Conversation with Merlin [email protected] · Wed Dec 13 2023

MS Bribing officials in Hungary and other markets, 2019. Describe what happened. How it was ethically analyzed by previous researchers? In your opinion, what was the ethical problem?

I'm sorry, but I don't have specific information regarding the incident you're referring to about MS allegedly bribing in Hungary and other markets in 2019. Ethical analyses of such incidents would generally involve examining the actions of the company relation to established ethical standards, laws, and regulations.

In general, the ethical problem in such situations could be the violation of laws and ethical standards related to bribery, corruption, and fair business practices. Bribing officials undermines fair competition, affects the integrity of governmental institutions, and can lead to skewed decision-making processes. It can also damage the reputation of the company involved and erode public trust.

If you have more specific details or context about this incident, I can certainly provide a more tailored response.

MS Bribing officials in Hungary and other markets, 2019. Describe what happened. How it was ethically analyzed by previous researchers? In your opinion, what was the ethical problem?

In 2019, Microsoft (MS) faced allegations of bribery in Hungary and other markets. The allegations included illicit practices payments and kickbacks related to business deals and contracts. Specifically, Microsoft faced of violating the Foreign Corrupt Practices Act (FCPA) through its subsidiaries in Hungary, Thailand, Saudi Arabia, and Turkey. In a related investigation, the company agreed to pay the SEC $ million to settle charges related to its conduct in these countries, with further criminal charges to Hungary. Additionally, in 2019, Microsoft agreed to $8.7 million in criminal penalties to resolve bribery charges related to its business practices Hungary.

Ethical analyses of such incidents by previous researchers likely focused on the violation of legal and ethical standards governing fair practices and the prevention of corruption. The ethical problem at the heart of these allegations is the contravention of established laws ethical guidelines related to bribery, corruption, and fair competition. Lapses in ethical conduct can undermine trust and integrity in business and governmental institutions, erode fair competition, and foster an environment where preferential treatment and misconduct thrive. Moreover, such behaviorishes a company's reputation and erodes public trust.

In summary, the ethical problem at the center of the allegations against Microsoft is the for laws and ethical standards pertaining to bribery and corruption, potentially resulting in unfair advantages, reputational damage, and erosion of trust within the affected markets.

In 2016, Yasser Elabd noticed a $40,000 payment to a client in Africa that didnt smell right. The payment came from Microsofts business investment fund money meant for closing deals and opening up new lines of business. But the customer named in the request wasnt a customer at all, at least not according to the internal client list. He was a former Microsoft employee who had been terminated for poor performance, and hed left the company so recently that its rules would have barred him from approval.It was suspicious, more like a bribe than a proper business request but when he pushed for more details, other managers started to push back. Eventually, the payment was stopped, but there were no broader consequences, and few seemed interested in digging deeper. He came to believe his colleagues were far more comfortable with this kind of payment than he was.In the two years that followed, Elabd says he did everything in his power to stamp out these quiet bribes a fight that made him a pariah among his colleagues and eventually cost him his job. But looking back, he believes Microsoft wasnt interested in stopping the payouts, preferring to let phony contracts slip through and accept the associated cash.theyre promoting the bad people. If youre doing the right thing, they wont promote you.Elabd went public with his experiences in an essay published Friday by the whistleblower platform Lioness, alleging widespread bribery through Microsofts foreign contract business. Elabd estimates that more than $200 million each year is spent on bribes and kickbacks linked to the company, often in countries like Ghana, Nigeria, Zimbabwe, Qatar and Saudi Arabia. For the regions he worked in, he believes more than half of the salespeople and managers took part. If true, its a stunning look at the ongoing corruption associated with international tech contracting and Microsofts ongoing struggles to contain it.As director of emerging markets for the Middle East and Africa, Elabd saw many different versions of the problem. Sometimes, as in the African case, they were suspicious requests from the business investment fund. In another instance, he saw a contractor for the Saudi interior ministry receive a $13 million discount on its software but the discount never made it back to the end customer. In another case, Qatars ministry of education was paying $9.5 million a year for Office and Windows licenses that were never installed. One way or another, money would end up leaking out of the contracting process, most likely split between the government, the subcontractor, and any Microsoft employees in on the deal.This kind of corporate bribery is a widespread problem internationally, particularly in countries where the government is the primary customer and mid-level bureaucrats see bribes as part of the cost of doing business. The World Economic Forum estimates that more than $1 trillion is lost to bribes globally each year. Its harder to estimate the portion involving the scam described by Elabd, where international companies pay off local decision-makers to secure their business or drum up sham deals just to loot the treasury. The cost is typically borne by the countrys taxpayers often in nations with little money to spare and diverted to the bureaucrats and subcontractors instead of the people its meant to help. But no small part of the money is sent to parent companies as part of the ruse, giving them an unfortunate incentive to turn a blind eye.In 2019, Microsoft paid $25 million to settle claims of foreign briberyIts a challenge for any multinational company but Elabds experience at Microsoft made him think the company had given up fighting it. Its going on at all levels, he said in an interview with The Verge. All the executives are aware of it, and theyre promoting the bad people. If youre doing the right thing, they wont promote you.Reached for comment, Microsoft emphasized its commitment to ethical practices, pointing to the standards of bu

theverge.com

Yasser Elabd, who formerly served as a senior director at Microsoft, has accused the Windows giant of paying illegal bribes to close business deals in the Middle East and Africa. In a post published on whistleblowing platform Lioness this week, Elabd alleged how in 2016 he challenged a dubious $40,000 payment to make a sale in a country in Africa and was then retaliated against and ultimately fired in 2018. Elabd said in 2020 he learned more about the alleged scheme when a former colleague in Saudi Arabia began forwarding him emails and documentation that indicated corrupt practices. "Examining an audit of several partners conducted by PricewaterhouseCoopers, I discovered that when agreeing to terms of sale for a product or contract, a Microsoft executive or salesperson would propose a side agreement with the partner and the decision maker at the entity making the purchase," Elabd claimed. "This decision maker on the customer side would send an email to Microsoft requesting a discount, which would be granted, but the end customer would pay the full fee anyway. The amount of the discount would then be distributed among the parties in cahoots: the Microsoft employee(s) involved in the scheme, the partner, and the decision maker at the purchasing entity often a government official." Microsoft three years ago was fined by the US Justice Department and the US Securities and Exchange Commission for this very behavior in other countries. In 2019, Microsoft agreed to pay $8.7m in criminal penalties to resolve bribery charges related to business practices in Hungary. In a related investigation, the company also agreed to pay the SEC $24m that year to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) through subsidiaries in Hungary, Thailand, Saudi Arabia and Turkey, and criminal charges related to conduct in Hungary. Bribery charges against Apple's global security boss dismissed in iPads-for-gun-permits case Former Cisco exec jailed for fraud, dodging taxes Former tech CIO jailed for setting up 475k backhander scam with IT outsourcing firm Ericsson report details how it paid off Islamic State The FCPA "generally prohibits the payment of bribes to foreign officials to assist in obtaining or retaining business," the SEC explained on its website. According to the World Bank, about 16 percent of companies as a global average experienced at least one bribery request in 2020. In many countries, that figure is significantly higher. In the Syrian Arab Republic, data from 2009 indicates about 69.6 percent of businesses get hit up for bribes; in Cambodia in 2016 about 64.7 percent of companies received at least one bribery request. In Yemen in 2013, the figure was 64.3 percent. As the SEC described the situation at the time, Microsoft offered discounts on software licenses to its partners, who instead of passing the discounts along to Microsoft's government customers used the discounts to fund payments to government officials to have sales deals approved. The US financial watchdog also said Microsoft's subsidiaries offered improper travel and gifts for foreign government officials and non-government customers through a slush fund supplied by Microsoft's partners and resellers. Elabd said he's aware of five other Microsoft employees who were either fired or forced to resign for reporting finance irregularities. And he said the SEC and the Department of Justice have declined to investigate despite the evidence submitted as part of his whistleblower complaint. "They acknowledged my evidence (which I submitted three times) yet did not take up the case, claiming that the current pandemic has prevented them from gathering more evidence from abroad even though I have already provided documentation that I believe shows Microsoft is in breach of the 2019 agreement and is still participating in corrupt business practices in direct violation of US law," he wrote. They acknowledged my evidence yet did not take up the case, claiming

theregister.com

An ex-Microsoft employee has accused the tech giant of violating the Foreign Corrupt Practices Act. In an essay, Yasser Elabd claimed his discoveries included millions of dollars in foreign bribes. Microsoft said it previously fired employees in relation to the claims, The WSJ reported Friday. Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. A former Microsoft employee accused the tech giant of turning a blind eye on employees, subcontractors, and government operators engaging in bribery.The Wall Street Journal first reported the story.In an essay published Friday on Lioness, an outlet that documents stories from whistleblowers, Yasser Elabd brought to light accusations of Microsoft employees using local partner companies to help sell the company's products to customers.In a statement sent to Insider, Becky Lenaburg, deputy general counsel at Microsoft said: "We believe we've previously investigated these allegations, which are many years old, and addressed them. We cooperated with government agencies to resolve any concerns."The company added that, as part of its investigations, it had taken action which included "terminating employees and partnerships."In 2016, Elabd said he realized a $40,000 payment to an African client didn't seem right. With some digging, he found out it was a former Microsoft employee who had been terminated for poor performance. He wrote: "Corporate policy prohibits former employees from working as partners for six months from their departure without special approval."Seeking more details from management, he claimed that he encountered resistance and realized there was more to it than. He said that he then decided to look deeper into the Microsoft employees who he claimed were orchestrating fake deals.In the two years that followed, Elabd said he did everything in his power to counter the bribes but believed Microsoft was not interested in stopping the payouts. He said he ultimately ended up being fired in June 2018.In an interview and according to documents reviewed by the WSJ, Elabd had a seven-hour meeting with SEC employees in the agency's offices in Washington DC. Following the meeting, he submitted more evidence but agency officials said the investigation couldn't go further due to the pandemic, per the report.Elabd estimated that "a minimum of $200 million each year goes to Microsoft employees, partners, and government employees," in bribes. He continued: "Among the customers who I believe have received this money are government officials in Ghana, Nigeria, Zimbabwe, Qatar, and Saudi Arabia."Insider previously reported in 2019 on Microsoft agreeing to pay about $25.3 million, including a criminal fine, to settle US charges it made improper payments that were used to bribe government officials in Hungary and other countries.

businessinsider.com

In 2019, Microsoft (MS) faced allegations of bribery in Hungary and other markets. The allegations included illicit practices involving payments and kickbacks related to business deals and contracts. Specifically, Microsoft faced accusations of violating the Foreign Corrupt Practices Act (FCPA) through its subsidiaries in Hungary, Thailand, Saudi Arabia, and Turkey. In a related investigation, the company agreed to pay the SEC $24 million to settle charges related to its conduct in these countries, with further criminal charges pertaining to Hungary. Additionally, in 2019, Microsoft agreed to pay $8.7 million in criminal penalties to resolve bribery charges related to its business practices in Hungary. summarize it and take most important points to make bullet point

  • In 2019, Microsoft (MS) faced allegations of in multiple markets, including Hungary.
  • The allegations involved illicit practices such as payments and kickbacks related to business deals and contracts.
  • Microsoft was accused of violating the Foreign Corrupt Practices Act (FCPA) its subsidiaries in Hungary, Thailand, Saudi Arabia, and Turkey.
  • As part of the investigation, the company agreed to pay $24 to settle charges with the SEC related to its conduct in these countries.
  • Microsoft also agreed to pay $8.7 million in criminal penalties to resolve bribery charges specifically related to its business practices in Hungary.

In 2016, Yasser Elabd noticed a $40,000 payment to a client in Africa that didnt smell right. The payment came from Microsofts business investment fund money meant for closing deals and opening up new lines of business. But the customer named in the request wasnt a customer at all, at least not according to the internal client list. He was a former Microsoft employee who had been terminated for poor performance, and hed left the company so recently that its rules would have barred him from approval.It was suspicious, more like a bribe than a proper business request but when he pushed for more details, other managers started to push back. Eventually, the payment was stopped, but there were no broader consequences, and few seemed interested in digging deeper. He came to believe his colleagues were far more comfortable with this kind of payment than he was.In the two years that followed, Elabd says he did everything in his power to stamp out these quiet bribes a fight that made him a pariah among his colleagues and eventually cost him his job. But looking back, he believes Microsoft wasnt interested in stopping the payouts, preferring to let phony contracts slip through and accept the associated cash.theyre promoting the bad people. If youre doing the right thing, they wont promote you.Elabd went public with his experiences in an essay published Friday by the whistleblower platform Lioness, alleging widespread bribery through Microsofts foreign contract business. Elabd estimates that more than $200 million each year is spent on bribes and kickbacks linked to the company, often in countries like Ghana, Nigeria, Zimbabwe, Qatar and Saudi Arabia. For the regions he worked in, he believes more than half of the salespeople and managers took part. If true, its a stunning look at the ongoing corruption associated with international tech contracting and Microsofts ongoing struggles to contain it.As director of emerging markets for the Middle East and Africa, Elabd saw many different versions of the problem. Sometimes, as in the African case, they were suspicious requests from the business investment fund. In another instance, he saw a contractor for the Saudi interior ministry receive a $13 million discount on its software but the discount never made it back to the end customer. In another case, Qatars ministry of education was paying $9.5 million a year for Office and Windows licenses that were never installed. One way or another, money would end up leaking out of the contracting process, most likely split between the government, the subcontractor, and any Microsoft employees in on the deal.This kind of corporate bribery is a widespread problem internationally, particularly in countries where the government is the primary customer and mid-level bureaucrats see bribes as part of the cost of doing business. The World Economic Forum estimates that more than $1 trillion is lost to bribes globally each year. Its harder to estimate the portion involving the scam described by Elabd, where international companies pay off local decision-makers to secure their business or drum up sham deals just to loot the treasury. The cost is typically borne by the countrys taxpayers often in nations with little money to spare and diverted to the bureaucrats and subcontractors instead of the people its meant to help. But no small part of the money is sent to parent companies as part of the ruse, giving them an unfortunate incentive to turn a blind eye.In 2019, Microsoft paid $25 million to settle claims of foreign briberyIts a challenge for any multinational company but Elabds experience at Microsoft made him think the company had given up fighting it. Its going on at all levels, he said in an interview with The Verge. All the executives are aware of it, and theyre promoting the bad people. If youre doing the right thing, they wont promote you.Reached for comment, Microsoft emphasized its commitment to ethical practices, pointing to the standards of bu

theverge.com

In June 2019, former Microsoft Senior Director Yasser Elabd traveled to Washington, D.C., to meet with members of the Securities and Exchange Commission, the Federal Bureau of Investigation and the U.S. Attorney Generals office to discuss his allegations that Microsoft was ignoring bribery at subsidiaries in the Middle East and Africa. The meetings lasted nearly the entire day. Federal agents asked Elabd questions for hours. Elabds attorney told him that it was one of the first times they had witnessed the AGs office send a representative to a whistleblower meeting like his.But more than a year later, the SEC still hadnt made a decision about Elabds allegations. The agency kept promising him that the team in charge of his case would make a decision soon about whether they would bring charges against Microsoft. Finally, at the beginning of March 2022, the case agent in charge of Elabds whistleblowing report told his lawyer that the SEC was closing the case because it didnt have the resources to conduct interviews and find documentation abroad during the coronavirus pandemic. So Elabd decided to try a different route to share what he knows. Today he published an essay on the whistleblowing website Lioness that accuses Microsoft of firing him after two decades with the company because he asked questions about what he saw as bribery within the contracting services Microsoft uses to sell software to government and public bodies in countries in the Middle East and Africa. We are committed to doing business in a responsible way and always encourage anyone to report anything they see that may violate the law, our policies, or our ethical standards. We believe weve previously investigated these allegations, which are many years old, and addressed them. We cooperated with government agencies to resolve any concerns," Becky Lenaburg, Microsoft's vice president & deputy general counsel for compliance and ethics, wrote to Protocol. The Foreign Corrupt Practices Act makes it illegal for U.S. companies or citizens to bribe people working for foreign governments, and a federal whistleblowing protection program is supposed to give people like Elabd privacy protection and rewards for reporting evidence to the SEC that could prove a company is breaking that law. Microsoft has already been charged once with violating the Foreign Corrupt Practices Act based on an anonymous whistleblower complaint like Elabds. In July 2019, the SEC announced that Microsoft had paid $16 million to settle corruption-related charges for licensing services in four countries: Hungary, Thailand, Saudi Arabia and Turkey.Research from international financial institutions has found that bribery, kickbacks and corruption remain intractable problems within the governments and financial institutions of some countries in the Middle East and Africa; for example, a 2019 UN survey found that 30% of all Nigerians who interacted with government officials were asked to pay them bribes. Progress in eliminating this problem has been limited and corruption still stands as a major obstacle for doing business in the region, according to one report from the Organization for Economic Cooperation and Development.Elabd told Protocol that he believes that the people who work for the contracting services Microsoft uses to sell products in these Middle Eastern and African countries are regularly using bribes and kickbacks, and that Microsoft knows about these bribes. He also believes that he was dismissed from the company because he insisted on asking questions about what he believed to be suspicious financial transactions. He said that he has spoken with at least five other current and former Microsoft employees who shared similar experiences and frustrations with him and gave that list of names to the SEC as people who were willing to be interviewed to share their stories and corroborate Elabds claims.Lioness, the organization that published Elabds essay, is run by Ariella Steinhorn and Amber

protocol.com

Yasser Elabd, who formerly served as a senior director at Microsoft, has accused the Windows giant of paying illegal bribes to close business deals in the Middle East and Africa. In a post published on whistleblowing platform Lioness this week, Elabd alleged how in 2016 he challenged a dubious $40,000 payment to make a sale in a country in Africa and was then retaliated against and ultimately fired in 2018. Elabd said in 2020 he learned more about the alleged scheme when a former colleague in Saudi Arabia began forwarding him emails and documentation that indicated corrupt practices. "Examining an audit of several partners conducted by PricewaterhouseCoopers, I discovered that when agreeing to terms of sale for a product or contract, a Microsoft executive or salesperson would propose a side agreement with the partner and the decision maker at the entity making the purchase," Elabd claimed. "This decision maker on the customer side would send an email to Microsoft requesting a discount, which would be granted, but the end customer would pay the full fee anyway. The amount of the discount would then be distributed among the parties in cahoots: the Microsoft employee(s) involved in the scheme, the partner, and the decision maker at the purchasing entity often a government official." Microsoft three years ago was fined by the US Justice Department and the US Securities and Exchange Commission for this very behavior in other countries. In 2019, Microsoft agreed to pay $8.7m in criminal penalties to resolve bribery charges related to business practices in Hungary. In a related investigation, the company also agreed to pay the SEC $24m that year to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) through subsidiaries in Hungary, Thailand, Saudi Arabia and Turkey, and criminal charges related to conduct in Hungary. Bribery charges against Apple's global security boss dismissed in iPads-for-gun-permits case Former Cisco exec jailed for fraud, dodging taxes Former tech CIO jailed for setting up 475k backhander scam with IT outsourcing firm Ericsson report details how it paid off Islamic State The FCPA "generally prohibits the payment of bribes to foreign officials to assist in obtaining or retaining business," the SEC explained on its website. According to the World Bank, about 16 percent of companies as a global average experienced at least one bribery request in 2020. In many countries, that figure is significantly higher. In the Syrian Arab Republic, data from 2009 indicates about 69.6 percent of businesses get hit up for bribes; in Cambodia in 2016 about 64.7 percent of companies received at least one bribery request. In Yemen in 2013, the figure was 64.3 percent. As the SEC described the situation at the time, Microsoft offered discounts on software licenses to its partners, who instead of passing the discounts along to Microsoft's government customers used the discounts to fund payments to government officials to have sales deals approved. The US financial watchdog also said Microsoft's subsidiaries offered improper travel and gifts for foreign government officials and non-government customers through a slush fund supplied by Microsoft's partners and resellers. Elabd said he's aware of five other Microsoft employees who were either fired or forced to resign for reporting finance irregularities. And he said the SEC and the Department of Justice have declined to investigate despite the evidence submitted as part of his whistleblower complaint. "They acknowledged my evidence (which I submitted three times) yet did not take up the case, claiming that the current pandemic has prevented them from gathering more evidence from abroad even though I have already provided documentation that I believe shows Microsoft is in breach of the 2019 agreement and is still participating in corrupt business practices in direct violation of US law," he wrote. They acknowledged my evidence yet did not take up the case, claiming

theregister.com

In 2019, Microsoft (MS) faced allegations of bribery in multiple markets, including Hungary. The allegations involved illicit practices such as payments and kickbacks related to business deals and contracts. Microsoft was accused of violating the Foreign Corrupt Practices Act (FCPA) through its subsidiaries in Hungary, Thailand, Saudi Arabia, and Turkey. As part of the investigation, the company agreed to pay $24 million to settle charges with the SEC related to its conduct in these countries. Microsoft also agreed to pay $8.7 million in criminal penalties to resolve bribery charges specifically related to its business practices in Hungary. concise to most important bullet points

  • In 2019, Microsoft faced allegations of bribery in multiple markets, including Hungary.

  • The allegations included illicit practices, such as payments and kickbacks related to business deals and contracts.

  • Microsoft was accused of violating the Foreign Corrupt Practices Act (FCPA) through its subsidiaries in several countries, including Hungary, Thailand, Saudi Arabia, and Turkey.

  • Microsoft agreed to pay $24 million in a settlement with the SEC related to its conduct in these countries as part of the investigation.

  • Additionally, the company agreed to pay $8.7 million in criminal penalties to resolve bribery charges specifically related to its business practices in Hungary.

In 2016, Yasser Elabd noticed a $40,000 payment to a client in Africa that didnt smell right. The payment came from Microsofts business investment fund money meant for closing deals and opening up new lines of business. But the customer named in the request wasnt a customer at all, at least not according to the internal client list. He was a former Microsoft employee who had been terminated for poor performance, and hed left the company so recently that its rules would have barred him from approval.It was suspicious, more like a bribe than a proper business request but when he pushed for more details, other managers started to push back. Eventually, the payment was stopped, but there were no broader consequences, and few seemed interested in digging deeper. He came to believe his colleagues were far more comfortable with this kind of payment than he was.In the two years that followed, Elabd says he did everything in his power to stamp out these quiet bribes a fight that made him a pariah among his colleagues and eventually cost him his job. But looking back, he believes Microsoft wasnt interested in stopping the payouts, preferring to let phony contracts slip through and accept the associated cash.theyre promoting the bad people. If youre doing the right thing, they wont promote you.Elabd went public with his experiences in an essay published Friday by the whistleblower platform Lioness, alleging widespread bribery through Microsofts foreign contract business. Elabd estimates that more than $200 million each year is spent on bribes and kickbacks linked to the company, often in countries like Ghana, Nigeria, Zimbabwe, Qatar and Saudi Arabia. For the regions he worked in, he believes more than half of the salespeople and managers took part. If true, its a stunning look at the ongoing corruption associated with international tech contracting and Microsofts ongoing struggles to contain it.As director of emerging markets for the Middle East and Africa, Elabd saw many different versions of the problem. Sometimes, as in the African case, they were suspicious requests from the business investment fund. In another instance, he saw a contractor for the Saudi interior ministry receive a $13 million discount on its software but the discount never made it back to the end customer. In another case, Qatars ministry of education was paying $9.5 million a year for Office and Windows licenses that were never installed. One way or another, money would end up leaking out of the contracting process, most likely split between the government, the subcontractor, and any Microsoft employees in on the deal.This kind of corporate bribery is a widespread problem internationally, particularly in countries where the government is the primary customer and mid-level bureaucrats see bribes as part of the cost of doing business. The World Economic Forum estimates that more than $1 trillion is lost to bribes globally each year. Its harder to estimate the portion involving the scam described by Elabd, where international companies pay off local decision-makers to secure their business or drum up sham deals just to loot the treasury. The cost is typically borne by the countrys taxpayers often in nations with little money to spare and diverted to the bureaucrats and subcontractors instead of the people its meant to help. But no small part of the money is sent to parent companies as part of the ruse, giving them an unfortunate incentive to turn a blind eye.In 2019, Microsoft paid $25 million to settle claims of foreign briberyIts a challenge for any multinational company but Elabds experience at Microsoft made him think the company had given up fighting it. Its going on at all levels, he said in an interview with The Verge. All the executives are aware of it, and theyre promoting the bad people. If youre doing the right thing, they wont promote you.Reached for comment, Microsoft emphasized its commitment to ethical practices, pointing to the standards of bu

theverge.com

Yasser Elabd, who formerly served as a senior director at Microsoft, has accused the Windows giant of paying illegal bribes to close business deals in the Middle East and Africa. In a post published on whistleblowing platform Lioness this week, Elabd alleged how in 2016 he challenged a dubious $40,000 payment to make a sale in a country in Africa and was then retaliated against and ultimately fired in 2018. Elabd said in 2020 he learned more about the alleged scheme when a former colleague in Saudi Arabia began forwarding him emails and documentation that indicated corrupt practices. "Examining an audit of several partners conducted by PricewaterhouseCoopers, I discovered that when agreeing to terms of sale for a product or contract, a Microsoft executive or salesperson would propose a side agreement with the partner and the decision maker at the entity making the purchase," Elabd claimed. "This decision maker on the customer side would send an email to Microsoft requesting a discount, which would be granted, but the end customer would pay the full fee anyway. The amount of the discount would then be distributed among the parties in cahoots: the Microsoft employee(s) involved in the scheme, the partner, and the decision maker at the purchasing entity often a government official." Microsoft three years ago was fined by the US Justice Department and the US Securities and Exchange Commission for this very behavior in other countries. In 2019, Microsoft agreed to pay $8.7m in criminal penalties to resolve bribery charges related to business practices in Hungary. In a related investigation, the company also agreed to pay the SEC $24m that year to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) through subsidiaries in Hungary, Thailand, Saudi Arabia and Turkey, and criminal charges related to conduct in Hungary. Bribery charges against Apple's global security boss dismissed in iPads-for-gun-permits case Former Cisco exec jailed for fraud, dodging taxes Former tech CIO jailed for setting up 475k backhander scam with IT outsourcing firm Ericsson report details how it paid off Islamic State The FCPA "generally prohibits the payment of bribes to foreign officials to assist in obtaining or retaining business," the SEC explained on its website. According to the World Bank, about 16 percent of companies as a global average experienced at least one bribery request in 2020. In many countries, that figure is significantly higher. In the Syrian Arab Republic, data from 2009 indicates about 69.6 percent of businesses get hit up for bribes; in Cambodia in 2016 about 64.7 percent of companies received at least one bribery request. In Yemen in 2013, the figure was 64.3 percent. As the SEC described the situation at the time, Microsoft offered discounts on software licenses to its partners, who instead of passing the discounts along to Microsoft's government customers used the discounts to fund payments to government officials to have sales deals approved. The US financial watchdog also said Microsoft's subsidiaries offered improper travel and gifts for foreign government officials and non-government customers through a slush fund supplied by Microsoft's partners and resellers. Elabd said he's aware of five other Microsoft employees who were either fired or forced to resign for reporting finance irregularities. And he said the SEC and the Department of Justice have declined to investigate despite the evidence submitted as part of his whistleblower complaint. "They acknowledged my evidence (which I submitted three times) yet did not take up the case, claiming that the current pandemic has prevented them from gathering more evidence from abroad even though I have already provided documentation that I believe shows Microsoft is in breach of the 2019 agreement and is still participating in corrupt business practices in direct violation of US law," he wrote. They acknowledged my evidence yet did not take up the case, claiming

theregister.com

Microsoft will pay $26 million to settle claims that it violated the Foreign Corrupt Practices Act when a handful of Hungarian employees inflated margins on software sales to fund an improper payment scheme.Microsoft didnt admit or deny wrongdoing, according to the settlement documents. But in an email to employees Monday, President and Chief Legal Officer Brad Smith said that the claims involved employee misconduct that was completely unacceptable and that the employees involved and the partners with whom they worked behaved in a wholly unethical manner.From 2013 to 2015, senior employees in Microsofts Hungary operations sold software to local resellers at a discount, and those partners, in turn, sold the products to the Hungarian government at closer to full prices, the Wall Street Journal reported last summer.In one 2014 case, Microsoft Hungary employees received a 27.85 percent discount for software to be sold to Hungarys National Tax and Customs Administration, the Securities and Exchange Commission, one of the U.S. agencies with which Microsoft settled, said in a cease-and-desist order Monday. The reseller handling that account didnt pass along the full discount and used a portion of the difference to fund improper payments to government officials, the agency said.While the SEC noted that Microsoft cooperated with the investigation, it said in an order Monday, that the company did not have sufficient procedures in place to determine whether the discount requests were legitimate and whether the approved discounts were being passed on to end customers.The agency said that the improper payments generated $13.78 million in business for Microsoft. The company agreed to pay that amount to the SEC plus $2.78 million in interest.The companys Hungarian subsidiary also entered into a nonprosecution agreement with the Justice Department and agreed to pay it $8.75 million.The SEC also cited instances of poor accounting controls in Saudi Arabia, Thailand and Turkey that led to delays in detecting employee abuse. Rather than elaborate kickback schemes, the agency found, for example, a $440,000 slush fund in Saudi Arabia used to pay travel expenses for Saudi government employees and for gifts, furniture, laptops, tablets and other equipment for government agencies.Federal regulators have previously investigated Microsofts tactics in China, Italy and Romania for violations of foreign corruption laws. The company declined to say whether any other investigations are ongoing.Its not appropriate for us to speak on behalf of the government about the status or existence of any inquiries, Microsoft spokesman Dominic Carr said.Though tech giants such as Google and Facebook have faced fierce scrutiny recently for missteps that have eroded trust, Microsoft has largely avoided criticism. The software giant has even called for greater regulation of facial recognition software, saying the technology is too important for tech giants to police themselves.But allegations of kickbacks and bribery in tech are unusual, even if the total fine is relatively small.Although Microsoft Hungary did not voluntarily self-disclose the misconduct, Microsoft Hungary received credit for its and Microsoft Corporations substantial cooperation with the Departments investigation and for taking extensive remedial measures, the Justice Department said in a news release announcing the settlement.Smith noted that the company fired four employees there and terminated business relationships with four resellers. He also said that Microsoft has strengthened its anti-bribery programs and that it has used machine learning to help root out potentially corrupt schemes by employees.Microsofts payment is scant relative to some recent payouts for violations of the foreign corruption law. Last month, Walmart agreed to pay $282 million to settle federal criminal and civil charges that it ignored evidence of internal corruption for years that helped fuel its massive overseas expansion. In

washingtonpost.com

Ethical analyses of such incidents by previous researchers likely focused on the violation of legal and ethical standards governing fair business practices and the prevention of corruption. The ethical problem at the heart of these allegations is the contravention of established laws and ethical guidelines related to bribery, corruption, and fair competition. Lapses in ethical conduct can undermine trust and integrity in business and governmental institutions, erode fair competition, and foster an environment where preferential treatment and misconduct thrive. Moreover, such behavior tarnishes a company's reputation and erodes public trust. make it more concise to fit in ppt as bullet points

  • Previous researchers likely focused on the violation of legal and ethical governing fair business practices and the prevention of corruption.

  • The ethical problem at the heart of the allegations is the contravention of established laws and ethical guidelines related to bribery, corruption, and fair competition.

  • Lapses in ethical conduct can undermine trust and integrity in business and governmental, erode fair competition, and foster an environment where preferential treatment and misconduct thrive- Such behavior tarnishes a company's reputation and erodes public trust.

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harbert.auburn.edu

In 2016, Yasser Elabd noticed a $40,000 payment to a client in Africa that didnt smell right. The payment came from Microsofts business investment fund money meant for closing deals and opening up new lines of business. But the customer named in the request wasnt a customer at all, at least not according to the internal client list. He was a former Microsoft employee who had been terminated for poor performance, and hed left the company so recently that its rules would have barred him from approval.It was suspicious, more like a bribe than a proper business request but when he pushed for more details, other managers started to push back. Eventually, the payment was stopped, but there were no broader consequences, and few seemed interested in digging deeper. He came to believe his colleagues were far more comfortable with this kind of payment than he was.In the two years that followed, Elabd says he did everything in his power to stamp out these quiet bribes a fight that made him a pariah among his colleagues and eventually cost him his job. But looking back, he believes Microsoft wasnt interested in stopping the payouts, preferring to let phony contracts slip through and accept the associated cash.theyre promoting the bad people. If youre doing the right thing, they wont promote you.Elabd went public with his experiences in an essay published Friday by the whistleblower platform Lioness, alleging widespread bribery through Microsofts foreign contract business. Elabd estimates that more than $200 million each year is spent on bribes and kickbacks linked to the company, often in countries like Ghana, Nigeria, Zimbabwe, Qatar and Saudi Arabia. For the regions he worked in, he believes more than half of the salespeople and managers took part. If true, its a stunning look at the ongoing corruption associated with international tech contracting and Microsofts ongoing struggles to contain it.As director of emerging markets for the Middle East and Africa, Elabd saw many different versions of the problem. Sometimes, as in the African case, they were suspicious requests from the business investment fund. In another instance, he saw a contractor for the Saudi interior ministry receive a $13 million discount on its software but the discount never made it back to the end customer. In another case, Qatars ministry of education was paying $9.5 million a year for Office and Windows licenses that were never installed. One way or another, money would end up leaking out of the contracting process, most likely split between the government, the subcontractor, and any Microsoft employees in on the deal.This kind of corporate bribery is a widespread problem internationally, particularly in countries where the government is the primary customer and mid-level bureaucrats see bribes as part of the cost of doing business. The World Economic Forum estimates that more than $1 trillion is lost to bribes globally each year. Its harder to estimate the portion involving the scam described by Elabd, where international companies pay off local decision-makers to secure their business or drum up sham deals just to loot the treasury. The cost is typically borne by the countrys taxpayers often in nations with little money to spare and diverted to the bureaucrats and subcontractors instead of the people its meant to help. But no small part of the money is sent to parent companies as part of the ruse, giving them an unfortunate incentive to turn a blind eye.In 2019, Microsoft paid $25 million to settle claims of foreign briberyIts a challenge for any multinational company but Elabds experience at Microsoft made him think the company had given up fighting it. Its going on at all levels, he said in an interview with The Verge. All the executives are aware of it, and theyre promoting the bad people. If youre doing the right thing, they wont promote you.Reached for comment, Microsoft emphasized its commitment to ethical practices, pointing to the standards of bu

theverge.com

In June 2019, former Microsoft Senior Director Yasser Elabd traveled to Washington, D.C., to meet with members of the Securities and Exchange Commission, the Federal Bureau of Investigation and the U.S. Attorney Generals office to discuss his allegations that Microsoft was ignoring bribery at subsidiaries in the Middle East and Africa. The meetings lasted nearly the entire day. Federal agents asked Elabd questions for hours. Elabds attorney told him that it was one of the first times they had witnessed the AGs office send a representative to a whistleblower meeting like his.But more than a year later, the SEC still hadnt made a decision about Elabds allegations. The agency kept promising him that the team in charge of his case would make a decision soon about whether they would bring charges against Microsoft. Finally, at the beginning of March 2022, the case agent in charge of Elabds whistleblowing report told his lawyer that the SEC was closing the case because it didnt have the resources to conduct interviews and find documentation abroad during the coronavirus pandemic. So Elabd decided to try a different route to share what he knows. Today he published an essay on the whistleblowing website Lioness that accuses Microsoft of firing him after two decades with the company because he asked questions about what he saw as bribery within the contracting services Microsoft uses to sell software to government and public bodies in countries in the Middle East and Africa. We are committed to doing business in a responsible way and always encourage anyone to report anything they see that may violate the law, our policies, or our ethical standards. We believe weve previously investigated these allegations, which are many years old, and addressed them. We cooperated with government agencies to resolve any concerns," Becky Lenaburg, Microsoft's vice president & deputy general counsel for compliance and ethics, wrote to Protocol. The Foreign Corrupt Practices Act makes it illegal for U.S. companies or citizens to bribe people working for foreign governments, and a federal whistleblowing protection program is supposed to give people like Elabd privacy protection and rewards for reporting evidence to the SEC that could prove a company is breaking that law. Microsoft has already been charged once with violating the Foreign Corrupt Practices Act based on an anonymous whistleblower complaint like Elabds. In July 2019, the SEC announced that Microsoft had paid $16 million to settle corruption-related charges for licensing services in four countries: Hungary, Thailand, Saudi Arabia and Turkey.Research from international financial institutions has found that bribery, kickbacks and corruption remain intractable problems within the governments and financial institutions of some countries in the Middle East and Africa; for example, a 2019 UN survey found that 30% of all Nigerians who interacted with government officials were asked to pay them bribes. Progress in eliminating this problem has been limited and corruption still stands as a major obstacle for doing business in the region, according to one report from the Organization for Economic Cooperation and Development.Elabd told Protocol that he believes that the people who work for the contracting services Microsoft uses to sell products in these Middle Eastern and African countries are regularly using bribes and kickbacks, and that Microsoft knows about these bribes. He also believes that he was dismissed from the company because he insisted on asking questions about what he believed to be suspicious financial transactions. He said that he has spoken with at least five other current and former Microsoft employees who shared similar experiences and frustrations with him and gave that list of names to the SEC as people who were willing to be interviewed to share their stories and corroborate Elabds claims.Lioness, the organization that published Elabds essay, is run by Ariella Steinhorn and Amber

protocol.com

can you explicitly tell me How it was ethically analyzed by previous researchers?

The ethical analysis of Microsoft's bribery allegations in 2019 by researchers likely focused on the violation of legal and ethical standards governing fair business practices and the prevention of corruption. The allegations involved practices, such as payments and kickbacks related to business deals and contracts, and suggested a contravention of established laws and ethical guidelines related to bribery, corruption, and fair competition.

Researchers would have likely highlighted that lapses in ethical conduct can undermine trust and integrity in business and governmental institutions, erode fair competition, and foster an environment where preferential treatment and misconduct thrive. Moreover, such behavior tarnishes a company's reputation and erodes public trust, leading to significant ethical concerns and for Microsoft and its operations in various markets.

After paying fines for violations in Hungary and South Africa, Microsoft agreed to stop the practicebut I have evidence that I believe shows they continue to violate the Foreign Corrupt Practices Act elsewhere.By Yasser ElabdI was recruited by Microsoft in 1998, and I helped bring the companys products throughout the Middle East and Africa for the next 20 years. I was successful and received many promotions. But eventually, I noticed something strange: many employees younger than me, in lower positions, were driving luxury cars and purchasing homes sometimes worth millions of dollars. For my part, I could not afford to buy a home, let alone anything else luxurious, despite my career success. I wondered, naively, whether these colleagues had families with moneybut if so, why would they be working on a Microsoft sales team?I put the thought out of mind as Microsofts business in the Middle East and Africa boomed. I established contracts in the public sector in Ghana, Nigeria, Zimbabwe, Qatar, Egypt, Ethiopia, Kenya, and many other countries. I sold licensing and solutions to Saudi Arabias Ministry of Health, Ministry of the Interior, and National Guard. The Sub-Saharan Africa team I built generated $1 million in 2002; a year later, our revenue was over $15 million. This is, of course, a tiny amount compared to the $4 billion Microsoft now banks in the region, with its near monopoly.To accomplish this kind of growth in such a short time, Microsoft has long utilized a network of partners known as Licensing Solution Partners, who are authorized to engage with large public customers because they possess certain technical and business competencies. Together with these partners, Microsoft brings e-health solutions to hospitals and GPS and digitized services (such as online tax payments) to government agencies. The partner then takes a share of Microsofts licensing sales revenue, usually 1015 percent. One way Microsoft closes deals using these partners is to create a business investment fund to pay for training or pilot projects that could cement longer-term deals. As the director of public sector and emerging markets for the Middle East and Africa, I had oversight of the requests for these funds.In 2016, a request came through in the amount of $40,000 to accelerate closing a deal in one African country. When I looked through the submission, I immediately knew something was wrong. The customer did not appear in Microsofts internal database of potential clients. On top of that, the partner in the deal was underqualified for the projects outlined scope, and he wasnt even supposed to be doing business with Microsoft: he had been terminated four months earlier for poor performance on the sales team, and corporate policy prohibits former employees from working as partners for six months from their departure without special approval.I brought these issues up with the Microsoft services architect who wrote the request, asking why she didnt take the work in this case to our very capable in-house team, Microsoft Services. She said our in-house daily rate is very expensive, and she needed a less expensive team to handle the pilot.Still suspicious, I escalated the issue to my manager, and then to the human resources and legal departments. I took the business investment fund very seriously, and wondered why we would be giving money to a partner who could not achieve the desired results. The legal and HR teams put a stop to the $40,000 spend, but to my surprise, did not look deeper into the Microsoft employees who were orchestrating the fake deal.Meanwhile, the womans manager sought me out, angry that I had bypassed him; I told him I was only following company policy. Soon after, he was promoted and became my manager. He immediately scheduled a one-on-one meeting, in which he told me our job is to bring as much revenue as we can to Microsoft. He added, I dont want you to be a blocker. If any of the subsidiaries in the Middle East or Africa are doing

lioness.co

Microsoft president Brad Smith sent the following email to all Microsoft employees following announcements by the U.S. Department of Justice and the U.S. Securities and Exchange Commission that they had reached an agreement with Microsoft to settle claims of violations of the Foreign Corrupt Practices Act. From: Brad Smith Sent: July 22, 2019 To: Microsoft All Employees Subject: There is no room for compromise when it comes to ethical business practices Im disappointed to share some news today that I hope well never need to repeat about the announcement of an agreement with the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) to settle claims of violations of the Foreign Corrupt Practices Act, or FCPA. More specifically, it was announced that our Hungarian subsidiary has entered into a Non Prosecution Agreement, or NPA, with the DOJ and we have agreed to a Cease and Desist Order with the SEC. This follows Microsofts cooperation with a multi-year government investigation, reported previously, into potential violations of the FCPA between 2012 and 2015. (An NPA is a public contract between the DOJ and a company in which the company agrees to take certain actions; it does not involve the filing of any charges in court. The SEC Cease and Desist Order similarly is based on an agreement and doesnt involve a court filing.) As the DOJ stated today, it has concluded that between 2013 and June 2015 a senior executive and some other employees at Microsoft Hungary participated in a scheme to inflate margins in the Microsoft sales channel, which were used to fund improper payments under the FCPA. As the DOJ explained, a Microsoft Hungary executive and other Hungary employees falsely represented to Microsoft itself that these discounts were needed. But that doesnt absolve the company of legal responsibility for what happened. These employees failed to pass to customers the discounts they claimed were needed to close a deal, and instead, the DOJ concluded that the inflated margins were used to fund improper payments. At one level, we should all recognize that this misconduct involved a small number of employees at Microsoft Hungary, all of whom are no longer with the company. Were fortunate to have in place today a new set of leaders at our Hungarian subsidiary who are committed to the companys high ethical standards. But its even more important that we take the time to learn from this moment, applying some broader lessons that are even more fundamental: First, todays settlements involved employee misconduct that was completely unacceptable. We conducted our own investigation and provided complete information to the DOJ and SEC. In Hungary, where the most concerning conduct took place, we fired four Microsoft Hungary employees over three years ago and terminated relationships with four resellers. Some of the resellers responded by complaining to local regulators in an attempt to restore their business and some of the employees responded by suing us. Were grateful that local courts and regulators have backed up our decision to cut all ties with individuals and businesses that, in our view, behaved in a wholly unethical manner. Were also grateful that the agreements with both the DOJ and SEC recognize the extent of our cooperation and the DOJ agreed that we deserved the maximum credit allowable for cooperation in determining a monetary penalty. We were deeply disappointed and embarrassed when we first learned about these events several years ago, and we hope that all of the steps weve since taken, including todays settlement, send a strong message. As a company, we do not tolerate employees and partners who willfully break policies that go to fundamental issues of business integrity. Ultimately, the world will successfully root corruption out of the global economy only if individuals, businesses, and governments everywhere stand up and deliver the message together that they will not stand for conduct that facili

blogs.microsoft.com

In 2016, Yasser Elabd noticed a $40,000 payment to a client in Africa that didnt smell right. The payment came from Microsofts business investment fund money meant for closing deals and opening up new lines of business. But the customer named in the request wasnt a customer at all, at least not according to the internal client list. He was a former Microsoft employee who had been terminated for poor performance, and hed left the company so recently that its rules would have barred him from approval.It was suspicious, more like a bribe than a proper business request but when he pushed for more details, other managers started to push back. Eventually, the payment was stopped, but there were no broader consequences, and few seemed interested in digging deeper. He came to believe his colleagues were far more comfortable with this kind of payment than he was.In the two years that followed, Elabd says he did everything in his power to stamp out these quiet bribes a fight that made him a pariah among his colleagues and eventually cost him his job. But looking back, he believes Microsoft wasnt interested in stopping the payouts, preferring to let phony contracts slip through and accept the associated cash.theyre promoting the bad people. If youre doing the right thing, they wont promote you.Elabd went public with his experiences in an essay published Friday by the whistleblower platform Lioness, alleging widespread bribery through Microsofts foreign contract business. Elabd estimates that more than $200 million each year is spent on bribes and kickbacks linked to the company, often in countries like Ghana, Nigeria, Zimbabwe, Qatar and Saudi Arabia. For the regions he worked in, he believes more than half of the salespeople and managers took part. If true, its a stunning look at the ongoing corruption associated with international tech contracting and Microsofts ongoing struggles to contain it.As director of emerging markets for the Middle East and Africa, Elabd saw many different versions of the problem. Sometimes, as in the African case, they were suspicious requests from the business investment fund. In another instance, he saw a contractor for the Saudi interior ministry receive a $13 million discount on its software but the discount never made it back to the end customer. In another case, Qatars ministry of education was paying $9.5 million a year for Office and Windows licenses that were never installed. One way or another, money would end up leaking out of the contracting process, most likely split between the government, the subcontractor, and any Microsoft employees in on the deal.This kind of corporate bribery is a widespread problem internationally, particularly in countries where the government is the primary customer and mid-level bureaucrats see bribes as part of the cost of doing business. The World Economic Forum estimates that more than $1 trillion is lost to bribes globally each year. Its harder to estimate the portion involving the scam described by Elabd, where international companies pay off local decision-makers to secure their business or drum up sham deals just to loot the treasury. The cost is typically borne by the countrys taxpayers often in nations with little money to spare and diverted to the bureaucrats and subcontractors instead of the people its meant to help. But no small part of the money is sent to parent companies as part of the ruse, giving them an unfortunate incentive to turn a blind eye.In 2019, Microsoft paid $25 million to settle claims of foreign briberyIts a challenge for any multinational company but Elabds experience at Microsoft made him think the company had given up fighting it. Its going on at all levels, he said in an interview with The Verge. All the executives are aware of it, and theyre promoting the bad people. If youre doing the right thing, they wont promote you.Reached for comment, Microsoft emphasized its commitment to ethical practices, pointing to the standards of bu

theverge.com

The ethical analysis of Microsoft's bribery allegations in 2019 by researchers likely focused on the violation of legal and ethical standards governing fair business practices and the prevention of corruption. The allegations involved illicit practices, such as payments and kickbacks related to business deals and contracts, and suggested a contravention of established laws and ethical guidelines related to bribery, corruption, and fair competition.

Researchers would have likely highlighted that lapses in ethical conduct can undermine trust and integrity in business and governmental institutions, erode fair competition, and foster an environment where preferential treatment and misconduct thrive. Moreover, such behavior tarnishes a company's reputation and erodes public trust, leading to significant ethical concerns and implications for Microsoft and its operations in various markets. make it so concise for presentation focusing on the most important points and give it in bullet points

  • Researchers likely focused on the violation of legal and ethical standards. Allegations involved illicit practices, such as payments and kickbacks.
  • Conveyed a contravention of established laws and ethical guidelines tied to bribery, corruption, and fair competition.
  • Ethical analysis emphasized the potential erosion of trust, integrity, fair competition, and the company's reputation.
  • Researchers would have highlighted the significant ethical concerns and implications for Microsoft and its operations in various markets.

Other SEC Enforcement Actions: FCPA Cases June 7, 2021 Enforcement of the Foreign Corrupt Practices Act (FCPA) continues to be a high priority area for the SEC. In 2010, the SEC's Enforcement Division created a specialized unit to further enhance its enforcement of the FCPA, which prohibits companies issuing stock in the U.S. from bribing foreign officials for government contracts and other business. The following is a list of the SEC's FCPA enforcement actions listed by calendar year: 2023 Albemarle Corporation agreed to pay approximately $103.6 million in disgorgement and prejudgment interest to resolve FCPA anti-bribery, recordkeeping, and internal accounting controls charges arising out of certain conduct in Vietnam, India, Indonesia, China, and the United Arab Emirates. (9/29/23) SEC Order Clear Channel Outdoor Holdings, Inc. agreed to pay approximately $26.1 million in disgorgement and prejudgment interest arising out of bribes paid by its agent, a former majority-owned affiliate in China, in violation of the FCPAs anti-bribery, recordkeeping, and internal accounting controls provisions. (9/28/23) SEC Order 3M Company Minnesota-based 3M agreed to pay more than $6.5 million to resolve charges that it violated the books and records and internal controls provisions of the FCPA. Employees of a 3M China-based subsidiary arranged for Chinese health care officials to attend overseas conferences, educational events, and health care facility visits ostensibly as part of its marketing and outreach efforts, but that in fact were often a pretext to provide overseas travel, sightseeing and entertainment. (8/25/23)SEC Order Grupo Aval Colombian conglomerate Grupo Aval Acciones y Valores S.A. (Grupo Aval S.A.) and its bank subsidiary Corporacin Financiera Colombiana S.A. (Corficolombiana) agreed to pay $40 million to resolve charges that they violated the books and records and internal accounting controls provisions and, in the case of Corficolombiana, the anti-bribery provisions of the FCPA, in connection with an extension to a highway infrastructure project in Colombia. The SEC alleges that Corficolombiana, through its former president and with a joint venture partner, paid at least $28 million in bribes to secure the extension (08/10/23). Gartner, Inc. A research and consulting services company agreed to pay over $2.45 million to resolve charges that it violated the anti-bribery, books and records, and internal accounting control provisions of the FCPA in connection with a corrupt arrangement with a South African consulting firm to obtain and retain contracts from the South African Revenue Service. (5/26/2023) Koninklijke Philips N.V. The medical device manufacturer agreed to pay $62 million to resolve charges that it violated the books and records and internal accounting controls provisions of the FCPA, in connection with the operations of its subsidiaries in China. For several years, employees at Philips Chinese subsidiaries, distributors or sub-dealers sought to improperly influence government hospital officials, including through the use of price discounts that increased the risk of payments to the government officials, to increase the likelihood that Philips products would be selected in public tenders. They further corrupted public tenders by colluding with other manufacturers employees to create false accompanying bids to give the appearance of a legitimate public tender. (05/11/23). Franks International N.V. An oil services company agreed to pay approximately $8 million to resolve charges that it violated the FCPAs anti-bribery, books and records, and internal accounting controls provisions in connection with payments made by its subsidiaries to an Angolan government official through a purported sales agent. (4/26/23) Flutter Entertainment plc, as successor-in-interest to The Stars Group, Inc. - The company agreed to pay a $4 million civil penalty to resolve charges that it violated the books and records and internal a

sec.gov

Microsoft president Brad Smith sent the following email to all Microsoft employees following announcements by the U.S. Department of Justice and the U.S. Securities and Exchange Commission that they had reached an agreement with Microsoft to settle claims of violations of the Foreign Corrupt Practices Act. From: Brad Smith Sent: July 22, 2019 To: Microsoft All Employees Subject: There is no room for compromise when it comes to ethical business practices Im disappointed to share some news today that I hope well never need to repeat about the announcement of an agreement with the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) to settle claims of violations of the Foreign Corrupt Practices Act, or FCPA. More specifically, it was announced that our Hungarian subsidiary has entered into a Non Prosecution Agreement, or NPA, with the DOJ and we have agreed to a Cease and Desist Order with the SEC. This follows Microsofts cooperation with a multi-year government investigation, reported previously, into potential violations of the FCPA between 2012 and 2015. (An NPA is a public contract between the DOJ and a company in which the company agrees to take certain actions; it does not involve the filing of any charges in court. The SEC Cease and Desist Order similarly is based on an agreement and doesnt involve a court filing.) As the DOJ stated today, it has concluded that between 2013 and June 2015 a senior executive and some other employees at Microsoft Hungary participated in a scheme to inflate margins in the Microsoft sales channel, which were used to fund improper payments under the FCPA. As the DOJ explained, a Microsoft Hungary executive and other Hungary employees falsely represented to Microsoft itself that these discounts were needed. But that doesnt absolve the company of legal responsibility for what happened. These employees failed to pass to customers the discounts they claimed were needed to close a deal, and instead, the DOJ concluded that the inflated margins were used to fund improper payments. At one level, we should all recognize that this misconduct involved a small number of employees at Microsoft Hungary, all of whom are no longer with the company. Were fortunate to have in place today a new set of leaders at our Hungarian subsidiary who are committed to the companys high ethical standards. But its even more important that we take the time to learn from this moment, applying some broader lessons that are even more fundamental: First, todays settlements involved employee misconduct that was completely unacceptable. We conducted our own investigation and provided complete information to the DOJ and SEC. In Hungary, where the most concerning conduct took place, we fired four Microsoft Hungary employees over three years ago and terminated relationships with four resellers. Some of the resellers responded by complaining to local regulators in an attempt to restore their business and some of the employees responded by suing us. Were grateful that local courts and regulators have backed up our decision to cut all ties with individuals and businesses that, in our view, behaved in a wholly unethical manner. Were also grateful that the agreements with both the DOJ and SEC recognize the extent of our cooperation and the DOJ agreed that we deserved the maximum credit allowable for cooperation in determining a monetary penalty. We were deeply disappointed and embarrassed when we first learned about these events several years ago, and we hope that all of the steps weve since taken, including todays settlement, send a strong message. As a company, we do not tolerate employees and partners who willfully break policies that go to fundamental issues of business integrity. Ultimately, the world will successfully root corruption out of the global economy only if individuals, businesses, and governments everywhere stand up and deliver the message together that they will not stand for conduct that facili

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In 2016, Yasser Elabd noticed a $40,000 payment to a client in Africa that didnt smell right. The payment came from Microsofts business investment fund money meant for closing deals and opening up new lines of business. But the customer named in the request wasnt a customer at all, at least not according to the internal client list. He was a former Microsoft employee who had been terminated for poor performance, and hed left the company so recently that its rules would have barred him from approval.It was suspicious, more like a bribe than a proper business request but when he pushed for more details, other managers started to push back. Eventually, the payment was stopped, but there were no broader consequences, and few seemed interested in digging deeper. He came to believe his colleagues were far more comfortable with this kind of payment than he was.In the two years that followed, Elabd says he did everything in his power to stamp out these quiet bribes a fight that made him a pariah among his colleagues and eventually cost him his job. But looking back, he believes Microsoft wasnt interested in stopping the payouts, preferring to let phony contracts slip through and accept the associated cash.theyre promoting the bad people. If youre doing the right thing, they wont promote you.Elabd went public with his experiences in an essay published Friday by the whistleblower platform Lioness, alleging widespread bribery through Microsofts foreign contract business. Elabd estimates that more than $200 million each year is spent on bribes and kickbacks linked to the company, often in countries like Ghana, Nigeria, Zimbabwe, Qatar and Saudi Arabia. For the regions he worked in, he believes more than half of the salespeople and managers took part. If true, its a stunning look at the ongoing corruption associated with international tech contracting and Microsofts ongoing struggles to contain it.As director of emerging markets for the Middle East and Africa, Elabd saw many different versions of the problem. Sometimes, as in the African case, they were suspicious requests from the business investment fund. In another instance, he saw a contractor for the Saudi interior ministry receive a $13 million discount on its software but the discount never made it back to the end customer. In another case, Qatars ministry of education was paying $9.5 million a year for Office and Windows licenses that were never installed. One way or another, money would end up leaking out of the contracting process, most likely split between the government, the subcontractor, and any Microsoft employees in on the deal.This kind of corporate bribery is a widespread problem internationally, particularly in countries where the government is the primary customer and mid-level bureaucrats see bribes as part of the cost of doing business. The World Economic Forum estimates that more than $1 trillion is lost to bribes globally each year. Its harder to estimate the portion involving the scam described by Elabd, where international companies pay off local decision-makers to secure their business or drum up sham deals just to loot the treasury. The cost is typically borne by the countrys taxpayers often in nations with little money to spare and diverted to the bureaucrats and subcontractors instead of the people its meant to help. But no small part of the money is sent to parent companies as part of the ruse, giving them an unfortunate incentive to turn a blind eye.In 2019, Microsoft paid $25 million to settle claims of foreign briberyIts a challenge for any multinational company but Elabds experience at Microsoft made him think the company had given up fighting it. Its going on at all levels, he said in an interview with The Verge. All the executives are aware of it, and theyre promoting the bad people. If youre doing the right thing, they wont promote you.Reached for comment, Microsoft emphasized its commitment to ethical practices, pointing to the standards of bu

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