Sign in with
Sign up | Sign in

HP Settles with U.S. DOJ, Denies Illegal Conduct

By - Source: Tom's Hardware US | B 20 comments

HP Monday announced a settlement with the Department of Justice related to the company's GSA Multiple Awards Schedule and a lawsuit filed in the U.S. District Court in the Eastern District of Arkansas in 2007.

Exact figures of the settlement were not revealed, however, HP admitted in a statement that the deal would negatively affect the company's third quarter (fiscal year 2010) earnings by 2 cents per share. Taking this fact into consideration, the Financial Times estimates the settlement figure to be somewhere in the region of $47 million.

FT reports that the suit accused HP of paying a list of systems integrators "influencer fees" amounting to millions of dollars if they successfully put HP products forward in government deals. According to the suit, these integrators were obligated to act in the government's best interests but did not. HP is also said to have made 'New Business Opportunity' payments, which were not meant to be passed on to the government agency. The suit also alleges that the same products could have been obtained with volume pricing deals that would have reduced the payments.

Though settlements are often seen or perceived as an admission of guilt, HP was quick to assure the press that this was not the case today:

"HP denies engaging in any illegal conduct in connection with these matters," the company said in a press release. "HP has agreed to a settlement with the Department of Justice, without any admission of wrongdoing, in order to resolve the allegations in full."

HP did not provide updated guidance for either its third fiscal quarter in the statement.

Read more on the suit on the Financial Times.

[Last updated @ 23:00 PST on 03/08/2010)

Display 20 Comments.
This thread is closed for comments
  • 0 Hide
    restatement3dofted , August 4, 2010 12:22 AM
    Quote:
    Though settlements are often an admission of guilt


    They most certainly are not. In fact, I think you'll find that almost all settlements expressly provide that they are not an admission of guilt, or of any wrongdoing at all.

    That certainly does not mean that no party that settles a claim is not guilty, but there are any number of entirely legitimate reasons parties might settle a suit instead of dragging through a potentially lengthy, and almost certainly costly trial.
  • -3 Hide
    Anonymous , August 4, 2010 12:53 AM
    Carly Fiorina served as chief executive officer of Hewlett-Packard from 1999 to 2005. The old Head of HP is running for office? Now she is targeting the real loot! Vote early, vote often.
  • 0 Hide
    beayn , August 4, 2010 1:49 AM
    Restatement3dofTedThey most certainly are not. In fact, I think you'll find that almost all settlements expressly provide that they are not an admission of guilt, or of any wrongdoing at all.That certainly does not mean that no party that settles a claim is not guilty, but there are any number of entirely legitimate reasons parties might settle a suit instead of dragging through a potentially lengthy, and almost certainly costly trial.


    Agreed. They often find it's cheaper to settle than to fight it. That's all it comes down to usually - how much it's going to cost.
  • 1 Hide
    spdlmt , August 4, 2010 1:56 AM
    "influencer fees" Yeah, not guilty at all. It's like paying sales tax. ^^
  • 6 Hide
    caustin582 , August 4, 2010 5:46 AM
    Court settlements need to be made illegal. All they do is allow large companies to throw money at their legal problems to make them magically go away. If you're being charged for something, you're being charged for something. You're either guilty of it or not. It's complete bullshit that a corporation can say "Here's $47 million, let's just not talk about this anymore."
  • 3 Hide
    hotchrisbfries , August 4, 2010 6:06 AM
    Why would you pay for a crime you didn't commit HP?
  • 1 Hide
    dEAne , August 4, 2010 6:30 AM
    Yeah it's cheaper to settle it than to fight it in court.
  • 3 Hide
    whitecrowro , August 4, 2010 8:01 AM
    DOJ: "HP, we know you bribed them!", HP: "We stimulated, you can't prove it was bribe!", DOJ: "We can", HP: "Listen, it's going to ruin both of us, you can't afford public faces to step in front, also spend taxpayers dollars and us to loose precious business so let's settle this, agreed?!", DOJ: "Settled".
  • 1 Hide
    aquila , August 4, 2010 10:09 AM
    In Jane's defense:
    Quote:
    Though settlements are often seen or perceived as an admission of guilt

    not "Though settlements are often an admission of guilt". I think there's world of difference in those two sentences.

    Otherwise generally agree with opinions above. Sadly, it usually comes down to money...
  • 2 Hide
    back_by_demand , August 4, 2010 11:41 AM
    hotchrisbfriesWhy would you pay for a crime you didn't commit HP?

    Dunno, let's ask Michael Jackson.
    Whoops, too late...
  • 1 Hide
    Conner Macleod , August 4, 2010 4:03 PM
    Sadly this is the state of America. It's not a government for and by the people, it's a government for and by corporate America. Hence why you have the same thing happening with Intel and about a decade ago Microsoft paid its way (some $500 million) out of admitting any wrongdoing when they were sued by a dozen or so state attorney generals for violating the Sherman Anti-Trust laws, i.e. running as a monopoly.
    Look at how campaigns are run, they're all paid for by contributors who expect something in return.
    Look at the lobby in D.C. which essentially determines what laws get passed in favor of major corporations. In Europe lobbyists are illegal because it is considered bribery, but not so in the good ol' US of A where capitalism, corruption and greed go hand in hand.
    The laws need to change to prevent this type of hypocrisy. Money buys almost everything in this country, and obviously the DoJ isn't above its influence. You can be darn sure that had this been a small business or an individual guilty of bribery there'd be no settlement, unless there was a lot of money to be made.
  • 0 Hide
    hellwig , August 4, 2010 4:06 PM
    Where's Marcus to defend this as a necessary business practice? "Without dealer incentives, people might buy cheaper products that give less profit, and that would be bad for everyone, or at least the producer and the retailer, which is really all that matters."

    EDIT: Sorry Marcus, the article I'm thinking of: http://www.tomshardware.com/news/amd-intel-cpu,7837.html was written by Tuan. Sorry.
  • 0 Hide
    restatement3dofted , August 4, 2010 4:14 PM
    Jane, thanks for the updated language in your article - reading back over my post this morning, I'm sorry if it was sort of snarky or aggressive.
  • 0 Hide
    dextermat , August 4, 2010 4:31 PM
    Acer, Gateway, Sony, Dell, Toshiba are all in the same basket:
    They sold computers that has faulty material in it

    The only reason why they still in business it's because big companies get nice discount if they buy a lot of stuff with them.

    If you get a computer from any of the companies above: Order a RMA # cause you most likely need it.
  • -3 Hide
    grieve , August 4, 2010 5:08 PM
    Restatement3dofTedThey most certainly are not. In fact, I think you'll find that almost all settlements expressly provide that they are not an admission of guilt, or of any wrongdoing at all.That certainly does not mean that no party that settles a claim is not guilty, but there are any number of entirely legitimate reasons parties might settle a suit instead of dragging through a potentially lengthy, and almost certainly costly trial.

    yah... look at Michael Jackson, we all know he was innocent all 43 times!


    Frankly i dont doubt for a second HP is quilty.
  • 0 Hide
    grieve , August 4, 2010 5:14 PM
    Conner MacleodSadly this is the state of America. It's not a government for and by the people, it's a government for and by corporate America. Hence why you have the same thing happening with Intel and about a decade ago Microsoft paid its way (some $500 million) out of admitting any wrongdoing when they were sued by a dozen or so state attorney generals for violating the Sherman Anti-Trust laws, i.e. running as a monopoly.Look at how campaigns are run, they're all paid for by contributors who expect something in return.Look at the lobby in D.C. which essentially determines what laws get passed in favor of major corporations. In Europe lobbyists are illegal because it is considered bribery, but not so in the good ol' US of A where capitalism, corruption and greed go hand in hand.The laws need to change to prevent this type of hypocrisy. Money buys almost everything in this country, and obviously the DoJ isn't above its influence. You can be darn sure that had this been a small business or an individual guilty of bribery there'd be no settlement, unless there was a lot of money to be made.

    I totaly agree with you except one minor thing... "Money buys almost everything in this country"
    I would remove the word almost... this looks more true to me "Money buys everything in this country"

    OJ proved you can buy your way off murder and MJ proved you can molest children... if you have enough money. Everyday the Governement is bought!

    Have you ever sat back and thought what you would do for 100 million dollars? like don't tell anyone, but how far would you go? seriously think about it.... everyone can be bought, the question is... how much?
  • 1 Hide
    Conner Macleod , August 4, 2010 6:06 PM
    Well, I phrased it that way on purpose because not everyone can be bought, look at Serpico, the NYC cop back in the 70s who turned in dirty cops, he single-handedly brought down a ton of corruption. There are always exceptions to the rule, fortunately.

    OJ obviously did it, he was found guilty in civil court, but I'm not sure about MJ, he was actually acquitted in his trial, and all the people that went after him were proven to have a history of suing companies and trying to get money for nothing. I agree that it was wrong of him to settle the 1st one out of court, but I can't blame him for not wanting to drag it out for months in public. He was a very strange and messed up guy, but I do believe in innocent until proven guilty and he never was proven guilty, so I give him the benefit of the doubt, however odd his behavior was, although I blame that on his dad for mentally and physically abusing him as a kid, he never had a normal childhood.

    Anyway, they really need to change the laws so these companies cannot just pay their way out of crime, these are the biggest crooks around and the greatest irony in all this is that they're essentially bribing the government to look the other way for the bribes they're accused of. Really makes me not want to buy any HP products, and I thought about getting one of their laptops.
  • 1 Hide
    maestintaolius , August 4, 2010 8:23 PM
    Conner MacleodSadly this is the state of America. It's not a government for and by the people, it's a government for and by corporate America. Hence why you have the same thing happening with Intel and about a decade ago Microsoft paid its way (some $500 million) out of admitting any wrongdoing when they were sued by a dozen or so state attorney generals for violating the Sherman Anti-Trust laws, i.e. running as a monopoly.Look at how campaigns are run, they're all paid for by contributors who expect something in return.Look at the lobby in D.C. which essentially determines what laws get passed in favor of major corporations. In Europe lobbyists are illegal because it is considered bribery, but not so in the good ol' US of A where capitalism, corruption and greed go hand in hand.The laws need to change to prevent this type of hypocrisy. Money buys almost everything in this country, and obviously the DoJ isn't above its influence. You can be darn sure that had this been a small business or an individual guilty of bribery there'd be no settlement, unless there was a lot of money to be made.

    A decade ago? Oh heck no, it's happened at least dozen times in the last year alone. The $550MM Goldman Sachs settlement just happened 2-3 weeks ago where they also denied any wrongdoing. Sadly, the reality of the situation is it's not necessarily the DoJ being bought off, it's that the DoJ can't afford to get tied up fighting for years in court against very good corporate lawyers. Cases like these are very hard to to prove that anything illegal took place because of how well companies cover their tracks and getting through that smoke screen takes a lot of time and a lot of taxpayer money. What ends up happening as a result is the company forks over some money to the DoJ without having to admit they actually did anything. It works out for the DoJ because it looks like they are punishing wrongdoers without running the risk of losing the case (which would look REALLY bad for the DoJ) and the company under investigation gets to make the problem go away relatively cheaply and quickly. Long cases also run the risk of the DoJ being called to congressional hearings and raked over the coals as either witch-hunters or wasting money (typically by senators and representatives who have received, or will receive large campaign contributions from the company under investigation, either directly or indirectly through the general party fund).
  • 0 Hide
    restatement3dofted , August 5, 2010 4:16 PM
    grieveyah... look at Michael Jackson, we all know he was innocent all 43 times!Frankly i dont doubt for a second HP is quilty.


    I didn't say settlements indicated innocence, I said that they usually state expressly that they aren't an admission of guilt.

    There is a big difference between "innocent" and "not guilty."
  • 0 Hide
    Conner Macleod , August 6, 2010 4:25 AM
    maestintaoliusA decade ago? Oh heck no, it's happened at least dozen times in the last year alone. The $550MM Goldman Sachs settlement just happened 2-3 weeks ago where they also denied any wrongdoing. Sadly, the reality of the situation is it's not necessarily the DoJ being bought off, it's that the DoJ can't afford to get tied up fighting for years in court against very good corporate lawyers. Cases like these are very hard to to prove that anything illegal took place because of how well companies cover their tracks and getting through that smoke screen takes a lot of time and a lot of taxpayer money. What ends up happening as a result is the company forks over some money to the DoJ without having to admit they actually did anything. It works out for the DoJ because it looks like they are punishing wrongdoers without running the risk of losing the case (which would look REALLY bad for the DoJ) and the company under investigation gets to make the problem go away relatively cheaply and quickly. Long cases also run the risk of the DoJ being called to congressional hearings and raked over the coals as either witch-hunters or wasting money (typically by senators and representatives who have received, or will receive large campaign contributions from the company under investigation, either directly or indirectly through the general party fund).


    Preaching to the choir my friend, I was merely citing some of the bigger examples:)  I know Goldman-Sachs committed some horrible crimes in recent years, in fact they're the ones behind our current economical crisis (basically betting on the sub-prime mortgage markets) as well as that of Portugal, Spain and Greece, their influence is widespread. I suppose in a sense it's good that at least the DoJ get some money out of it, but nevertheless it's still wrong that they're essentially getting away with murder by simply paying a "small" fine (it is pocket change to them). Oh well, c'est la vie, money makes the world go round, or something.