As the probe into an overseas Hewlett-Packard bribery scandal widened Thursday, U.S. Senate candidate Carly Fiorina, HP's former CEO, denied any knowledge of a network of shell companies allegedly set up to bribe officials in Russia.
"Absolutely not," Fiorina said Thursday night when asked by the Mercury News if she was aware of any of the shell companies.
Fiorina made the comment after giving a speech on leadership at a dinner event sponsored by the San Jose Silicon Valley Chamber of Commerce at San Jose's Doubletree Hotel.
The Wall Street Journal on Thursday reported that the United States has begun investigating whether HP executives paid millions of dollars of bribes to Russian officials to win a contract in Russia. The Journal said the two agencies investigating whether HP violated the Foreign Corrupt Practices Act are the Justice Department and the Securities and Exchange Commission. That law prohibits U.S. companies from bribing foreign officials anywhere in the world.
"I think the U.S. should investigate it, based on the facts that I've seen," Fiorina said.
Fiorina was HP's chief executive from 1999 to 2005, during which time the bribery allegedly occurred. She is now engaged in a contentious three-way GOP battle over who will oppose Sen. Barbara Boxer in the fall.
The Journal had reported on Wednesday that Russian and German officials were looking into whether the HP executives paid the bribes in exchange for a deal to sell a secure computer system to the Russian prosecutor general's office. The Journal cited German court documents and unnamed law enforcement sources.
HP officials say they are cooperating fully with the investigation, which centers on a 2003 contract with the Russian agency. The company is also conducting its own probe.
The Journal said German court records show the original contract, worth about $48 million, was signed in 2003 by an HP executive and an unidentified Russian official. HP officials allegedly paid $10.9 million in bribes to win the contract.
According to court records cited by the Journal, the three HP employees under investigation are: Hilmar Lorenz, former head of sales in Russia; Kenneth Willett, who led a unit that sold equipment in Europe, the Middle East and Africa from 2003 until 2007; and Paeivi Tiippana, Willett's predecessor at the German unit.
The Journal reported that Willett, an American, is on administrative leave from HP after being released on $339,000 bail from a German jail on Jan. 6.
Lorenz, who in 2003 reportedly set up the deal at the center of the probe, was arrested on Dec. 2 on suspicion of bribing foreign officials and spent four months in jail before posting $217,000 bond, the Journal said.
Fiorina was asked Thursday night if she bore ultimate responsibility for the alleged actions because she headed HP at the time.
"I think we have to understand what the facts of the case are," she said. "But certainly if I had discovered as the CEO illegal activity going on at HP, employees would have been fired. That's my demonstrated record."
A spokesman for one of Fiorina's opponents, former Silicon Valley congressman Tom Campbell, noted Thursday that a shell company under Fiorina's watch was used to funnel U.S. technology to the regime in Iran.
"Our point of view is that she needs to clear this up right away," said Jamie Fisfis, Campbell's spokesman. "Was she aware of what was going on? And if not, why not?"
Contact Ken McLaughlin at 408 920-5552.