperate.

"Like every large company with operations around the world we sometimes receive allegations about potential misconduct by employees or business partners," said John Frank, Microsoft's vice president and deputy general counsel. "We cooperate fully in any government inquiries," he added.

According to the U.S. Foreign Corrupt Practices Act of 1977, it’s against the law for U.S. companies and foreign companies that trade on U.S. stock exchanges to bribe foreign officials.

An anonymous tipster who worked with a Microsoft China subsidiary alleged that he or she was told to offer kickbacks to Chinese officials in exchange for them signing up for software contracts with Microsoft, Business Insider is reporting today.

Edited by Brooke Neuman

TechZone360 Contributor

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