IBM admits fresh corruption probe: report

US DOJ gears up for investigation into overseas bribery allegations

Tags: BangladeshChinaIBM (www.ibm.com)South KoreaUSAUkraine
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IBM admits fresh corruption probe: report IBM previously hammered out a $10m settlement with the SEC regarding FCPA-related charges. (Getty Images)
By  Stephen McBride Published  May 6, 2013

IBM this week announced in a Securities and Exchange Commission (SEC) filing that it was under fresh investigation by the US Department of Justice (DOJ) for offences covered by the Foreign Corrupt Practices Act of 1977 (FCPA), according to online anti-corruption site, fcpablog.com.

The tech giant came to terms with the SEC in March 2011 over accusations of corruption by employees in IBM Korea, LG IBM, IBM (China) Investment Company Limited and IBM Global Services (China) Co., Ltd., between 1998 and 2009. Under the agreement IBM was required to pay $10m in penalties, which was made up of profits accrued as the result of the alleged activities, prejudgment interest and a $2m civil penalty.

The FCPA covers a number of issues, but according to the FCPA Blog the accusations leveled at IBM's overseas units involve transparent accounting practices and the bribing of public officials.

Last year a federal judge, Richard Leon, whose approval was required to cement the SEC-IBM settlement, rejected the proposal and asked for more information regarding accounting practices. Previously, only bribery had been under investigation.

In early 2012, IBM Poland came under separate investigation by the Polish Central Anti-Corruption Bureau, for the activities of an ex-employee that were also contrary to FCPA regulations.

The recently announced DOJ investigation is said to cover not only the Polish affair, but allegations relating to transactions in Argentina, Bangladesh and Ukraine, according to IBM's SEC filing.

"The DOJ is also seeking information regarding the company's global FCPA compliance program and its public sector business," the filing stated.

"The company is co-operating with the DOJ in this matter."

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