None hurt in immaculate corruption, the HP way

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This week the American people learned an important lesson about bribery. It can happen all by itself. There’s even a name for this: immaculate corruption.

And it works just like the old saw about guns: people don’t bribe, corporations do.

This explains why Hewlett-Packard (HP) is paying $108 million (R1.1 billion) to resolve some overseas bribery investigations by the US Justice Department and the Securities and Exchange Commission (SEC), while no individuals are being accused of anything.

Because no living, breathing people did anything wrong (or none whose names we know of). Only HP did.

Another important lesson our government taught us this week is that Russia is corrupt. Who knew?

So is Mexico. Poland, too.

The US has laws to prohibit companies from paying off government officials in other countries to win business.

We can presume HP reasoned that the bribes were necessary because its printers, computers and technical services were so inferior in quality that this was the only way it could sell them. And I sympathise completely.

You could even make a semi-coherent argument that HP had a duty to try to get away with breaking these laws for the sake of maximising shareholder value.

Back in 2000, when the first of the bribes was immaculately conceived, the Justice Department and SEC hardly ever enforced the Foreign Corrupt Practices Act. But then they started enforcing it again.

Practically speaking, it became illegal again to bribe corrupt government officials in Russia, Poland and Mexico. HP found itself on the wrong side of the thin blue line.

Not a bank

Truth be told, the company’s biggest mistake was not being a bank. Neither the Justice Department nor the SEC has ever used the Foreign Corrupt Practices Act against a bank.

How bad was the conduct in this case? The bribes to the government officials in Poland helped HP win a contract with its national police agency.

In Russia, they helped HP retain a contract with the federal prosecutor’s office. That’s so bad it’s good. Like I always say, if you’re going to bribe anyone to get a government contract, you might as well get it with the cops.

So now HP is going through the usual drill of non-remorse. The company’s Russian subsidiary agreed to plead guilty to criminal charges in a federal court in California. Its Polish unit got a deferred-prosecution agreement.

And its Mexican subsidiary got a non-prosecution agreement. Thus the Mexican subsidiary had better watch out, because if it gets caught breaking the law again it might have to suffer the slightly more severe punishment of a deferred-prosecution deal, like its Polish cousin got.

As for the people who did the bribing? Well, again, that’s the best part: there weren’t any.

Because if there were, then the SEC and the Justice Department surely would have filed some sort of claims against them.

And this way, everyone is much happier. HP pays its toll without anyone there getting in trouble with the law. The government lawyers get help with their case quotas. And HP’s tall-building lawyers can claim to be heroes.

Justice has been served.

* Jonathan Weil is a Bloomberg columnist


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