The United States Justice Department and Securities and Exchange Commissions had been investigating Microsoft for some time. The reports surfaced from The Wall Street Journal in March advising of the global investigation. Now, rumors of illegal activity between Microsoft executives and business partners are extending into Russia and Pakistan. These two countries join China, Italy and Bulgaria which are currently under investigation.
Microsoft’s Vice President and Deputy Counsel, John Frank has swiftly responded. He stated the allegations is nothing new in the world of technology, which alone is true. He further stated, Microsoft takes the allegations seriously and has been reviewing the tips received. The company further advised they hold ethics in the highest degree and plan on providing specific details over time, as they come available.
Unnamed sources from Russia stepped forward and contacted US officials, advising Microsoft software resellers were offering bribes. The bribes were to government officials in Russia to secure a deal. In Pakistan, another unnamed source stepped forward and stated a Microsoft business partner paid for a government official and his wife to vacation. The vacation would then secure a deal between the governing agency and the Microsoft certified consulting firm.
U.S. officials involved in the investigation have not pressed charges or even accused any companies or individuals. For now, the preliminary investigation is on-going. Microsoft has launched their own internal investigation, and has promised the U.S. government of their allegiance during the research of kickbacks and bribes. The Microsoft probe seems to be centered on certified resellers of Microsoft software. No word yet if investigations are being conducted on any U.S. based firms.
Frank stated Microsoft Corp. was unaware of the allegations of bribes transpiring between business partners and officials around the globe. In 2010, Microsoft did receive a tip from a former potential business partner of questionable deals between Chinese officials and one reseller. The Windows giant launched a full 10-month long investigation, but confirmed no bribes or potential wrongdoings were uncovered.
Ironically, just in July, Russia’s largest mobile carrier, OAO Mobile TeleSystems dropped support for the iPhone and picked up, in full swing, support for Windows 8 devices. The CEO of the largest telecommunications firm there, Andrei Dubovskov stated he didn’t think Apple was providing a “fair deal,” and switched to Microsoft. Of course, this raises eyebrows with the recent probe expansion into Russia.
The legal teams with the Justice Department and Securities and Exchange Commission are launching the investigation, per the Foreign Corrupt Practices Act. The act prohibits, “U.S. companies and companies that trade on U.S. stock exchanges from paying bribes to foreign officials.” Tech outlets have tried reaching out to the U.S. government agencies for response, but no word is forthcoming on the probe.
Microsoft has released no additional statements outside of Frank advising they would cooperate, and the company does hold ethics to the highest standards. Oversight of such matters can be considerable, especially on a global expansion. Reportedly, Microsoft has nearly two dozen internal investigators currently working on the investigation. No word from the resellers in Russia, Pakistan or any other named country has been received. The investigation may come up empty, but with the recent news of paid vacations, and telecommunications firms dropping support for another big name; questions and tips will continue to roll in to uncover the truth.