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Federal Contractor Misconduct Database (FCMD)

The federal government routinely awards contracts to companies with histories of misconduct, including contract fraud and other violations. POGO believes that providing this website will help to improve contracting decisions and increase public knowledge of how the government spends billions of taxpayer dollars each year. Read more…

South Korea and China Bribery

The U.S. Securities and Exchange Commission (SEC) charged IBM with violating the books and records and internal control provisions of the Foreign Corrupt Practices Act (FCPA) as a result of the provision of improper cash payments, gifts, and travel and entertainment to government officials in South Korea and China. SEC alleged that from 1998 to 2003, employees of IBM Korea, Inc., an IBM subsidiary, and LG IBM PC Co., Ltd., a joint venture in which IBM held a majority interest, paid cash bribes and provided improper gifts and payments of travel and entertainment expenses to these officials in order to secure the sale of IBM products. SEC also alleged that from at least 2004 to early 2009, employees of IBM (China) Investment Company Limited and IBM Global Services (China) Co., Ltd., both wholly-owned IBM subsidiaries, engaged in a widespread practice of providing overseas trips, entertainment, and improper gifts to Chinese government officials. Without admitting or denying SEC’s allegations, IBM consented to the entry of a final judgment in which it agreed to pay $5,300,000 in disgorgement, $2,700,000 in prejudgment interest, and a $2,000,000 civil penalty.

Misconduct Type
Ethics
Enforcement Agency
SEC
Contracting Party
None
Court Type
Civil
Disposition
Settlement
Date of Settlement Announcement
3/18/2011
Contractors Involved Penalty
Total
IBM Corporation $10,000,000
Further Information Released
Complaint 5/20/2011
SEC Press Release 5/20/2011

Federal Contractor Misconduct Database