Microsoft, Partners Probed Over Bribery Claims

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Microsoft, Partners Probed Over Bribery Claims

Posted by Soulskill on Wednesday March 20, 2013 @06:47AM from the all-about-the-benjamins dept.

c0lo writes "U.S. federal authorities are examining Microsoft's involvement with companies and individuals that allegedly paid bribes to overseas government officials in exchange for business. The United States Department of Justice and the Securities and Exchange Commission have both opened preliminary investigations into the bribery allegations involving Microsoft in China, Italy and Romania. The China allegations were first shared with United States officials last year by an unnamed whistle-blower who had worked with Microsoft in the country, according to the person briefed on the inquiry. The whistle-blower said that a Microsoft official in China directed the whistle-blower to pay bribes to government officials to win business deals. U.S. government investigators are also reviewing whether Microsoft had a role in allegations that resellers offered bribes to secure software deals with Romania's Ministry of Communications. In Italy, Microsoft's dealings with consultants that specialize in customer-loyalty programs are under scrutiny, with allegations that Microsoft's Italian unit used such consultants as vehicles for lavishing gifts and trips on Italian procurement officials in exchange for government business. In a blog post Tuesday afternoon, John Frank, a vice president and deputy general counsel at Microsoft, said the company could not comment about continuing investigations. Mr. Frank said it was not uncommon for such government reviews to find that the claims were without merit. Somehow, given the way OOXML became a standard, it wouldn't surprise me if it were an actual fire that caused this smoke."

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Hate to defend M$ in any way, but by Anonymous Coward · 2013-03-20 06:47 · Score: 4, Insightful

The China allegations were first shared with United States officials last year by an unnamed whistle-blower who had worked with Microsoft in the country
I don't know who this "whistle blower" was (likely a government official who they didn't bribe well enough), but EVERY company that does business in China bribes. It's more than a way of life there, it's absolutely ubiquitous. The only reason you don't have to pay bribes to breathe there is because no government official has found a way to extract them yet (and they would if at all possible). To do business there, you have to start with the knowledge that the whole goddamn country is built on two things: bribes and lies. And if you're lucky, a generous enough bribe MIGHT get you SOME of the truth every now and then. It's worse than India and Russia combined.
1. Re:Hate to defend M$ in any way, but by Anonymous Coward · 2013-03-20 06:54 · Score: 2, Insightful
  
  EVERY large company that does business ANYWHERE bribes.
  ftfy
2. Re:Hate to defend M$ in any way, but by boristdog · 2013-03-20 06:57 · Score: 2
  
  Exactly. Even small businesses in the USA. Been there, done that.
3. Re:Hate to defend M$ in any way, but by mc6809e · 2013-03-20 07:06 · Score: 4, Informative
  
  I don't know who this "whistle blower" was (likely a government official who they didn't bribe well enough), but EVERY company that does business in China bribes. It's more than a way of life there, it's absolutely ubiquitous.
  It's not just China, either.
  And calling this "bribery" isn't always correct. "Extortion" is probably just as a appropriate at times.
  Western multinationals can't do business in most parts of the world (and even US companies in parts of Europe) without some local official demanding money up front to make sure important documents like applications for permits don't "go missing", or that so-and-so's brother on some commission can be "advised" to make the right decision -- the implication being that you'll be held up if you don't pay up.
4. Re:Hate to defend M$ in any way, but by Runaway1956 · 2013-03-20 07:20 · Score: 2, Interesting
  
  "So this is why I pay extortion amounts of money for an OS that sucks balls every other release?"
  No, not at all. You pay those extortionate amounts of money because you are unable or unwilling to "Just say "NO!"" I paid for three legitimate installations of that company's operating systems. Then, I found alternatives. Yeah, it takes a little bit of work, but it's not that hard.
  
  --
  "Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
5. Re:Hate to defend M$ in any way, but by ShanghaiBill · 2013-03-20 07:33 · Score: 4, Interesting
  
  EVERY large company that does business ANYWHERE bribes.
  Baloney. I have run my own business in the USA for more than twenty years. I have never paid a bribe. Not once. I have never been asked for a bribe either. If I ever was, the first thing I would do is report it to the police.
  I have also lived and worked in China, and have some employees there today. Although I have paid bribes ("facilitation fees") there, they are becoming much less common. China is trying to clean up their act, and a more "rule-based", transparent China is in everyone's best interest.
  The most common bribes paid in China today are not business bribes, but migrant workers trying to bribe their way around the Hukou System in order to send their children to public schools. The Hukou system is a form of feudalism that bonds workers to the land. Under Mao, it was used to ban all internal movement of people. Today, people are allowed to migrate, but they surrender most of their legal rights when they do so. Abolition of the Hukou would probably do more to improve human rights than any other single change in the world.
6. Re:Hate to defend M$ in any way, but by Sarten-X · 2013-03-20 07:35 · Score: 3, Interesting
  
  Yep.
  I volunteered in Ghana for several months, and saw corruption on a daily basis:
  
  I can build that new room cheap and in a month... but it'd really be better if you pay twice as much to buy this good concrete (from my brother) rather than that crappy concrete that falls apart (when mixed ignoring the directions).
  
  Your visa's still a week away from expiration, but even though it's not written anywhere, there's a $25 fine for not renewing it two weeks in advance. Yes, I collect the fee personally, as a agent of the government. Cash only.
  
  Sure, you can take this taxi to that village, but there's a $5 fee for each bag, and each pocket.
  
  Yeah, that other guy bought a machete for $40, but this identical one is my best! It's $200.
  From the stories I've heard from others, the way for Westerners to do business in Africa is to first set a budget for a project, then find a local as a project manager, with the agreement that anything left in the budget goes into his pocket.
  
  --
  You do not have a moral or legal right to do absolutely anything you want.
7. Re:Hate to defend M$ in any way, but by JDG1980 · 2013-03-20 07:39 · Score: 2
  
  I don't know who this "whistle blower" was (likely a government official who they didn't bribe well enough), but EVERY company that does business in China bribes. It's more than a way of life there, it's absolutely ubiquitous. The only reason you don't have to pay bribes to breathe there is because no government official has found a way to extract them yet (and they would if at all possible). To do business there, you have to start with the knowledge that the whole goddamn country is built on two things: bribes and lies. And if you're lucky, a generous enough bribe MIGHT get you SOME of the truth every now and then. It's worse than India and Russia combined.
  Under the Foreign Corrupt Practices Act of 1977, paying bribes to officials overseas is a violation of American law if it's done by a U.S. business. While there are a few exceptions to this ("facilitation payments" for non-discretionary bureaucratic work, for example) they are very narrow and often fail to cover the wide range of situations where real-world foreign officials demand handouts. The result is that it's often illegal to be the victim of a shakedown if you're doing business overseas. Now it's certainly possible that Microsoft is as much perpetrator as victim in this case, but the FCPA is far too broad and really needs to be substantially revisited.
8. Re:Hate to defend M$ in any way, but by number17 · 2013-03-20 07:40 · Score: 2
  
  As one Former US Senator put it, lobbying is "not legalized bribery, it's legalized extortion." And it's not extortion by companies, but extortion by politicians.
  
  http://www.techdirt.com/articles/20120406/18051618415/is-lobbying-closer-to-bribery-extortion.shtml
9. Re:Hate to defend M$ in any way, but by juancn · 2013-03-20 07:45 · Score: 4, Insightful
  
  It is pervasive in many places. Since the US frowns upon US companies bribing foreign officials, there are many consulting firms local to the country in question that take care of the bribes. These are never mentioned explicitly, so the US company doesn't actually pay the bribes, it just pays the consulting firm. And the consulting firm takes care of the bribes. That way you have deniability.
  Since the consulting firm is out of reach from the SEC et.al. discovery is a bitch and the cases cannot normally be pursued (unless you get one of the officials to testify, which is at least difficult).
10. Re:Hate to defend M$ in any way, but by Anonymous Coward · 2013-03-20 08:00 · Score: 4, Insightful
  
  You are a complete idiot who is incapable of comprehending the English language.
11. Re:Hate to defend M$ in any way, but by s.petry · 2013-03-20 08:02 · Score: 2
  
  The subject including the statement about not paying bribes was referring to the US. Remaining paragraphs are about China. WTF do people learn in school today? No, really? Why can't you grasp the basics of your own language? Sadly you are not unique in your inability to perform basic reading comprehension tasks. Learn what a paragraph is, and how they are used.
  
  --
  -The wise argue that there are few absolutes, the fool argues that there are no probabilities.
12. Re:Hate to defend M$ in any way, but by hedwards · 2013-03-20 08:07 · Score: 2
  
  Your post is exactly why the US bars people from bribing foreign officials. You won't be in the kind of position where a bribe will save the lives of loved ones if they aren't expecting to be paid off. Chances are good that if they were wanting to just kill the people that they'd do it, if they're asking for bribe money to help, chances are good that money is the motivating factor.
  The US is one of the better countries in terms of prosecuting their own citizens for bribing foreign officials. The main hope we have for eliminating third world poverty is eliminating bribery as an acceptable means of getting things done. It's no coincidence that the worst countries for bribery are also the ones with the worst economies over all. Compared with that, the US has no corruption worth mentioning.
13. Re:Hate to defend M$ in any way, but by CannonballHead · 2013-03-20 08:12 · Score: 3, Insightful
  
  WTF do people learn in school today?
  That they are special and should get what they deserve regardless of how hard they work? ;)
14. Re:Hate to defend M$ in any way, but by David_Hart · 2013-03-20 08:16 · Score: 2
  
  "So this is why I pay extortion amounts of money for an OS that sucks balls every other release?"
  No, not at all. You pay those extortionate amounts of money because you are unable or unwilling to "Just say "NO!"" I paid for three legitimate installations of that company's operating systems. Then, I found alternatives. Yeah, it takes a little bit of work, but it's not that hard.
  It is that hard... or more people would be doing it...
  Apple keeps telling us that it's all about the apps. Well, Windows still has all of the apps, games, productivity software, financial software, etc. OSX does have some of these apps, but you are severely limited in choice. As far as games, Windows is "still the only game in town"...
15. Re:Hate to defend M$ in any way, but by NoKaOi · 2013-03-20 08:28 · Score: 3, Insightful
  
  And calling this "bribery" isn't always correct. "Extortion" is probably just as a appropriate at times.
  Or, in the US, where it's called "campaign contributions" and "lobbying."
16. Re:Hate to defend M$ in any way, but by magic+maverick+ · 2013-03-20 09:21 · Score: 2
  
  With regard the second one (visa and fee), I suggest asking for a receipt.
  With the third one (taxi), just walk away, find another taxi.
  With the fourth one (machete), just walk away; the person will probably call you back. You might not get the $40 price (white man tax) but you should be able to get it down to $60 or so.
  OK, I can't speak for Ghana, but I think that just walking away is a good option in almost any case like the ones you mentioned (where you have other options anyway, which is obviously not the case with the govt.).
  With regards actual bribery to government officials, I don't have much advice.
  
  --
  HELP MY ACCOUNT HAS BEEN HACKED BY AN ILLIBERAL ART STUDENT SET TO DESTROY THE INTERWEBZ!
17. Re:Hate to defend M$ in any way, but by tompaulco · 2013-03-20 12:17 · Score: 2
  
  Yes, waiters should be quite happy with the $2.10 /hour they make.
  You do realize that many tipped services pay quite a bit lower, because theyre essentially commission-based?
  Waitstaff should be paid an amount expected of them for a level of service as defined by the restaurant. A tip should be paid on service above and beyond this level of service. A complaint to management should be made on service less than expected. It should not be up to a customer to pay a tip for "average" service. That is what the waitstaff is supposed to provide and what the restaurant is supposed to pay the employee to do. I am quite sure that they need to pay far more than $2.10 for a typical waiter. Probably more like $8-$10 an hour. Then if the waitstaff performs above expectations, they receive a tip above and beyond that.
  
  --
  If you are not allowed to question your government then the government has answered your question.
18. Re:Hate to defend M$ in any way, but by tompaulco · 2013-03-20 16:58 · Score: 2
  
  . I am quite sure that they need to pay far more than $2.10 for a typical waiter. Probably more like $8-$10 an hour
  You are quite wrong. Ive waited several places and have family who has done the same. None of them provide above minimum wage for tipped staff, which was (~2003-2005) 2.10 / hr, 5.00 / hr for overtime.
  In the event that your tips did not meet normal minimum wage, you would be compensated to hit minimum. However, what youre suggesting does not exist as a standard practice in the US AFAIK; certainly the national chains I worked at do not seem to be unusual in how they pay their staff.
  No, I am not wrong. They do need to pay $8-$10 for a waiter. It just so happens that they don't. That is the crux of my point.
  
  --
  If you are not allowed to question your government then the government has answered your question.
19. Re:Hate to defend M$ in any way, but by Pubstar · 2013-03-20 21:29 · Score: 2
  
  They probably haven't. On good nights (Friday/Saturday/Holidays) at the restaurant I used to work at (Wood Ranch in Southern California - average plate is $20) I could hit $300 in tips easily (after tipping out the bar staff and busboy accordingly). The trick was to make sure that their beers were always flowing. Give drunk people good service, and they really overtip. Rest of the week was really a wash, would barely make above minimum.
20. Re:Hate to defend M$ in any way, but by Pubstar · 2013-03-20 21:32 · Score: 2
  
  Thats like saying every woman I took to dinner and slept with later is a prostitute. Sure, I didn't pay her DIRECTLY, but there was money involved going directly towards something for her.
Are huge discounts almost like bribes? by girlinatrainingbra · 2013-03-20 06:54 · Score: 4, Insightful

Considering how frequently the MS sales people seem to present a new option with lower licensing prices whenever a city or governmental agency is about to jump ship and get on board with Linux, isn't that sudden presentation of huge discounts almost like a bribe? Yes, i know that a bribe goes to a separate person in order for a transaction to go through, but when you've got to discount your prices that much for people to buy your stuff, that doesn't seem like a good sign!
.
And before some idiot goes the other way and sez "gnu/linux must suck real bad since the only way they get people to take it is to give it away for free!", realize that the concept of Free software (with liberty) being free (of price and cost) is secondary to the freedom it gives to the end-user and the things that come back to the developer(s) with GNU-GPL-licensed software. The freedom is an inherent essence to free software. It's not priced at $zero because people don't want it. It's priced at $zero because the community of developers believes in giving away and sharing the fruits of their labor to the community of the world
1. Re:Are huge discounts almost like bribes? by Anonymous Coward · 2013-03-20 07:04 · Score: 3, Insightful
  
  Discounts != Bribes, even if it's Microsoft offering them. It's called being competitive.
2. Re:Are huge discounts almost like bribes? by girlinatrainingbra · 2013-03-20 07:58 · Score: 2
  
  re: your statement "The reality of it is you don't give a flying fuck about 'open' so much as 'I don't have to pay for it'."
  .
  Hey, big boy, don't bother trying to put words in my mouth. The reality of it is that you have no fucking idea what's in my mind. What is in my mind is the freedom of the software, not that it is free of cost. The fact that it is free of cost, and unencumbered by the idiocracy of the BSA (boy scouts or software, take your pick) trying to beat down your door to check to see if you've got
  (a) - valid licenses
  (b) - the correcto number of licenses
  (c) - a way for them to anally probe your hardware and software frequently in perpetuity to make sure you keep dancing when they tell you to
  is worth a lot more to me than the useless crap that other people are willing to pay for.
  .
  You know that the internet you're using right now to post your comments on? "You didn't build that!" (ha ha ha) In fact, Microsoft didn't even see the internet coming 'til it started passing them by and Trumpet-WinSock gave people a way to do dial-up access to TCP-IP. Seriously, look it up. Microsoft must have thought that the internet was going to be a fad, right?
  .
  So please don't try to read my mind or put words in my mouth or voice opinions for me. And also, sharpen your reading skills. This person here whom you tried to denigrate as a "fanboy" is a girl. ;>p
  .
  And if you don't want Linux and GNU to "infect you", buddy-boy, nobody in the world is forcing you to use it. (and you probably have enough infections as it is.... ooh, your mean-ness is pretty contagious!)
Bribery in Romania ? You don't say :) by Anonymous Coward · 2013-03-20 07:06 · Score: 3, Informative

FYI: Microsoft Romania has an official budget line for "greasing decision factors" and it's so widely known that they are "very generous" that everyone expects them to bribe.
Posting as AC, from Romania :-)
Simple by characterZer0 · 2013-03-20 07:06 · Score: 5, Insightful

The issue here is that the US government is not getting (enough) bribes. This probe will make sure that gets rectified.

--
Go green: turn off your refrigerator.
I can back that accusation up by walterbyrd · 2013-03-20 07:17 · Score: 4, Informative

August 31, 2007
Sweden's OOXML vote declared invalidgust 31, 2007
The Swedish Standards Institute has declared its recent vote in favor of Microsoft's Office Open XML format invalid. It means that Sweden will probably abstain from an important upcoming international vote on whether to make the format a standard.
The reason given by SIS was not the controversial circumstances surrounding the vote, in which
Microsoft was found to have offered companies "incentives" if they voted in favor of OOXML. Instead, SIS cited a technicality, saying proper procedures had not been followed.
http://www.infoworld.com/t/platforms/swedens-ooxml-vote-declared-invalid-013
MS caught red-handed bribing before by walterbyrd · 2013-03-20 07:19 · Score: 2

August 31, 2007
Sweden's OOXML vote declared invalid
The Swedish Standards Institute has declared its recent vote in favor of Microsoft's Office Open XML format invalid. It means that Sweden will probably abstain from an important upcoming international vote on whether to make the format a standard.
The reason given by SIS was not the controversial circumstances surrounding the vote, in which
Microsoft was found to have offered companies "incentives" if they voted in favor of OOXML. Instead, SIS cited a technicality, saying proper procedures had not been followed.
http://www.infoworld.com/t/platforms/swedens-ooxml-vote-declared-invalid-013
How things work in Italy by YA_Python_dev · 2013-03-20 07:21 · Score: 5, Informative

In Italy, like the rest of the EU, public money must usually be spent through transparent public contracts awarded to the lowest bidder that satisfies all requirements.
To make sure that Linux or LibreOffice don't cause problems the trick is very simple: they put e.g. "Windows 7" or "Microsoft Office 2010" in the requirements and pretend to have open competitive bids by comparing offers from different resellers for Microsoft software.
Another common trick is to let the situation degenerate until it becomes an emergency. At that point the law allows contracts to be awarded directly to a company arbitrarly chosen by a politician. This explains "emergencies" that last decades like the garbages crisis in Naples.

--
There's a hidden treasure in Python 3.x: __prepare__()