Whistleblowers set to work on U.S. IT giant Microsoft

The U.S. Securities and Exchange Commission (SEC), launched an investigation into American multinational software giant Microsoft, based on anonymous tips from a company representative in China.

“Lawyers from the U.S. Justice Department and the Securities and Exchange Commission are examining kickback allegations made by a former Microsoft representative in China, as well as the company’s relationship with certain resellers and consultants in Romania and Italy,” The Wall Street Journal reported March 21.

The informant reportedly accused Microsoft of consorting with individuals who bribed state officials abroad, in order to gain IT contracts for the company. He further complained of being asked to offer bribes to Chinese officials while working there on a business deal.

U.S. prosecutors are also looking into rumors that bribes were offered to gain IT contracts for the Romanian Ministry of Communications and Information Society. The Romanian ministry denied the allegations.

“Like every large company with operations around the world we sometimes receive allegations about potential misconduct by employees or business partners,” Microsoft deputy- president and deputy- general counsel, John Frank, commented.

“We cooperate fully in any government inquiries,” he added.

Many allegations have been reported since recent changes to the the Foreign Corrupt Practices Act (FCPA) of 1977, which addresses accounting transparency requirements, and countermeasures bribery of foreign officials.

Reportedly the tipster’s contract with Microsoft ended in 2008. He was also involved in a labor dispute with the company’s Chinese unit.

The FCPA, unlike for example its British counterpart (the 2010 Bribery Act), has gained much attention and infamy amongst U.S. businessmen. A new whistleblower program, introduced by the SEC in 2010, now offers rewards of up to 30 percent of a fine levied against a company as a result of original information supplied to US authorities, provided the fine exceeds USD 1 mln.

The SEC received some 115 tips alleging FCPA abuse during the fiscal year ending September 2012.