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SEC examines HP as bribery probe expands

SAN FRANCISCO (Reuters) - The U.S. government is looking into whether Hewlett-Packard Co employees were involved in a bribery scheme involving a business contract in Russia, amid a probe by German and Russian authorities.

HP said it has been in contact with the U.S. Securities and Exchange Commission, and said it will cooperate with agencies investigating the matter.

A U.S. Justice Department spokeswoman declined to comment.

German authorities on Thursday said they have targeted nine suspects, including former HP staff, in a Russian bribery probe. At issue is whether the world’s top personal computer maker paid $11 million in bribes to win business in Russia.

Prosecutors in the eastern German city of Dresden said on Thursday they had asked Russian colleagues to search HP offices in Moscow to check suspicions that around 8 million euros ($10.9 million) in bribes changed hands to win a contract.

“The case came to light here,” a spokesman for the prosecutors’ office in Dresden said. “The suspicion is that 8 million euros in kickback payments were made.”

Russian prosecutors on Wednesday raided HP’s Moscow offices at the behest of German authorities.

Investigators became suspicious after an audit of a small company in the eastern German state of Saxony turned up money transfers that seemed to produce nothing real in return.

That led to what the spokesman called an international network of money transfers and prompted German officials to search HP premises in the southern town of Boeblingen and in Munich in early December.

He said investigators are examining a 35 million euro contract that HP won in 2000 to provide computers and software for criminal prosecutors in Moscow. The contract was wrapped up by 2007.

On Wednesday, HP said the investigation involved alleged conduct that happened almost seven years ago, mainly by employees who are no longer with the company. HP added that it is investigating the matter internally.

Carly Fiorina, who was chief executive of HP from 1999 until 2005, denied any knowledge of conduct under investigation.

A spokeswoman for Fiorina, who is running for the U.S. Senate in California, said in an e-mailed statement: “When she served as the CEO of HP if she had been aware of any illegal or inappropriate behavior by any employee she would have taken action immediately to terminate the parties involved. In addition, Carly has a record doing just that throughout her career.”

CORRUPTION PROBE

The unidentified suspects are under investigation for possible breach of trust, tax evasion and bribery of foreign officials, the spokesman for the prosecutors’ office in Dresden said.

German prosecutors were awaiting documents seized in the searches in Moscow before deciding how to proceed.

The case is the latest corruption probe to make headlines in Germany.

Carmaker Daimler last month agreed to pay $185 million to settle U.S. charges it showered foreign officials with money and gifts to win contracts, including in Russia.

Engineering group Siemens agreed in 2008 to pay $1.3 billion to end corruption probes in the United States and Germany.

(Reporting by Jens Hack; Additional reporting by Anastasia Teterevleva in Moscow and Gabriel Madway in San Francisco; Writing by Michael Shields; Editing by David Cowell, Matthew Lewis and Richard Chang)

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