US SEC charges Biggish Blue
The U.S. Securities and Exchange Commission has charged Big Blue with giving hundreds of thousands of dollars in bribes to South Korean and Chinese officials. According to SEC, IBM bribed the Korean and Chinese officials IBM subsidiaries with free travel, entertainment and other sweeteners.
Biggish Blue has agreed to pay SEC a $10 million fine, according to the Wall Street Journal. A spokesperson for IBM said that the outfit insists on the highest ethical standards in the conduct of its business and requires all employees to follow its policies and procedures for conducting business.
We wonder when that policy was introduced because it seems that IBM payments to South Korean officials in the form of gifts, travel and entertainment totalled $207,000 and continued from 1998 to 2003, which would have been a bit difficult to slip past accounts. The bribing of Chinese officials was a little more recent with employees of IBM subsidiaries creating "slush funds" at Chinese travel agencies, resulting in a "widespread" practice of giving trips, entertainment and other gifts to Chinese officials.
It is not clear how much was spent doing this but it seemed that IBM employees in China were working with a local travel agency to fake invoices in an effort to make the trips appear legitimate. However it seems that IBM was a little more obvious about things in 1998 when its South Korean employees delivered a shopping bag filled with more than $19,000 to a government official.
While it was probably not policy to bring Eastern officials, it seemed that IBM lacked the internal controls to stop the bribes from happening, SEC said.