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Wednesday, March 20, 2013

Daily Report: U.S. Is Said to Scrutinize Microsoft Accusations

Federal authorities are examining Microsoft’s involvement with companies and individuals that are accused of paying bribes to overseas government officials in exchange for business, according to a person briefed on the inquiry, Nick Wingfield reports in The New York Times.

The Justice Department and the Securities and Exchange Commission have both opened preliminary investigations into bribery accusations involving Microsoft in China, Italy and Romania, according to the person, who spoke on the condition of anonymity because the inquiry is a confidential legal matter. Microsoft’s practices in those countries are being looked at for potential violations of the Foreign Corrupt Practices Act, a federal law passed in 1977 that prohibits American companies from making illegal payments to government officials and others overseas to further their business interests.

In a blog post on Tuesday afternoon, John Frank, a vice president and deputy general counsel at Microsoft, said the company could not comment about continuing investigations. Mr. Frank said it was not uncommon for such government reviews to find that the claims were without merit.

“We take all allegations brought to our attention seriously and we cooperate fully in any government inquiries,” Mr. Frank said in the blog post. “Like other large companies with operations around the world we sometimes receive allegations about potential misconduct by employees or business partners and we investigate them fully regardless of the source. We also invest heavily in proactive training, monitoring and audits to ensure our business operations around the world meet the highest legal and ethical standards.”

Michael Passman, a spokesman for the Justice Department, said the department had a policy of not confirming or denying the existence of investigations. A spokesman for the S.E.C. did not respond to a request for comment.

Microsoft joins a list of about 100 other companies under investigation at present related to violations of the Foreign Corrupt Practices Act, according to Mike Koehler, a professor at the Southern Illinois University School of Law and the author of a blog, FCPA Professor, about the anticorruption law. Because companies have such a strong incentive to settle cases of this sort, they rarely end up going to trial.