Feds Investigate Microsoft Bribery Allegations

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The U.S. Justice Department and the Securities and Exchange Commission (SEC) are reportedly investigating reports that Microsoft business partners paid bribes in exchange for software contracts in foreign countries. Microsoft says that it will cooperate with the investigation.

The Wall Street Journal’s Christopher M. Matthews, Joe Palazzolo and Shira Ovide first reported the story, writing, “Federal regulators are investigating Microsoft Corp.’s relationship with business partners that allegedly bribed foreign government officials in return for software contracts, according to people familiar with the matter. Lawyers from the U.S. Justice Department and the Securities and Exchange Commission are examining kickback allegations made by a former Microsoft representative in China, as well as the company’s relationship with certain resellers and consultants in Romania and Italy, these people said.”

Nick Wingfield with The New York Times confirmed, “The Justice Department and the Securities and Exchange Commission have both opened preliminary investigations into bribery accusations involving Microsoft in China, Italy and Romania, according to the person, who spoke on the condition of anonymity because the inquiry is a confidential legal matter. Microsoft’s practices in those countries are being looked at for potential violations of the Foreign Corrupt Practices Act, a federal law passed in 1977 that prohibits American companies from making payments to government officials and others overseas to further their business interests.”

Computerworld quoted Microsoft Deputy Counsel John Frank, who said, “We take all allegations brought to our attention seriously and we cooperate fully in any government inquiries. 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.”

Matt Hickey with Forbes added, “Microsoft apparently hired an outside law firm to do its own investigation into possible misconduct but found no evidence of wrongdoing.”