Those annual trainings are there to show compliance. This prevents pro active investigations by authorities into business conduct. Without those corporations are free to engage in all kinda of shady business behaviour. And when something turns sideways, the offending employees passed the training, so the company is shielded, to an extend.
People downplay such training, but imagine the environment without it. Imagine if nobody officially talked about corrupt practices: it would create a very dark place for such things to occur, nobody would know what the rules are or what to do, and especially the silence would speak very loudly.
Edit: By training everyone, not just the people directly involved with such situations, anyone considering corrupt acts will know that everyone - from the tech support person who helps them send the corrupt message to the receptionist who takes the corrupt call to the finance underling who mails the check - everyone will recognize it. There is no talking the rube into helping them; there are eyes everywhere, all the time.
My thoughts exactly. Every year, the Standards of Business Conduct training talks about not bribing foreign officials and devs are like “who the hell is ever in that position anyway?”.
If it helps, I had to sit through all that stuff at Amazon as well. I was in the bit that makes consumer electronics and never dealt with contracts in any way, yet still had to spend time learning not to make or take bribes from wholesalers or international businesses or governments. Every. Single. Year.
Initially the training software was badly written so you could just open up DevTools and type "v = document.querySelector('video'); v.currentTime = v.duration - 1000;" or similar and just bop through the sections. Later they seemed to track time on the server, so really the most I could do is turn off the window focus check and leave the tab open in a second monitor. So annoying.
Me desperately trying to get a decent repro case for a bizarre networking bug in Halo: "Oh man, gotta remember, better not bribe any foreign officials while I sort this out."
Many years ago, another division of my employer got caught bribing Nigeria. As a result, a bunch of people who were never in a position to do so had to sit through hours of ethics training. Some of it came with oddly specific examples. Halfway through one such lecture, in which we were being admonished to never accept a car from a customer, some engineer in the back did some quick mental arithmetic on his own salary versus costs of cars and asked "Which customers were giving out cars?"
Being that Instructor is 100% bullshit job. I.e. you're doing something entirely pointless, day in-day out, just so your company can later say to some lawyers that it was done. I feel bad for people who work those jobs.
I read a story yesterday[1] how the policy inside Google is to cc their legal department on any emails that you think could make the company look bad in any future legal proceedings. As I understand it, this shields the email from discovery.
As one there before, during, after that little DoJ/IE kurfluffle, I recall the guidelines to be simple: there are things you don't talk about in email[0]. Which is why this Google thing mystifies me: why are you talking about it in email at all? And then to rely on what sounds like some crackpot legal theory? (I mean, maybe it's not, and IANAL, but it reeks of "sovereign citizens don't have to pay taxes".)
[0] Yes, that is a vast oversimplification (though accurate) to make a point.
one thing that they teach you in this sort of training (never a Googler but been at at other big names) is that it is not a blank check to shield all emails from discovery by just cc-ing legal.
In almost every country with a dictator and human right abuses, you will find a constitution guarantying civil rights and liberties of the individual...
[1] - "The Constitution of the Russian Federation"
Article 17
1. In the Russian Federation recognition and guarantees shall be provided for the rights and freedoms of man and citizen according to the universally recognized principles and norms of international law and according to the present Constitution.
2. Fundamental human rights and freedoms are inalienable and shall be enjoyed by everyone since the day of birth.
3. The exercise of the rights and freedoms of man and citizen shall not violate the rights and freedoms of other people.
Article 18
The rights and freedoms of man and citizen shall be directly operative. They determine the essence, meaning and implementation of laws, the activities of the legislative and executive authorities, local self-government and shall be ensured by the administration of justice.
Article 19
1. All people shall be equal before the law and court.
2. The State shall guarantee the equality of rights and freedoms of man and citizen, regardless of sex, race, nationality, language, origin, property and official status, place of residence, religion, convictions, membership of public associations, and also of other circumstances. All forms of limitations of human rights on social, racial, national, linguistic or religious grounds shall be banned.
3. Man and woman shall enjoy equal rights and freedoms and have equal possibilities to exercise them.
Maybe they just kept the Soviet one with some edits of the nation's name. That one was also wonderfully progressive and respecting of human rights... On paper. Come to think of it, did the Soviet Union really "go under"? Only in the sense of losing all its peripheral territories, AFAICS; the core remains. In several senses.
In the banks we have the same. As IT guy, the amount of quarterly trainings and their focus is a bit crazy, most topics I will never ever touch since I don't work in ie Legal and I am so far from ever interacting or even seeing any client.
Most of the trainings are about a fine we got due to being caught doing something bad, say 10 years ago, and part of legal settlement is apart from direct fine, a nice 30-60 min training where they tell you that stealing and lying and cheating is bad.
Those trainings keep re-appearing quite consistently so they are really not that effective.
When i was at Microsoft, i recall an engineer saying that corporate puts that in there so that when somebody is caught giving bribes they can point to them and say they're a lone wolf, bad actor, etc., because clearly the policy is not to give bribes, and they took the training course in this, we documented that...
Implication: they can fire that employee and continue to give bribes.
Ps. Full disclosure, I never witnessed anybody giving bribes, nor worked with anyone who would be in a position to do so.
"Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect."
At another big corp the training videos had a scenario where I would be on site with accommodations provided by the client. It asked whether I could accept a cook offered by the client.
I'm infuriated that I'm being offered t-shirts and maybe a lunch and someone else out there is getting a cook for a month. Damn right I'm taking the cook.
I was prepared to get my pitchfork out, but after reading I'm struggling to connect the dots. This article is scant on details of what illegal or favorable behavior Microsoft is expecting in exchange for money. The only concrete mention is a previous SEC filing that has nothing to do with this whistleblower. The first example about $40k doesn't seem to explain what Microsoft was actually thinking it would get for that money, let alone whether that money was illegal. At worst, it seemed to violate corporate policy, which I can understand if that got missed in an initial review. The other examples don't sound like bribery on Microsoft's part so much as resellers squeezing as much out of a deal as they can get away with. I call that a problem with the reseller model.
I imagine Microsoft looks the other way while resellers make lots of money because, realistically, being in some of the markets mentioned is impossible unless you're connected with the right person. While not necessarily efficient, I wouldn't call that illegal or even unethical without a lot more detail than this article provides.
But maybe I'm missing something. This article reads as poorly researched, and the whistleblower comes off as disgruntled more than ethical.
Edit: It's worth noting that the whistleblower's original words are a little more well-written than this article [1]. However, it makes the contrast clearer between what is factual vs what is only insinuated.
The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq. ("FCPA"), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.
Since 1977, the anti-bribery provisions of the FCPA have applied to all U.S. persons and certain foreign issuers of securities. With the enactment of certain amendments in 1998, the anti-bribery provisions of the FCPA now also apply to foreign firms and persons who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place within the territory of the United States.
The FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions. See 15 U.S.C. § 78m. These accounting provisions, which were designed to operate in tandem with the anti-bribery provisions of the FCPA, require corporations covered by the provisions to (a) make and keep books and records that accurately and fairly reflect the transactions of the corporation and (b) devise and maintain an adequate system of internal accounting controls.[1]
I'm not a lawyer, but at worst it's starkly clear to me that this runs afoul of the law. Might I suggest it may be the awareness of it is the something you are missing?
You'll need to draw that line a little clearer, because it's not starkly clear to me. I'm aware of the definition of bribery. I don't think anything mentioned here describes graft as much as it describes the reseller business unless there is some law that limits the amount of money a reseller makes on a deal, or that a purchaser is required to use all of said purchase. In the Saudi example, the contractor got a great deal, but that's hardly illegal. In the Qatar example, buying more seats than you use is a common problem and any company that sells based on seats is guilty of this on some level.
For me to take this farther than "that's how reselling works," there'd need to be some signs that Microsoft employees or government officials were seeing kickbacks from these inefficient deals...basically, the resellers were the ones doing the bribing. The whistleblower seems to be insinuating that's happening, and maybe it is, but there's no hard evidence of it here or that it's something systemic that Microsoft is promoting (indeed, Microsoft would be one of the victims in that case). Without more detail on what exactly Microsoft was extracting out of these circumstances I find the whole thing vague.
Allegedly, a foreign employee of Microsoft bribed a foreign official off US soil. The transaction was reported to accounting and controlled by some budget, and no one in the US was aware of the bribery. Which rule was broken, and by which person under the jurisdiction of the law?
The same article says to maintain counsel or ask the DOJ for advice if you want to operate in a gray area of the law, implying such behavior is common.
Last I checked, Microsoft had an army of lawyers and also a good relationship with parts of the DOJ.
It's not "resellers" making money, it's apparent that MS' employees and salespeople are using fake contracts and "discounts" to funnel money to decision makers. What MS got out of it at the end of the day — a contract or perhaps some personal earmark for a salesperson — doesn't matter. Their bribes distorted the market, entrenched corruption, and made the lives of people living in these countries worse. It should be punished to the fullest extent of the law.
This section in particular is damning,
> In another instance, he saw a contractor for the Saudi interior ministry receive a $13 million discount on its software — but the discount never made it back to the end customer. In another case, Qatar’s ministry of education was paying $9.5 million a year for Office and Windows licenses that were never installed. One way or another, money would end up leaking out of the contracting process, most likely split between the government, the subcontractor, and any Microsoft employees in on the deal.
These "subcontractors" are usually relatives of people in Government, and they're bribing these officials, then splitting money between all of them in exchange for contracts. This is illegal under the Foreign Corrupt Practices Act.
> In 2016, a request came through in the amount of $40,000 to accelerate closing a deal in one African country. [...] On top of that, the partner in the deal was underqualified for the project’s outlined scope, and he wasn’t even supposed to be doing business with Microsoft: he had been terminated four months earlier for poor performance on the sales team, and corporate policy prohibits former employees from working as partners for six months from their departure without special approval.
> I brought these issues up with the Microsoft services architect who wrote the request, asking why she didn’t take the work in this case to our very capable in-house team, Microsoft Services. She said our in-house daily rate is very expensive, and she needed a less expensive team to handle the pilot.
and then,
> Meanwhile, the woman’s manager sought me out, angry that I had bypassed him; I told him I was only following company policy. Soon after, he was promoted and became my manager. He immediately scheduled a one-on-one meeting, in which he told me our job is to bring as much revenue as we can to Microsoft. He added, “I don’t want you to be a blocker. If any of the subsidiaries in the Middle East or Africa are doing something, you have to turn your head and leave it as is. If anything happens, they will pay the price, not you.” When I said I would not block anything unless it violated company policy, his tone took a sharp turn. He shouted that I was not capable of doing this business and couldn’t close deals. But my 18-year track record spoke for me.
He escalates, but no one does anything, so he writes to the CEO.
> The aforementioned vice president immediately got back in touch with me, to say that by escalating the matter to Nadella, I had just “booked a one-way ticket out of Microsoft.”
> A general manager told me people panicked when I came to the subsidiary offices, and I had become “one of the most hated persons in Africa.” Only later did I realize this was because I asked too many questions; I was stopping people from skimming money off their deals.
This is a classic culture of corruption. It doesn't get starker than this.
> Examining an audit of several partners conducted by PricewaterhouseCoopers, I discovered that when agreeing to terms of sale for a product or contract, a Microsoft executive or salesperson would propose a side agreement with the partner and the decision maker at the entity making the purchase. This decision maker on the customer side would send an email to Microsoft requesting a discount, which would be granted, but the end customer would pay the full fee anyway. The amount of the discount would then be distributed among the parties in cahoots: the Microsoft employee(s) involved in the scheme, the partner, and the decision maker at the purchasing entity—often a government official.
I get that's the insinuation, but there's a leap the reader is expected to make between "this middleman made a lot of money" and "bribes were clearly happening" without further investigation. If a car salesman convinces me to pay more for a car than someone else pays that doesn't mean someone was bribed; the rest is a matter of degree.
I get that bribery happens, and I get that the SEC stepped on Microsoft employees for bribery in Hungary. I also get the impact that bribery and corruption has on lives. None of that is material to what's being said about this situation. In fact, it's relying on the reader's passion to make these leaps.
It's not uncommon for corporations to pay money in bribes because in many countries it's a cost of doing business; it would be otherwise impossible to get anything done.
If a company is required to pay, say, $3,000 to a corrupt official to pass a checkpoint and get access to an area where they have some business to tend to, then scale that economically to a multinational conglomerate like Microsoft who might do business in that same area 35 times in a week for various reasons and the amount of bribe money flowing out of their coffers increases to scale.
Pretty much all of the public system uses windows as OS, and most of the times it's just to use a browser to access a webapp. But there are actual windows lock-ins (due to people training and existing workflow/infrastructure that has no incentive to change), such as MS Office and Adobe Reader.
So there was no reason for Microsoft to bribe decision-making people to use windows, windows was already firmly locked in, they did it just so they can overprice licenses and for them to accept leased licenses instead of a permanent one time pay windows license. Big win for MS and bribe takers, big loss to common decency and public spending availability.
A sign of a healthy democratic government can be seen in the decisions to build future public software infrastructure on open source technology, and use Linux as client/server OS (as it's pretty much the only other alternative offering similar ease of use/maintenance/compatibility with existing software).
edit: wrote this to show it's not necessarily the cost of doing business, in most places, because the software ecosystem is already locked in and can't be replaced overnight and without considerable spending. It's just the cost of extracting more public money. And sometimes it's the cost to keep the business safe from decisions to steer towards Opensource: https://en.wikipedia.org/wiki/LiMux
My work involves a public sector organization in Brazil. In the last years there was a big push towards microsoft products at my workplace, to a point where emails with announcements from corporate IT sometimes looks and sounds like spam pushing MS products. Now I'm left wondering if that's related to bribes here too, or if it's just bad judgement/taste from IT leadership.
No need to wonder. Of course it's bribery. Most likely not by Microsoft, but by their local VARs, with tacit corporate approval.
All the blood, sweat and tears we gave during the early 2000's to make FLOSS the standard, how we advocated for it on grounds of openness and auditability, how it would - and did! - help foster a local industry... All this work and see it being undone by the current government and their cronies.
As a note, São Paulo state, where I lived, was a very reliable income source for Microsoft.
A bit like any time a local government makes a concerted effort to move to Linux, suddenly Microsoft magically finds a way to deeply discount Windows and Office just for them.
Truly sad. Even if eventually FLOSS regain traction in the Brazilian government, I think it will be trickier to extricate government data and systems from proprietary blackboxes this time, when compared to the 2000's. I think Microsoft is making their products interlocking more tightly between themselves, so it's harder to fight lock-in by replacing one piece at time. Now it's becoming like a card castle that will crumble if you try to pull any single card.
it is well documented in the 1990s antitrust documents against Microsoft Corp. that attorneys under contract with Microsoft, paid money to senior management at the Brazilian national phone system to adopt Microsoft Office as standard, and remove any other system internally, IIR
They just had the advantage of having the only viable GUI-based OS on mass market computers. Linux has only begun to be usable on the desktop around 2005-ish, Mac always was expensive because you had to buy Macs.
The old rule about having to justify acquiring proprietary services or using proprietary formats disappeared. It was there by decree, so it could vanish from one day to another.
The rules about open formats for data disclosure are written in law, and the decrees about data interchange require open formats too.
As a consequence, the most people-facing roles of governments reverted to old habits (or maybe there were bribes involved, I wouldn't know, but it surely didn't require bribes, those people never stopped using Word for everything), while the more central roles are migrating into web-systems and open formats.
I’m disappointed but not surprised that the title is editorialized. It specifically leaves off “whistleblower alleges”. It’s literally one disgruntled former employee claiming this. But as usual for HN these days a tiny populations claim - in this case a population of one - is stated as fact.
I think this is an excellent document that should really be the main article.
One of the things I think this really highlights, and that absolutely infuriated me during the Trump impeachment hearings, was that categorizing a whistleblower as a "disgruntled former employee" does not negate the evidence that they show of malfeasance.
I mean, of course whistleblowers are usually disgruntled about something, but a major point of whistleblower protection laws is that the motives of the whistleblower do not matter. To the GP comment's point, it's true we shouldn't just take accusations as proof, but the whole role of a whistleblower is to provide the "thread" that investigators can then pull on to get detailed evidence of what was going on. And, given the links to documents in the above post, I think this looks really, really bad for Microsoft.
What’s your point? One whistleblower alleged the NSA of the US was illegally conducting bulk surveillance across the entire world, including its own citizens. A court later ruled this program was illegal and unconstitutional.
Are you saying we should discount all whistleblowers because it doesn’t fit some preset narrative?
Did you expect an army of whistleblowers? Aren't most whisteblowers solitary and generally disgruntled former employees? Your first point has some merit but is diminished by your attack on the whisteblower. Whistleblower laws exist to encourage disgruntled employees to expose wrongdoing in corporations/governments/etc. Not sure why you are so quick to dismiss the whistleblower in this case.
Bribery is pretty common. In many countries you almost cannot do anything without greasing wheels. My Father was a head of publicly traded pharma. Stories he had about China and India in particular were fascinating and sad at the same time. One time he was told that somebody dumped a huge pile of paper trash in front of his newly opened drug packaging facility in China. He investigated to find there culprit. It turns out it was from a paper factory owner nearby. Asked why he did it, his answer was : “you didn’t use my company as your paper supplier”. My fathers response: “how was I supposed to know there was a paper supplier nearby!! And why didn’t you come and introduce yourself before ?!?!”
He ended up using the supplier and they did haul away the mountains of trash.
Western countries look the other way when their companies exploit poor countries. Then let the same corrupt money to be be taken out from those poor countries and hidden in their banks and property markets. Microsoft is not alone in this many other companies do the same. I personally feel the biggest hate from the west for the chinese so called road and belt initiative is not that China is exploiting these countries rather China has pushed them out and taken over their scam.
Well there is a geopolitical perspective to this as well right? Wouldn't want our biggest adversary to have strategic influence over these nations. Not to mention the potential intelligence capabilities from installing our equipment rather than theirs. Whether one country is more righteous than the other doesn't matter at this point - you should be rooting for the country that your survival depends on.
People like to imagine that international relations are completely amoral; it's a sort of thrilling, Game-of-Thrones type fantasy. But that's not the case at all.
Look at the EU, NATO and other US alliances (e.g., with Japan). They are connected held together by values. They are very imperfect and corrupt, but these alliances have lasted so long because there is no way, for example, Germany is attacking France again. It just doesn't make any sense, because of the values.
International relations are fundamentally (but certainly not wholly) anarchy, but anarchy doesn't exclude values - perhaps it makes them even more powerful, relatively. As some have said, to a great degree, right makes might.
In practice, blowback is one result of ignoring it: The US supported the Shah, a brutal dictator in Iran. When the Shah lost power in ~1979 - well, you can see that the US is still paying a price. The US supported some unsavory people to fight the Soviets in Afganistan; some of those people became Al Qaeda. The US armed and trained brutal right-wing militias in Central America to suppress enemies; some of them became today's Central American drug gangs. Meanwhile, while the US promotes democracy and freedom, it draws many, many into its orbit around the world.
at least you're honest, most people don't get this far. but doesn't make your stance moral, I cannot justify keeping poor countries poor because of petty concerns like "we must remain #1"
Readit News
After all the business ethics training videos I had to sit through, I am infuriated by this.
Edit: By training everyone, not just the people directly involved with such situations, anyone considering corrupt acts will know that everyone - from the tech support person who helps them send the corrupt message to the receptionist who takes the corrupt call to the finance underling who mails the check - everyone will recognize it. There is no talking the rube into helping them; there are eyes everywhere, all the time.
And also obeisance -- on the part of the person required to sit through these trainings (and pretend that they had some connection to reality).
This is the definition of ineffective training :)
Initially the training software was badly written so you could just open up DevTools and type "v = document.querySelector('video'); v.currentTime = v.duration - 1000;" or similar and just bop through the sections. Later they seemed to track time on the server, so really the most I could do is turn off the window focus check and leave the tab open in a second monitor. So annoying.
Microsoft does business worldwide, of course. Wouldn't that imply that many are in that position?
We laughed. Instructor not so much.
Did you have similar guidelines inside Microsoft?
[1]: https://news.ycombinator.com/item?id=30760923
That was... interesting to say the least.
As one there before, during, after that little DoJ/IE kurfluffle, I recall the guidelines to be simple: there are things you don't talk about in email[0]. Which is why this Google thing mystifies me: why are you talking about it in email at all? And then to rely on what sounds like some crackpot legal theory? (I mean, maybe it's not, and IANAL, but it reeks of "sovereign citizens don't have to pay taxes".)
[0] Yes, that is a vast oversimplification (though accurate) to make a point.
LOL that's NOT how discovery works
[1] - "The Constitution of the Russian Federation"
Article 17
1. In the Russian Federation recognition and guarantees shall be provided for the rights and freedoms of man and citizen according to the universally recognized principles and norms of international law and according to the present Constitution.
2. Fundamental human rights and freedoms are inalienable and shall be enjoyed by everyone since the day of birth.
3. The exercise of the rights and freedoms of man and citizen shall not violate the rights and freedoms of other people.
Article 18
The rights and freedoms of man and citizen shall be directly operative. They determine the essence, meaning and implementation of laws, the activities of the legislative and executive authorities, local self-government and shall be ensured by the administration of justice.
Article 19
1. All people shall be equal before the law and court.
2. The State shall guarantee the equality of rights and freedoms of man and citizen, regardless of sex, race, nationality, language, origin, property and official status, place of residence, religion, convictions, membership of public associations, and also of other circumstances. All forms of limitations of human rights on social, racial, national, linguistic or religious grounds shall be banned.
3. Man and woman shall enjoy equal rights and freedoms and have equal possibilities to exercise them.
and so on...
[1] http://www.constitution.ru/en/10003000-03.htm
https://www.youtube.com/watch?v=Ggz_gd--UO0
Most of the trainings are about a fine we got due to being caught doing something bad, say 10 years ago, and part of legal settlement is apart from direct fine, a nice 30-60 min training where they tell you that stealing and lying and cheating is bad.
Those trainings keep re-appearing quite consistently so they are really not that effective.
Implication: they can fire that employee and continue to give bribes.
Ps. Full disclosure, I never witnessed anybody giving bribes, nor worked with anyone who would be in a position to do so.
Dilbert: Is it ethical to steal our lunch hour to make us attend a work class?
Pointy Haired Boss: I wouldn't know, I'm not required to take the training.
Who had been fired.
For running HR like a harem.
—Composer and Software Architect Frank Wilhoit
https://crookedtimber.org/2018/03/21/liberals-against-progre...
Deleted Comment
Former here, too, I found it part of "big company" overhead. Had similar things many years ago at a different European based employer.
I'm infuriated that I'm being offered t-shirts and maybe a lunch and someone else out there is getting a cook for a month. Damn right I'm taking the cook.
Deleted Comment
I imagine Microsoft looks the other way while resellers make lots of money because, realistically, being in some of the markets mentioned is impossible unless you're connected with the right person. While not necessarily efficient, I wouldn't call that illegal or even unethical without a lot more detail than this article provides.
But maybe I'm missing something. This article reads as poorly researched, and the whistleblower comes off as disgruntled more than ethical.
Edit: It's worth noting that the whistleblower's original words are a little more well-written than this article [1]. However, it makes the contrast clearer between what is factual vs what is only insinuated.
1: https://www.lioness.co/post/microsoft-is-using-illegal-bribe...
The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq. ("FCPA"), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.
Since 1977, the anti-bribery provisions of the FCPA have applied to all U.S. persons and certain foreign issuers of securities. With the enactment of certain amendments in 1998, the anti-bribery provisions of the FCPA now also apply to foreign firms and persons who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place within the territory of the United States.
The FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions. See 15 U.S.C. § 78m. These accounting provisions, which were designed to operate in tandem with the anti-bribery provisions of the FCPA, require corporations covered by the provisions to (a) make and keep books and records that accurately and fairly reflect the transactions of the corporation and (b) devise and maintain an adequate system of internal accounting controls.[1]
I'm not a lawyer, but at worst it's starkly clear to me that this runs afoul of the law. Might I suggest it may be the awareness of it is the something you are missing?
https://www.justice.gov/criminal-fraud/foreign-corrupt-pract...
For me to take this farther than "that's how reselling works," there'd need to be some signs that Microsoft employees or government officials were seeing kickbacks from these inefficient deals...basically, the resellers were the ones doing the bribing. The whistleblower seems to be insinuating that's happening, and maybe it is, but there's no hard evidence of it here or that it's something systemic that Microsoft is promoting (indeed, Microsoft would be one of the victims in that case). Without more detail on what exactly Microsoft was extracting out of these circumstances I find the whole thing vague.
The same article says to maintain counsel or ask the DOJ for advice if you want to operate in a gray area of the law, implying such behavior is common.
Last I checked, Microsoft had an army of lawyers and also a good relationship with parts of the DOJ.
This section in particular is damning,
> In another instance, he saw a contractor for the Saudi interior ministry receive a $13 million discount on its software — but the discount never made it back to the end customer. In another case, Qatar’s ministry of education was paying $9.5 million a year for Office and Windows licenses that were never installed. One way or another, money would end up leaking out of the contracting process, most likely split between the government, the subcontractor, and any Microsoft employees in on the deal.
These "subcontractors" are usually relatives of people in Government, and they're bribing these officials, then splitting money between all of them in exchange for contracts. This is illegal under the Foreign Corrupt Practices Act.
The whistleblower wrote a post detailing his accusations here, https://www.lioness.co/post/microsoft-is-using-illegal-bribe...
These provide even more color.
> In 2016, a request came through in the amount of $40,000 to accelerate closing a deal in one African country. [...] On top of that, the partner in the deal was underqualified for the project’s outlined scope, and he wasn’t even supposed to be doing business with Microsoft: he had been terminated four months earlier for poor performance on the sales team, and corporate policy prohibits former employees from working as partners for six months from their departure without special approval.
> I brought these issues up with the Microsoft services architect who wrote the request, asking why she didn’t take the work in this case to our very capable in-house team, Microsoft Services. She said our in-house daily rate is very expensive, and she needed a less expensive team to handle the pilot.
and then,
> Meanwhile, the woman’s manager sought me out, angry that I had bypassed him; I told him I was only following company policy. Soon after, he was promoted and became my manager. He immediately scheduled a one-on-one meeting, in which he told me our job is to bring as much revenue as we can to Microsoft. He added, “I don’t want you to be a blocker. If any of the subsidiaries in the Middle East or Africa are doing something, you have to turn your head and leave it as is. If anything happens, they will pay the price, not you.” When I said I would not block anything unless it violated company policy, his tone took a sharp turn. He shouted that I was not capable of doing this business and couldn’t close deals. But my 18-year track record spoke for me.
He escalates, but no one does anything, so he writes to the CEO.
> The aforementioned vice president immediately got back in touch with me, to say that by escalating the matter to Nadella, I had just “booked a one-way ticket out of Microsoft.”
> A general manager told me people panicked when I came to the subsidiary offices, and I had become “one of the most hated persons in Africa.” Only later did I realize this was because I asked too many questions; I was stopping people from skimming money off their deals.
This is a classic culture of corruption. It doesn't get starker than this.
> Examining an audit of several partners conducted by PricewaterhouseCoopers, I discovered that when agreeing to terms of sale for a product or contract, a Microsoft executive or salesperson would propose a side agreement with the partner and the decision maker at the entity making the purchase. This decision maker on the customer side would send an email to Microsoft requesting a discount, which would be granted, but the end customer would pay the full fee anyway. The amount of the discount would then be distributed among the parties in cahoots: the Microsoft employee(s) involved in the scheme, the partner, and the decision maker at the purchasing entity—often a government official.
Walmart got caught recently doing something very similar, https://www.sec.gov/news/press-release/2019-102
https://www.reuters.com/article/us-walmart-fcpa/walmart-to-p...
You can see the timeline of FCPA cases here,
https://www.sec.gov/enforce/sec-enforcement-actions-fcpa-cas...
I get that bribery happens, and I get that the SEC stepped on Microsoft employees for bribery in Hungary. I also get the impact that bribery and corruption has on lives. None of that is material to what's being said about this situation. In fact, it's relying on the reader's passion to make these leaps.
If a company is required to pay, say, $3,000 to a corrupt official to pass a checkpoint and get access to an area where they have some business to tend to, then scale that economically to a multinational conglomerate like Microsoft who might do business in that same area 35 times in a week for various reasons and the amount of bribe money flowing out of their coffers increases to scale.
Pretty much all of the public system uses windows as OS, and most of the times it's just to use a browser to access a webapp. But there are actual windows lock-ins (due to people training and existing workflow/infrastructure that has no incentive to change), such as MS Office and Adobe Reader.
So there was no reason for Microsoft to bribe decision-making people to use windows, windows was already firmly locked in, they did it just so they can overprice licenses and for them to accept leased licenses instead of a permanent one time pay windows license. Big win for MS and bribe takers, big loss to common decency and public spending availability.
A sign of a healthy democratic government can be seen in the decisions to build future public software infrastructure on open source technology, and use Linux as client/server OS (as it's pretty much the only other alternative offering similar ease of use/maintenance/compatibility with existing software).
edit: wrote this to show it's not necessarily the cost of doing business, in most places, because the software ecosystem is already locked in and can't be replaced overnight and without considerable spending. It's just the cost of extracting more public money. And sometimes it's the cost to keep the business safe from decisions to steer towards Opensource: https://en.wikipedia.org/wiki/LiMux
All the blood, sweat and tears we gave during the early 2000's to make FLOSS the standard, how we advocated for it on grounds of openness and auditability, how it would - and did! - help foster a local industry... All this work and see it being undone by the current government and their cronies.
As a note, São Paulo state, where I lived, was a very reliable income source for Microsoft.
The entity of the bribes from MS are above average.
Not saying it's right, I'm just saying that I thought there might be a legal distinction.
The rules about open formats for data disclosure are written in law, and the decrees about data interchange require open formats too.
As a consequence, the most people-facing roles of governments reverted to old habits (or maybe there were bribes involved, I wouldn't know, but it surely didn't require bribes, those people never stopped using Word for everything), while the more central roles are migrating into web-systems and open formats.
Usually the latter, often it is just marketing, but you can never discount the former, and the lines are often blurred.
https://www.lioness.co/post/microsoft-is-using-illegal-bribe...
One of the things I think this really highlights, and that absolutely infuriated me during the Trump impeachment hearings, was that categorizing a whistleblower as a "disgruntled former employee" does not negate the evidence that they show of malfeasance.
I mean, of course whistleblowers are usually disgruntled about something, but a major point of whistleblower protection laws is that the motives of the whistleblower do not matter. To the GP comment's point, it's true we shouldn't just take accusations as proof, but the whole role of a whistleblower is to provide the "thread" that investigators can then pull on to get detailed evidence of what was going on. And, given the links to documents in the above post, I think this looks really, really bad for Microsoft.
Deleted Comment
Are you saying we should discount all whistleblowers because it doesn’t fit some preset narrative?
He ended up using the supplier and they did haul away the mountains of trash.
Look at the EU, NATO and other US alliances (e.g., with Japan). They are connected held together by values. They are very imperfect and corrupt, but these alliances have lasted so long because there is no way, for example, Germany is attacking France again. It just doesn't make any sense, because of the values.
International relations are fundamentally (but certainly not wholly) anarchy, but anarchy doesn't exclude values - perhaps it makes them even more powerful, relatively. As some have said, to a great degree, right makes might.
In practice, blowback is one result of ignoring it: The US supported the Shah, a brutal dictator in Iran. When the Shah lost power in ~1979 - well, you can see that the US is still paying a price. The US supported some unsavory people to fight the Soviets in Afganistan; some of those people became Al Qaeda. The US armed and trained brutal right-wing militias in Central America to suppress enemies; some of them became today's Central American drug gangs. Meanwhile, while the US promotes democracy and freedom, it draws many, many into its orbit around the world.
Coincidentally, here is an article that very issue in US property markets:
https://news.ycombinator.com/item?id=30805296
Dead Comment