IBM $10 Million fine
By Asha

Last week, the U.S. Securities and Exchange Commission charged International Business Machines Corporation (IBM) with violating the books and records and internal control provisions of the Foreign Corrupt Practices Act of 1977 (“FCPA”) as a result of the provision of improper cash payments, gifts, and travel and entertainment to government officials in South Korea and China.

Under the terms of the settlement, IBM would pay a fine of $10 Million to ‘settle’ the matter with the US Government, but IBM would not legally ‘admit or deny’ the allegations.

But if you read the entire legal case against IBM South Korea and IBM China, it gives startling facts that more than 100 IBM China employees knew of the corrupt practices. The legal case against IBM reads in part “From at least 2004 to early 2009, employees of IBM (China) Investment Company Limited and IBM Global Services (China) Co., Ltd. (collectively, “IBM-China"), both wholly-owned IBM subsidiaries, engaged in a widespread practice of providing overseas trips, entertainment, and improper gifts to Chinese government officials. The misconduct in China involved several key IBM-China employees and more than 100 IBM China employees overall”

Another of the US Government’s allegations claims: “During the period 1998 to 2009, IBM failed to make and keep books and records that accurately reflected the improper payments made in South Korea and China. Instead, these payments were recorded as legitimate business expenses.”

For more than 10 years, at least 100 IBM China and IBM South Korea officials knew about such corrupt practices.  But IBM has paid a fine of $10 Million but will not legally ‘admit or deny’ the corruption charges.  This is how the American legal system works (does not work?).