HP reaches settlement with DOJ in kickbacks case

August 3, 2010

(AP) -- Hewlett-Packard Co. said Monday that it has agreed in principle to settle a lawsuit by the Department of Justice, which alleged that HP and other technology companies paid kickbacks to Accenture PLC in exchange for recommendations for government work.

HP denied "engaging in any illegal conduct." It said the deal will lower its fiscal third-quarter profit by 2 cents per share. That's about $50 million given that it has 2.33 billion shares outstanding.

"We believe it is in the best interest of our stakeholders to resolve the matter and move beyond this issue," HP said in a statement.

A Justice spokesman declined to comment.

The settlement still needs to be approved by the Justice Department, an Arkansas district court where the original was filed, and government agencies.

The government joined whistleblower lawsuits against HP, Accenture and Inc. in 2007 over the arrangements, alleging violations of the False Claims Act. The companies had "alliance relationships" in which they agreed to work together, but the agreements resulted in what amounted to kickbacks in securing government contracts, it said at the time.

Microsoft Corp. was named a whistleblower lawsuit but the government declined to join the lawsuit and the case was dismissed.

Last week, the Justice Department said it was joining a fraud lawsuit against . related to software contracts worth hundreds of millions of dollars.

The agency said Oracle failed to offer government customers the same discounts on its software that it offered commercial customers. As a result, the lawsuit alleges, Oracle overcharged the government on a contract that ran from 1998 to 2006.

HP shares rose 10 cents to $47.66 in after-hours trading. The stock finished regular trading up $1.52, or 3.3 percent, at $47.56.

(This version CORRECTS that Sun Microsystems was among companies in lawsuits joined by government. Clarifies background)

Explore further: US files complaint against EMC


Related Stories

US files complaint against EMC

March 3, 2009

The US Justice Department announced that it has filed a complaint against EMC Corp. over contracts the information management and storage giant secured with the US government.

Sun Micro: We may have broken US anti-bribery law

May 8, 2009

(AP) -- Sun Microsystems Inc. may have broken anti-bribery laws with its actions in an unspecified location outside the United States, a revelation that would-be acquirer Oracle Corp. knew about before inking its $7.4 billion ...

Oracle says Justice Dept allows $7.4B Sun deal

August 20, 2009

(AP) -- Business software maker Oracle Corp. said Thursday it has received the Justice Department's approval to move forward with its $7.4 billion acquisition of former dot-com-era star Sun Microsystems Inc.

Oracle expects EU to approve Sun deal next month

December 17, 2009

(AP) -- Oracle Corp. said Thursday that its profit jumped 12.5 percent in the latest quarter and that it expects the European Union will finally approve its $7.4 billion purchase of Sun Microsystems Inc. next month.

HP trims 1Q net income because of lawsuit ruling

March 6, 2010

(AP) -- Hewlett-Packard Co. trimmed the net income it reported for its fiscal first quarter Friday, saying it has to set aside more money than expected to deal with a lawsuit against it in the U.K.

Recommended for you

The ethics of robot love

November 25, 2015

There was to have been a conference in Malaysia last week called Love and Sex with Robots but it was cancelled. Malaysian police branded it "illegal" and "ridiculous". "There is nothing scientific about sex with robots," ...

Nevada researchers trying to turn roadside weed into biofuel

November 26, 2015

Three decades ago, a University of Nevada researcher who obtained one of the first U.S. Energy Department grants to study the potential to turn plants into biofuels became convinced that a roadside weed—curly top gumweed—was ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.