The United States has legal elbow room for American companies to pay “grease the wheel” type bribes to government officials in other countries. In other words, it is OK for American companies to pay bribes if a) bribes are a part of the culture in the country and b) if the bribe is for the purposes of speeding up a process (e.g. speeding up the approval of a license) and not for getting more business (e.g. can’t be for winning contracts). Microsoft seems to have forgotten the fine line because it has allegedly bribed government officials in China, Romania, and Italy that go beyond simply greasing the wheels.
Quoting “people familiar with the matter”, the Wall Street Journal is reporting the U.S. Department of Justice (DoJ) and U.S. Security and Exchanges Commission (SEC) started an investigation in 2012 to look into alleged bribes paid by Microsoft to government officials in China, Romania, and Italy to help secure software contracts.
The investigation originates from tips received by the U.S. government in 2012 by anonymous tipsters. It is interesting to note the tipster for China claims to have worked for Microsoft in China until 2008 and isn’t exactly a neutral entity in the matter; he or she is involved in some sort of labor-related dispute with Microsoft in China.
For its part, Microsoft says it conducted a ten month investigation with the help of an outside law firm into allegations of Chinese bribes and has found no wrongdoing. It remains to be decided if the DoJ and SEC will agree. And it is unclear if Microsoft has done the same for Romania and Italy.