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HP Forks Over $16.25 Million to Settle School Bribery Case

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The FCC's E-Rate program provides many schools around the country with money to support their computer networks. It also provides opportunities for private tech companies, who can bid for school contracts under what's supposed to be an open and fair process. Hewlett Packard, however, recently came under fire for allegedly bribing certain school officials with lavish gifts in an attempt to rig the competition. And, although the company steadfastly denies the allegations, it has now agreed to pay $16.25 million to make the case go away.

The settlement effectively concludes an investigation originally undertaken by the FCC and the Department of Justice, who decided to take legal action after being tipped off by whistle-blowers in the school districts of Dallas and Houston. "Meals and entertainment -- including trips on a yacht and tickets to the 2004 Super Bowl -- were provided by the contractors to get inside information and win contracts that were supposed to be awarded through a competitive bidding process," the FCC said on Wednesday, while announcing the settlement.

According to the agreement, HP must now pay $7,402,441 for a contract it won with Dallas schools, and $8,847,559 for its Houston contract. HP also agreed to implement a compliance program, which will help train its employees on how to engage in the bidding process without violating E-Rate's rules.

Despite the government's conviction that HP was "conspiring to rig the competitive bidding of E-Rate contracts," the company refuses to admit guilt in the matter. "This Agreement is neither an admission of liability by HP, which denies the claims described above, nor a concession by the United States that its claims are not well-founded," the settlement reads. In a statement provided to Ars Technica, the company emphasized this sentiment, and reiterated the fact that the case is now over. "The activities at the center of this investigation occurred more than five years ago, the partner relationships have been terminated and the employees involved are no longer with the company," HP said in a statement. "HP fully cooperated with the authorities and the matter is now resolved."

Tags: bidding, bribery, e-rate, FCC, hewlett-packard, hp, lawsuit, money, politics, school, settlement, texas, top

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