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Microsoft to cooperate with feds in bribery, kickback probe

Responds to claims that the DOJ and SEC are scrutinizing deals in China, Romania and Italy by Microsoft and its partners

Microsoft today said it would cooperate with federal regulators who are reportedly investigating claims that some of its business partners bribed officials in China, Romania and Italy to close deals.

"We take all allegations brought to our attention seriously and we cooperate fully in any government inquiries," said John Frank, a Microsoft deputy counsel, in an emailed statement today. "Like other large companies with operations around the world we sometimes receive allegations about potential misconduct by employees or business partners and we investigate them fully regardless of the source."

Frank, who expanded on that theme in a longer blog post Tuesday, was responding to a report in today's Wall Street Journal ( paid subscription required) that an executive in Microsoft's China subsidiary told a partner to offer officials kickbacks in return for signing new software contracts.

U.S. regulators at the Justice Department and the Securities and Exchange Commission (SEC) are also allegedly investigating whether Microsoft partners in Romania and Italy offered bribes or gave extravagant gifts to government procurement officials, the newspaper said.

Frank did not deny or confirm the investigations, but said, "It is appropriate that both Microsoft and the government review them."

He also downplayed the possibility that Microsoft itself was involved, hinting that rogue behavior was at the root of any allegations, and that it was impossible to police the company's huge number of employees -- more than 98,000 -- and its even larger ecosystem, which counts over 640,000 partners.

"In a company of our size, allegations of this nature will be made from time to time," Frank wrote on the Microsoft blog. "It is also possible there will sometimes be individual employees or business partners who violate our policies and break the law. It isn't possible to say there will never be wrongdoing."

The Department of Justice was not immediately available for comment on the Wall Street Journal's claims. The SEC declined to comment.

Frank also pointed out -- in a paragraph that included the line, "It is important to remember that it is not unusual for such reviews to find that an allegation was without merit" -- that the Wall Street Journal had reported earlier this week on allegations that the publication paid Chinese officials for information.

The Wall Street Journal and its parent company, Dow Jones, have denied any wrongdoing, and suggested that the supposed tipster was actually a government agent, part of a plot to retaliate for the newspaper's reporting on Chinese leaders.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is [email protected].

See more by Gregg Keizer on Computerworld.com.

Read more about legal in Computerworld's Legal Topic Center.


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