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

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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)

Jane McEntegart
20 Comments Comment from the forums
  • restatement3dofted
    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.
    Reply
  • 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.
    Reply
  • beayn
    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.
    Reply
  • spdlmt
    "influencer fees" Yeah, not guilty at all. It's like paying sales tax. ^^
    Reply
  • caustin582
    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."
    Reply
  • hotchrisbfries
    Why would you pay for a crime you didn't commit HP?
    Reply
  • dEAne
    Yeah it's cheaper to settle it than to fight it in court.
    Reply
  • whitecrowro
    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".
    Reply
  • aquila
    In Jane's defense:
    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...
    Reply
  • back_by_demand
    hotchrisbfriesWhy would you pay for a crime you didn't commit HP?Dunno, let's ask Michael Jackson.
    Whoops, too late...
    Reply