Ex-Hewlett-Packard Managers Charged in Germany on Russia Bribery

Three former Hewlett-Packard Co. (HPQ) managers were charged in Germany in a corruption investigation over improper payments made to win a 35 million-euro ($45 million) sale of computers to Russia about nine years ago.

They were charged with bribery, breach of trust and aiding in tax evasion, Wolfgang Klein, spokesman for Saxony’s Chief Prosecutor’s Office, said in a telephone interview today. A German businessman was also indicted. A former German Hewlett- Packard subsidiary sold the computers to the Chief Public Prosecutor’s Office of the Russian Federation.

“About 7.5 million euros of kickbacks were allegedly paid as part of the deal to people at Russian authorities to win the contract,” said Klein. “A network of accounts at companies in several countries was used to hide the money transfer.”

Hewlett-Packard’s Moscow offices were searched in 2010 in the bribery investigation by Russian prosecutors. The U.S. Justice Department and the Securities and Exchange Commission have also been examining the issue. The German prosecutors exchanged information with U.S. authorities in the case, Klein said.

Prosecutors asked the court to make Hewlett-Packard an associated party to the case, according to Klein. If the court grants that request and the allegations are proved, Hewlett- Packard’s profits from the transaction may be seized, he said.

Hewlett-Packard is fully cooperating with the authorities and “stresses that the company expects from employees and partners strict compliance of its business principles,” Anette Nachbar, a company spokeswoman said in an e-mailed statement.

One of the ex-managers charged is a Finnish woman. The other two are men, one American and one German, Klein said.

The German probe was started in 2009 after tax authorities routinely reviewed the books of a small company in the East German state of Saxony, said Klein. The tax investigators found that no real use could be established for some payments found in the accounts. The owner of that company was charged.

To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@Bloomberg.net.

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