The U.S. Department of Justice and the Securities & Exchange Commission have stopped looking into allegations that a former IBM employee broke the law by bribing a Polish official to win government contracts.
IBM disclosed the news in its latest 10-Q filing with the SEC.
The case—which surfaced more than five years ago—centered on Andrzej Machnacz, an IT official with Poland’s Interior Ministry, who allegedly took bribes from U.S. tech firms—including IBM, Oracle, and Hewlett Packard—in return for granting them government contracts, according to ProPublica and other reports.
Polish prosecutors charged that Machnacz got more than $1 million in cash and gifts in return for guiding government contracts to IBM (ibm), Oracle (orcl), the pre-split Hewlett-Packard (hpq), and Netline, a Polish company.
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Such behavior runs afoul of the U.S. Foreign Corrupt Practices Act (FCPA), which forbids companies from bribing foreign officials in order to win business. The FCPA also mandates that companies accurately account for all such contracts.
At the time, IBM said it was cooperating with both the Polish Central Anti-Corruption Bureau and the relevant U.S. enforcement agencies.
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Three years ago, HP paid a $108 million fine to the SEC and DOJ to settle charges of improper actions in Poland and three other countries. The status of the Oracle (orcl) case is unclear, and Oracle declined comment. Oracle has settled similar issues, however. In 2012, for example, it agreed to pay the SEC $2 million to settle a bribery case in India, according to Business Insider.
In 2013, a federal judge approved IBM’s payment of a $10 million fine to resolve similar cases in South Korea and China. As is usually the case with these civil penalties, IBM neither admitted or denied the charges.
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Here is the relevant text from page 44 of IBM’s 10-Q for its second quarter ending June 30, 2017:
Asked for comment on the Polish matter, an IBM spokesman reiterated that the company cooperated in the investigation and said its “system of robust controls were important factors leading to this decision.”