Oracle is facing a significant bribery charge in India and its managing director Sandeep Mathur has already been booted out.
For Oracle, the IT deal with the Andhra Pradesh Police Department and the alleged bribery is not a new development.
It seems that bribing government and private sector officials to bag coveted IT projects is an ongoing and well scripted program for Oracle. Oracle faced punishment and faced probes several times in the recent past.
InfotechLead.com is presenting some of the past records of Oracle, a software giant is promoted by Larry Ellison.
In 2011, Wall Street Journal reported US authorities have investigated allegations that executives working for Oracle paid African officials in violation of anti-bribery laws.
Agents at the Federal Bureau of Investigation (FBI) and the justice department had been investigating the claims for at least a year.
Wall Street Journal said that Oracle could face stiff penalties of up to $2 million per incident under the US Foreign Corrupt Practices Act which makes it illegal to bribe a government official anywhere in the world.
SEC has looked at the possible civil violations as well. The allegations were understood to centre on software sales to government agencies in western and central Africa. Law enforcement agencies have investigated whether Oracle or people working for the company made payments to government officials to secure contracts.
Such payments would violate the foreign corrupt practices act (FCPA), which makes it a crime for US companies and their employees to offer or pay bribes to foreign government officials or employees of state-owned companies.
Oracle is one of several technology businesses under investigation. The US authorities are looking at allegations that Hewlett-Packard (HP) executives made illegal payments to foreign state-owned and private companies.
IBM paid the SEC $10 million to resolve civil allegations that employees paid bribes in Asia in exchange for computer gear.
In 2012, American market regulator the Securities and Exchange Commission (SEC) of the U.S. has agreed to settle an outstanding action over inducements paid by Oracle India to secure government contracts, according to several global media reports.
The SEC filing noted that between 2005 and 2007 Oracle India siphoned off around $2.2 million from 8 different contracts with the Indian government that were worth $6.7 million in revenues. This money was held off the corporate books for market development purposes and paid off via a series of front companies.
In May 2006, Oracle India negotiated a $3.9 million deal with India’s Ministry of Information Technology and Communications. Only $2.1 million made its way into Oracle’s accounts, with the reseller keeping $151,000 and putting the remaining $1.7 million into a hidden slush fund.
Two months later the money was paid out in amounts ranging from $110,000 to $396,000 to invoices from companies, none of which are on Oracle’s approved vendor list. Many were found to be simple storefront organizations set up simply to process and forward the funds.
In November 2007, Oracle India’s senior channel sales manager resigned after an inquiry into local Indian tax irregularities. During the investigation, four other employees were found to have broken the rules regarding the slush fund payments.
Media reports said HP, Oracle and IBM are being investigated by Polish authorities for bribery allegations concerning one Andrzej Machnacz, who served as senior technology officer for Poland’s national police and, later, the nation’s Interior Ministry.
ProPublica reported that Machnacz received more than a $1 million in cash and brand-name gifts in exchange for steering government contracts to the three American companies, as well as to a Polish company called Netline. According to prosecutors, the gifts included a BMW motorcycle, a Nissan SUV, a Harmon Kardon home theater, a Sony 50 inch television, 12 HP laptops, several iPads and a refrigerator.