After HP's $108m settlement, Poland's anti-corruption work continues

Summary:A far-reaching probe into suspected corruption in the tech industry in Poland is far from over.

Despite HP's settlement yesterday with US authorities over a corruption case spanning three countries, a far-reaching tech corruption probe in one of them is far from over.

The US Department of Justice (DOJ) and Securities and Exchange Commission (SEC) yesterday announced the $108m settlement with HP, relating to corruption in Russia, Mexico, and Poland.

However, the settlement may not take the heat off HP in the countries in question, and not only because the company could still face legal action from local authorities.

In Poland, HP was just one company investigated as part of a widespread probe into corruption in the tech industry: the Polish anti-corruption agency CBA is also looking into several other US-based multinationals, as well as a number of local companies.

The corruption know being investigated, known as the 'Infoafera' in Poland, came to light in 2011 following several arrests, and is focused on serious irregularities in multiple tenders for IT systems for Polish ministries and government agencies, including the country's police.

Between 2007 and 2010 public sector officials reportedly received bribes including cash, luxury goods, hardware, and gadgets and paid trips to Las Vegas. So far 41 people have been charged with alleged offences relating to the probe, including IT company staff and government officials.

With suspect projects having an estimated combined worth of PLN 1.5bln (around €375m), Infoafera is widely described as the largest corruption scandal in post-communist Poland.

HP is the first company to be held accountable for its part in the Infofera, under a US law that gives authorities the right to fine US-based companies for corrupt practices abroad.

"According to an agreed statement of facts, in Poland, from 2006 through at least 2010, HP Poland falsified HP books and records and circumvented HP internal controls to execute and conceal a scheme to corruptly secure and maintain millions of dollars in technology contracts with the Komenda Główna Policji (KGP), the Polish National Police agency," the FBI said in a statement on Wednesday.

"HP Poland made corrupt payments totalling more than $600,000 in the form of cash bribes and gifts, travel, and entertainment to the KGP's Director of Information and Communications Technology. Among other things, HP Poland gave the government official bags filled with hundreds of thousands of dollars of cash; provided the official with HP desktop and laptop computers, mobile devices, and other products; and took the official on a leisure trip to Las Vegas, which included drinks, dining, entertainment, and a private tour flight over the Grand Canyon. To covertly communicate with the official about the corrupt scheme, an HP Poland executive used anonymous email accounts, prepaid mobile telephones, and other methods meant to evade detection."

HP itself released a very short statement on Wednesday addressing the settlement in general, but not activities in specific countries. "The misconduct described in the settlement was limited to a small number of people who are no longer employed by the company," executive vice president John Schultz of HP said in a statement.

Earlier on Wednesday, the Polish minister of the interior Bartlomiej Sienkiewicz told Polish national radio that HP was to admit to corruption, after a Polish newspaper reported the US settlement was imminent.

"This is a breakthrough for Poland," he said. "A large international group will admit that it acted corruptly in Poland. That means that not just one official from some ministry is responsible for the whole affair, but a large company without whom the affair would not be possible."

According to Sienkiewicz, the cooperation between the CBA and the FBI shows that Poland has finally joined the West when it comes to anti-corruption standards.

"Corruption in Poland is not just a problem on the level of the civil servant, as everyone has this point where he is broken. Corruption in Poland is also a business problem," adding that if there are no bribe givers, there would be no bribe takers.

Others in Poland are more muted.  Recently, Polish newspaper Dziennik Gazeta Prawna wrote that one smaller company suspected of being involved in Infoafera won a €345,000 contract for building a new IT system for CBA — the same agency investigating the company as part of the probe.

"Companies pay fines to the tune of many millions in America, but here we have the situation that while a company is under investigation it can still write in to tenders and even win them," the Institute of Public Affairs think tank's Marcin Waszak said in another radio broadcast. "It is clear American standards are much higher than in Poland. In our country we still don’t have those mechanisms and ways to discipline companies."

Grazyna Kopinska of the Stefan Batory Foundation told Polish national television that the IT sector in the country remains very susceptible to corruption. "First of all we have failed to invest into this sector for many years. Only in the last years much money was invested in it, creating many temptations. The second problem is that the whole procedure is too complicated."

Topics: Tech Industry, EU

About

Michiel van Blommestein is a Dutch journalist who has been living in Poland since 2010. He worked as a technology journalist in the Netherlands before moving to Poland to work as a regular correspondent for various news outlets. He still loves the bits and bytes though.

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