“Federal authorities are examining Microsoft’s involvement with companies and individuals that are accused of paying bribes to overseas government officials in exchange for business, according to a person briefed on the inquiry,” Nick Wingfield reports for The New York Times. “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,” Wingfield reports. “Microsoft joins a list of about 100 other companies under investigation at present related to violations of the Foreign Corrupt Practices Act, according to Mike Koehler, a professor at the Southern Illinois University School of Law and the author of a blog, FCPA Professor, about the anticorruption law. Because companies have such a strong incentive to settle cases of this sort, they rarely end up going to trial.”
Wingfield reports, “The claims in China were first shared with United States officials last year by an unnamed whistle-blower who had worked with Microsoft in the country, according to the person briefed on the inquiry. The whistle-blower said that a Microsoft official in China directed the whistle-blower to pay bribes to government officials to win business deals. After this episode, the whistle-blower had a business conflict with Microsoft, the person added.”
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