IBM pays US Govt $2.9 million to settle kickback allegations
IBM has agreed to pay the US Government more than $2.9 million to settle allegations that it solicited and provided improper payments and other things of value on technology contracts with government agencies, the Justice Department announced today. Despite the settlement, IBM maintains that it did nothing wrong.
According to the complaints against IBM, the company knowingly solicited and/or made payments of money and other things of value, known as alliance benefits, to a number of companies with whom they had global alliance relationships.
The government intervened in the actions because the alleged alliance relationships and resulting alliance benefits amount to kickbacks, as well as undisclosed conflict of interest relationships in violation of contractual provisions and the applicable provisions of the federal acquisition regulations.
“The payment of kickbacks or illegal inducements undermines the government procurement process,” said Peter D. Keisler, Assistant Attorney General for the Civil Division.
“The Justice Department is acting in these cases and in the overall investigation to protect the integrity of the procurement process for technology products and services.”
Although having agreed to pay $2.9 million to settle the allegations, IBM has issued a statement declaring that it has done no wrong:
“IBM did not engage in kickbacks false claims or any other illegal conduct alleged in the various complaints that have been filed in this matter. IBM’s business practices and policies comply with all applicable statutes and regulations including requirements related to government contracts.”
IBM hasn’t tried to explain why it paid the settlement if it hasn’t done anything wrong. Though, in IBM’s defense, companies often settle these kinds of matters out-of-court to avoid costly legal expenses. It’s it’s not clear whether in this case, this is IBM’s motivation.
The actions against IBM are part of a larger ongoing investigation of government technology vendors and consultants that has
already resulted in complaints being filed in April 2007 in Arkansas against Accenture, Hewlett-Packard, and Sun Microsystems.
IBM separately cooperated in the investigation and was able to resolve the issues relating to its alliance activities without further litigation.
The complaints were originally filed in September 2004 under the qui tam or whistleblower provisions of the False Claims Act by Norman J Rille and Neal A Roberts.
The qui tam statute allows persons who file successful actions alleging fraud against the government to receive a share of any resulting recovery. Rille and Roberts will receive an amount to be determined in the near future.
Related Posts:
