Microsoft Accused of Violating the Foreign Corrupt Practices Act Again

Posted on March 25, 2022 by Paul Thurrott in Microsoft with 16 Comments

A former Microsoft employee claims that the software giant paid hundreds of millions of dollars in bribes over the years and continues to violate the Foreign Corrupt Practices Act.

“In my estimation, a minimum of $200 million each year goes to Microsoft employees, partners, and government employees,” Yasser Elabd writes on Lioness. “Experience leads me to believe that 60–70 percent of the company’s salespeople and managers in the Middle East, Africa, and parts of Europe are receiving these payments. Among the customers who I believe have received this money are government officials in Ghana, Nigeria, Zimbabwe, Qatar, and Saudi Arabia.”

This isn’t the first time Microsoft has been accused of this crime: as Elabd notes, Microsoft in 2019 paid a $25.3 million fine as part of a settlement with the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) for violating the Foreign Corrupt Practices Act with bribery and kickback schemes in Hungary, Saudi Arabia, Thailand, and Turkey.

At that time, Microsoft president Brad Smith said that he hoped the firm would never have to share that kind of news again. But it has happened again, and repeatedly. Indeed, the company is still working with the Hungarian contractor that was at the heart of that 2019 settlement, Elabd claims.

“The SEC and DOJ have both declined to investigate Microsoft over the same types of bribes in the Middle East and Africa,” Elabd explains. “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 U.S. law.”

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Comments (16)

16 responses to “Microsoft Accused of Violating the Foreign Corrupt Practices Act Again”

  1. lvthunder

    It would surprise me more if they (or any other large company) weren't bribing and kicking back in countries like those. It's the way things work there.

  2. Daekar

    Anyone who is surprised by this is culturally ignorant. American culture holds bribes to be unacceptable, but in much of the world they're part of every day business.

    • red.radar

      Cultural acceptance of corruption doesn't justify the actions. One should compete on their merits not the depth of their pocket book.

      • red.radar

        And since their isn't Editing features. I just want to say America is not a shining saint of morality either. Many corporate deals and business practices aim to work around that very principal. I am just saying doesn't mean its right.

    • Daishi

      American culture holds bribes to be unacceptable

      Have you met the American political system?

    • Cosmocronos

      And this is the reason in the US is called lobbying…

    • MoopMeep

      In work they make us take these various tests. They are about internet security, buisness practices, export laws.

      I remember taking one test (I forgot the title) where it was saying that bribing people are illegal and you can't do it.... unless you are in a country where its ok. I think they example was that in some countries you have to bribe people to get things like the power turned on and it was ok to do that in those countries. I always find these tests confusing, don't do <xxxx> unless its ok, then its ok to do it.

  3. dspeterson

    Some of the more specific partner requirements added in the past few years like demanding proof that discounts provided on sales to government/state owned entities were actually passed along to the entity make more sense now.

    On the partner side Microsoft certainly has been cracking down more on this but don’t doubt that there’s still bad actors too.

  4. mikegalos

    So there's nothing here but a disgruntled ex-employee making an undocumented claim?

  5. Donte

    Come on Microsoft, only hundreds of millions? Apple gave the China/CCP 275 BILLION! Microsoft really needs to step things up!

  6. ghostrider

    This is likely 100% true, but not just for MS. Any large multinational who wants to maintain a competitive edge, or even force out competition, will use (whether right or wrong) any and all means available, and in certain parts of the world where bribes and under-the-table deals are acceptable, I'm sure this goes on - if MS wants to ensure that a countries government runs all their systems on Windows or Azure for the next 5 years, all it will take to make this happen are 'unaccountable' payments to the right officials in that country.

    • bkkcanuck

      I work for a listed multinational American company of a reasonable size and receive regular (annual refresher) courses on what is allowed and what is not allowed when it comes to corrupt practices... and I am quite sure they are quite serious about any of it being cause for immediate dismissal. It is actually stricter than I would even expect. Some of the minor things that we did through the course of business domestically as a previously independent company (acquired by this other company) did in 'customer relations' (not necessary bribes but shows of appreciation) ... are now... cause for dismissal by the listed company I work for. (and this company does do business internationally).

  7. waethorn

    I once heard from a school board worker that the government of Ontario is in a contract with Microsoft to supply a license of Windows and Office for every student and teacher of the public and Catholic school board system - whether they use them or not. The cost is based on a volume deal derived from census and school registration counts, and the province isn’t permitted to negotiate a smaller deal. This is part of the provincial income taxes that everyone pays.

    Many school boards use Google Docs instead.

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