How I Spent My Summer Vacation, by HP: Firing CEO, Settling Kickback Suit
August has been a rough month for Hewlett-Packard (HPQ). Its beginning saw the resignation of CEO Mark Hurd amid allegations of business standard improprieties. And now, with the month drawing to a close, comes word of the company’s settlement of a long-running U.S. Department of Justice probe into its handling of government contracts.
HP has agreed to pay $55 million to settle allegations that it paid kickbacks to vendors who helped it win government business. The settlement follows a tentative agreement reached earlier this month in which HP resolved, without admitting wrongdoing, allegations that it had paid millions of dollars in kickbacks or “influencer fees” to systems integrators for preferential treatment on government contracts they were working on, though it had reasonable grounds to believe doing so was illegal.
“Contractors must deal fairly with the government when doing business with federal agencies,” Tony West, assistant AG for the civil division of the Department of Justice said in a statement. “As this case demonstrates, we will take action against those who seek to taint the government procurement process with illegal kickbacks.”
HP, for its part, continues to deny that it engaged in any illegal conduct. “We believe it is in the best interest of our stakeholders to resolve the matter and move beyond this issue,” it said in a statement of its own.
