HP Pays Fine of $55 Million for Kickbacks

The settlement resolves allegations that HP paid kickbacks to systems integrator companies in return for recommendations that U.S. agencies buy HP products.

To settle claims the computer giant defrauded the U.S. government, Hewlett-Packard has agreed to pay $55 million, the Justice Department announced on August 31.

The settlement resolves allegations that HP paid kickbacks to systems integrator companies in return for recommendations that U.S. agencies buy HP products.

It also resolves claims that a 2002 contract between HP and the General Services Administration, the U.S. government's chief procurement body, was defectively priced because HP provided incomplete information to the GSA.

The 2002 contract involved sales of computer equipment and software to federal agencies by the California-based company, the world's largest computer maker.

"Contractors must deal fairly with the government when doing business with federal agencies," U.S .assistant attorney general Tony West said.

"As this case demonstrates, we will take action against those who seek to taint the government procurement process with illegal kickbacks," West said.

HP said on August 2 it had negotiated a deal with U.S. prosecutors to settle the case but did not disclose the amount of the settlement.

Earlier on August 30, HP announced it had been awarded a contract worth up to $800 million to supply computing equipment to the U.S. Air Force.

Copyright Agence France-Presse, 2010

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