26 ms·

Microsoft is tied to hundreds of millions of dollars in foreign bribes

610 points by jrepinc 5y ago

softwarebeware 5y ago
Kudos to Yasser Elabd! This man sounds awesome. This part particularly stood out to me: > When he refused a performance improvement plan, he lost the job and left Microsoft for good in August 2018. I didn't know you could refuse a PIP. TIL
- tstrimple 5y ago
  You can do whatever you want if you don't mind losing your job.
anonymousDan 5y ago
Fair play to this guy whoever he is. If only more people had his integrity.
- cute_boi 5y ago
  He is an anomaly, and we are lucky that people like him exist. The system incentivizes pretentious, artifice people who trick people via skulduggery. And, M$ should realize that committing such unforgivable sins like corruption in Africa means they are responsible for hunger and poverty in Africa. If the atrocities were committed by Chinese/Indian companies, the media would have vehemently criticized those countries and companies. But, as long as US and EU are involved media seems to be silent which I don't like.
  - tyrfing 5y ago
    > If the atrocities were committed by Chinese/Indian companies, the media would have vehemently criticized those countries and companies. But, as long as US and EU are involved media seems to be silent which I don't like. That's ridiculous. Compare Ericsson to ZTE/Huawei, for example. Of course it'll get coverage in the US media though, it's mainly the US DOJ that will prosecute those foreign companies for bribery - not their own governments.
    - known 5y ago
marricks 5y ago
Fridays are the days most interesting news lands because it’s easiest to sweep it under the rug with the weekend. I wish news organizations where more courageous and held on to this stuff to Monday/Tuesday.
- twblalock 5y ago
  Waiting several days to publish news is not courageous -- it's just late. The public expects news organizations to publish the news as soon as it's known.
- softwarebeware 5y ago
  Looks like it was "..the whistleblower platform Lioness.." that released it today. Interesting that you point out it would have been more effective in the news cycle if it had landed another day. Perhaps this is a case of Hanlon's Razor and the whistleblowers need to get more savvy.
- ziml77 5y ago
  Wouldn't people be more likely to see something in the news on a day when they're not busy with work?
  - beeboop 5y ago
    General usage patterns across the internet usually show a decline in use on weekends.
Woodi 5y ago
So, MS was hacked day or two ago and damage control appears already ? :>
otterley 5y ago
Source article: https://www.lioness.co/post/microsoft-is-using-illegal-bribes-in-the-middle-east-and-africa-why-is-the-sec-turning-a-blind-eye https://www.lioness.co/post/microsoft-is-using-illegal-bribe...
VyseofArcadia 5y ago
Former Microsoftie here. After all the business ethics training videos I had to sit through, I am infuriated by this.
- stocknoob 5y ago
  Rules are for the little people.
  - cjbgkagh 5y ago
    It’s part of negotiating down punishments, in lieu of a big fine we’ll agree to force our staff to watch ethics videos.
- asd88 5y ago
  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?”.
  - tedajax 5y ago
    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."
    - dennis_jeeves1 5y ago
      Exactly...
    - saalweachter 5y ago
      On the other hand, if network errors could be debugged by bribing foreign officials, I'm assuming there would be a lot of rather rich foreign officials.
  - russellbeattie 5y ago
    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.
lemoncookiechip 5y ago
> "What is a shock: This time around, the SEC and DOJ have both declined to investigate Microsoft over the same types of bribes in the Middle East and Africa. They acknowledged my evidence (which I submitted three times) yet did not take up the case, claiming that the current pandemic has prevented them from gathering more evidence from abroad—even though I have already provided documentation that I believe shows Microsoft is in breach of the 2019 agreement and is still participating in corrupt business practices in direct violation of U.S. law." I have no words for this one. I guess being a trillion dollar company comes with a lot of benefits. Source: https://www.lioness.co/post/microsoft-is-using-illegal-bribes-in-the-middle-east-and-africa-why-is-the-sec-turning-a-blind-eye https://www.lioness.co/post/microsoft-is-using-illegal-bribe...
- encryptluks2 5y ago
  The same bribes/kickbacks are very big in government contracts. Not sure what the DoJ would do when they would up investigating themselves.
  - raincom 5y ago
    With one major difference: in Africa, in general in the third world countries, whom to bribe, how much to bribe, who is the intermediary who handles the bribes, etc--are common knowledge. In the developed word, that is secret--only accessible to the super wealthy.
  - yonaguska 5y ago
    The military industrial complex, and the intelligence communities are above the government. Investigations would never take place, unless they were fake and only to placate the public. Lots of our dark foreign policy, is orchestrated through NGO's like the National Endowment for Democracy, where they then go on to do all kinds of illegal things in other countries. All is legal in the name of "national security".
- thathndude 5y ago
  To the extent the article gets anything wrong, it's the focus on just Microsoft. Microsoft is not some lone, bad actor here.
encryptluks2 5y ago
I think almost with any common sense would recognize this. It happens a lot in the US as well and in academia, but most of all government services. People get kickbacks, Microsoft helps with marketing... so and so switched to Microsoft, here is what they have to say about how it helped the organization. Except, they never talked to the employees who would have told you how they hate it and it actually makes their jobs worse. People realize they are powerless and just leave or accept it as a normal part of business and the practice continues.
civilized 5y ago
Microsoft spokesperson: "how dare you single us out, obviously everyone is doing this"
- johnny_canuck 5y ago
  The headline reminded me of the SNC-Lavalin affair in Canada https://www.reuters.com/article/uk-snc-lavalin-court-idUKKBN1YM2CN https://www.reuters.com/article/uk-snc-lavalin-court-idUKKBN...
- cute_boi 5y ago
  They also have habit of saying, "If we don't do this, Chinese company will do this and so what we are doing is clearly a benevolent act on humanity. To erase this blemish Microsoft shall donate 5 computer to Nigeria to help those poor kids to draw something in MS Paint"
Qem 5y ago
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.
- mistrial9 5y ago
  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
- rapsey 5y ago
  MS is insanely powerful pretty much in every country in the world. They know damn well how to get into the power structures.
  - mschuster91 5y ago
    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.
    - worik 5y ago
      That is untrue. In 1995 the Windows GUI was complete trash The Linux GUI much better. I was the sole Linux guy (Microsoft Windows 95 mostly plus a HP Unix workstation the boss controlled fromOS/2 desktop). The windows machine constantly crashed and ran like a steam roller in two feet of mud. Lots of mess, not much speed. It was not the quality of the operating system that made Microsoft successful. They were successful despite having the worst operating system in that room. Significantly worse.
    - wolverine876 5y ago
Dracophoenix 5y ago
I reckon Microsoft and others haven't learned from Lockheed in the 70s. It'll only be a matter of time before we hear about other charges regarding Apple and Google
- spaetzleesser 5y ago
  It may be that they have learned from Lockheed and tried to do the bribes in a better way.
- azemetre 5y ago
  What is the lesson you're alluding too?
  - FourHand451 5y ago
    There are a few: https://en.wikipedia.org/wiki/Lockheed_bribery_scandals https://en.wikipedia.org/wiki/Lockheed_bribery_scandals
- dukoid 5y ago
  Every generation has to re-learn this lesson? https://en.wikipedia.org/wiki/Lockheed_bribery_scandals https://en.wikipedia.org/wiki/Lockheed_bribery_scandals
  - topspin 5y ago
    Has it been one full generation since the SEC was handed evidence of fraud (Madoff) and blew it off? That was only 14 years ago.
Shadonototra 5y ago
I knew it, their only way to push their services globally was to resort to that kind of behavior with dirty money
legalcorrection 5y ago
The Foreign Corrupt Practices Act should be repealed and American companies should be allowed to compete on equal footing with their foreign competitors. No other country, even if it technically has an FCPA-like law on the books, actually enforces it to the extent the US does. It means that everyone is free to openly participate in bribery to win foreign markets, markets where bribery is just how business is done, while American companies have their hands tied behind their backs. This has overall been a major hamper on American competitiveness while being a huge boon to middle-men and white collar criminal defense lawyers who specialize in working around the laws and defending against prosecutions.
- spaetzleesser 5y ago
  I am against that. The result could be that US companies would go all in on bribing and make the countries even more corrupt. It would make the US even more hypocritical when they preach ethics to the world.
  - InitialLastName 5y ago
    Perhaps (and I recognize that this is controversial) the US should reconsider its habit of preaching ethics to the world.
- deleted 5y ago
  [deleted]
- mring33621 5y ago
  I don't like it but I think this is a realistic opinion. Maybe overseas bribes become legal, but must be disclosed in a publicly-accessible format.
- otterley 5y ago
  Do you think our laws should be tuned for maximum profit, or to reflect who we are, ethically and morally, as a society?
  - 5y ago
nashashmi 5y ago
There is a lot of supposition from the article based on a single source that these payments were bribes. These kinds of articles are really calling wolf when there are none. And potentially downplay instances when actual wolves are spotted. This is a hit piece from a potential competitor trying to do business in the same market. Going to add further the article has way too much fluff. It’s a play on reader psychology to turn them against Microsoft.
- hammock 5y ago
  Agreed. Reminds me of the payments of as much as $183K a month from a Ukrainian natgas company to a man with no energy sector experience that just happened to be the son of the US Vice President. There's no evidence it was a bribe, just a hit piece, probably from a competitor like Russia
  - nashashmi 5y ago
    Hilarious.
  - hirako2000 5y ago
    Did you mean former vice president? his father got a new job last year.
- digisign 5y ago
  What kind of payments should vendors be making regularly to customers?
  - nashashmi 5y ago
    Accounting malpractice is a common problem in non western nations. Negotiators will personally take money in name of their employer.
gjsman-1000 5y ago
I wonder if this explains the shocking incompetence of the Windows division...
jonpo 5y ago
Ohh man my ESG ETF is suddenly evil..
- svachalek 5y ago
  I was very interested in ESG until I saw that pretty much all ESG funds had Facebook in the top handful of holdings. Because they're easy on the environment compared to an aluminum smelter, and somehow destroying democracy around the world doesn't count as a social or governance issue. I've changed my focus to owning shares via funds that will vote my shares with some sort of conscience. (Vanguard is the rock bottom on that metric, btw.)
  - Nextgrid 5y ago
    > Vanguard is the rock bottom on that metric Could you recommend alternative funds that are more ethical?
- npteljes 5y ago
  What difference did the article make, compared to this below? https://en.wikipedia.org/wiki/Criticism_of_Microsoft https://en.wikipedia.org/wiki/Criticism_of_Microsoft
bnt 5y ago
Let's see how The Verge falls out of Microsoft's grace moving forward. The Verge had (what feels like) direct access to top MS execs for all product launches. I guess those days are over. Don't get me wrong, if this was picked up by the SEC or DOJ - I'd take it more seriously, but it sounds like accusations with no real proof.
- tombert 5y ago
  Wouldn't that be evidence that they have less reason to lie about this? This is potentially burning a bridge, which could potentially cost them financially long term.
- boomboomsubban 5y ago
  Will MSN also fall out if Microsoft's grace? https://www.msn.com/en-us/news/us/microsoft-allegedly-connected-to-dollar200-million-in-bribes-each-year/ar-AAVuB67 https://www.msn.com/en-us/news/us/microsoft-allegedly-connec...
  - deleted 5y ago
    [deleted]
xbmcuser 5y ago
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.
- president 5y ago
  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.
  - bllguo 5y ago
    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"
  - wolverine876 5y ago
    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.
digisign 5y ago
Reminds me of this great piece (and hn discussion) regarding corporate bribery during the Watergate years: https://longreads.com/2018/11/20/the-second-half-of-watergate-was-bigger-worse-and-forgotten-by-the-public/ https://longreads.com/2018/11/20/the-second-half-of-watergat... https://news.ycombinator.com/item?id=18498796 https://news.ycombinator.com/item?id=18498796 This reads as the modern chapter to the story.
spaetzleesser 5y ago
I bet this is normal procedure for most companies that do business in countries where bribes are common. In Germany foreign bribes used to be even deductible.
- worik 5y ago
  It is arguable that the prohibition of bribes is a cultural thing. So insisting on not bribing in other cultures is some sort of "imperialism". That would make bribing foreign officials a "legitimate" business expense.
  - spaetzleesser 5y ago
    Problem is that foreign entities bribing in foreign cultures is an even worse form of imperialism. Big corporations with deep pockets could totally distort the market in these countries by bribing generously instead of competing by merit. It’s bad enough that lobbying (some may call it bribing) money plays such a big role in US economic policy so let’s not make it even worse. Especially large scale bribing corrupts countries and their culture. Capitalism is only useful if there is honest competition in the market.
    - jhanschoo 5y ago
      > Big corporations with deep pockets could totally distort the market in these countries by bribing generously instead of competing by merit. As opposed to the market in these countries already being distorted due to domestic bribes? > Capitalism is only useful if there is honest competition in the market. It's therefore not clear to me how a market under such a corrupt regulatory regime is already well-served without the supply-side bribing one's way in, when the cost for an enlightened business owner to be a legitimate player is already bribery. On the flip side, with bribery, the bribery cost to do business for well capitalized foreign players is higher, so there are dynamics that work against the foreign imperialist in a corrupt regime.
  - wolverine876 5y ago
    If bribes are ok, why don't the criminals openly advertise their prices and what they are doing? Bribes do economic harm to people of the country, whether we call it 'culture' or something else.
sgm_ro 5y ago
This has been common knowledge for me for a long time, after this case surfaced in the media here in Romania: https://en.wikipedia.org/wiki/Microsoft_licensing_corruption_scandal https://en.wikipedia.org/wiki/Microsoft_licensing_corruption... 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 https://en.wikipedia.org/wiki/LiMux
1024core 5y ago
The only way to stop this is to give the whistleblower a large cut of the fine: say, 50%. That will drive up the incentive to whistleblow; otherwise, all you get is a pink slip and a spot in the soup kitchen line.
- boeingUH60 5y ago
  The US SEC started a similar program in 2012, but with a smaller cut (10-30%). It's been quite successful, with $1 billion+ in whistleblower awards so far https://www.sec.gov/news/press-release/2021-177 https://www.sec.gov/news/press-release/2021-177
deleted 5y ago
[deleted]
peter_retief 5y ago
Billions get paid to Microsoft from countries with starving people. This has always upset me and I do not use Microsoft.
Gepsens 5y ago
Foreign companies get fined billions for doing the same when it doesn't please Uncle Sam...
known 5y ago
DoneWithAllThat 5y ago
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.
- treis 5y ago
  The piece written by the whisteblower includes links to documents: https://www.lioness.co/post/microsoft-is-using-illegal-bribes-in-the-middle-east-and-africa-why-is-the-sec-turning-a-blind-eye https://www.lioness.co/post/microsoft-is-using-illegal-bribe...
  - hn_throwaway_99 5y ago
    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.
  - deleted 5y ago
    [deleted]
- sha256sum 5y ago
  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?
bumblebritches5 5y ago
markdown 5y ago
Not just foreign bribes: https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D000000115 https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D...
bstar77 5y ago
And much of this is to convince governments to not go open source. This kind of behavior is part of Microsoft's DNA.
sakex 5y ago
Bribing in Africa is so common it could be considered a business practice
- notriddle 5y ago
  That's an essential part of it. "We ordered them to not accept bribes! Never mind that we also ordered them to somehow convince these governments to run licensed copies of Windows instead of cracked copies, and since it costs them money while buying them nothing, the only way it could possibly be done is bribery. It's not our fault because we told them not to!"
- datavirtue 5y ago
  And in many other parts of the world. It is so bad that businesses in n the US did adopt it as a practice. The ballooned to such epic porportions that the US Senate sponsored a bill to make it in illegal. If it had been kept down to a mild roar the law would still be missing from the books. It is still bad because the incentives are still in place. Throw a little bit of money at a few people, get your business locked in. If you get caught you pay a very small portion of the profits and get to keep your business deal in place. The fines are a joke, and the rules are indeed for the little people.
- carapace 5y ago
  I worked briefly for a startup that wanted a .sy domain. That's Syria. They had to get the State Dept. involved (Hillary Clinton had to sign one of the documents, she was Sec. of State at the time.) The package they sent to Syria was a kind of Matryoshka doll: a package with some grease (cash!) and another package inside, that in turn had the grease for the next level of the bureaucracy and another package for them to pass on, which contained more grease and another package... All in all four or five layers of payments and bureaucracy. They got the domain name but then abandoned it for some reason I don't know (I suspect it was just more trouble than it was worth to have "foo.sy" and deal with Syrian government rather than just "foosy.com".) US$20,000 down the drain. FWIW this was all official enough that it wasn't legally bribery.
- hulitu 5y ago
  It is not limited to Africa. First world countries like to call it with a different name: lobby.
GoodJokes 5y ago
[dead]
locusofself 5y ago
Jesus do you know how many training videos about anti-corruption and bribery I've had to watch as an MS employee?
- timcavel 5y ago
lkxijlewlf 5y ago
I am just so sick of all the cheating. Every time you turn around, some business, politician, or wealthy person is corrupt as f** and everyone who can do anything about it won't.
- datavirtue 5y ago
  It's almost as if the people should form a more perfect union.
- wolverine876 5y ago
  What are you doing about it? It's a democracy - like open source software, if you don't like it, change it.
  - hulitu 5y ago
    It is not a democracy. It is a corrupted democracy.
    - wolverine876 5y ago
      Every human being, organization, institution, software project, and democracy is corrupted to some degree. It's right their in the foundations of every philosophy and religion - it got us kicked out of Eden. If we do anything in life, it's with and through these human institutions, which are corrupt to some degree. It's up to us to make them less corrupt and to do things for humanity - there's nobody else who does anything; no alien cavalry is coming; it's just us.
  - lkxijlewlf 5y ago
    Funny who always gets stuck with the burden.
timcavel 5y ago
mupuff1234 5y ago
If a government organization would want to use a Linux, how hard would it actually be? Is it a viable alternative?
- pid-1 5y ago
  I don't think govs are different from your average company. Having a Linux based business is hard, for a few reasons: - Destkop Linux sucks - You need experienced sysadmins. There is no Linux equivalent to AD / Azure AD in terms of simplicity, as far as I know. Also true for other stuff like app management. - User resistance, as few people use Linux as their daily OSes
  - nivenkos 5y ago
    But on the other hand they have a much bigger incentive than a company to be able to have a system they control and can use throughout different public administrations.
  - mupuff1234 5y ago
    I wonder if we will see a push from Google with chrome os.
    - bastawhiz 5y ago
      They have already pushed and many companies ship Chrome OS to their employees. It's extremely common for non-technical folks.
  - worik 5y ago
    Desktop Linux does not suck. It has not sucked since about 1993 If you compare Linux 1993 to Mac SO 2022 it still stacks up, almost. Comparing Linux 1993 to MS Dos of the time is unfair. It took MS till about 2000 to be able to compete with Linux on quality MS Windows was successful for other reasons than the operating system.
    - pid-1 5y ago
cryptica 5y ago
> "they’re promoting the bad people. If you’re doing the right thing, they won’t promote you." I can relate to this. Seems to be an industry-wide phenomenon. It probably explains what's going on with the world.
cryptica 5y ago
We have to abolish corporations. Nationalize them. The concept of an entity which spares directors from liability is ridiculous... It's a financial instrument designed for scams and nothing else.
daniel-cussen 5y ago
Couldn't bribe North Korea. I can't believe Juche actually worked.
LorenPechtel 5y ago
Unfortunately, we are left with the problem that it can be very hard to tell the difference between a bribe and a grease payment. The latter are an unfortunate reality that companies can't realistically function without--and not just in the third world.
- beaconstudios 5y ago
  They're the same thing.
  - LorenPechtel 5y ago
    No. A bribe is a payment to get them to do something improper. A grease payment is to get them to do what they should have done anyway. They look the same on the surface but they're very different underneath. The former is illegal, the latter is legal (but good luck trying to show it's not a bribe when it happens in the US.)
    - beaconstudios 5y ago
      If you're paying an official personally to "fast track" an official process, that's a bribe. Grease payments are just a subset of bribery. Just because it's normalised in some countries, doesn't make it a different thing.
jnwatson 5y ago
To be clear, this is not (just) a matter of ethics. If true, these acts are in violation of the US Foreign Corrupt Practices Act. Each violation can be up to 5 years in prison.
chrismcb 5y ago
I like how there is a ton of commentary on how to skip ethics training. If you are thinking of skipping ethics training... That training might be targeted at you.
will_walker 5y ago
Primary complaint document: https://www.lioness.co/post/microsoft-is-using-illegal-bribes-in-the-middle-east-and-africa-why-is-the-sec-turning-a-blind-eye https://www.lioness.co/post/microsoft-is-using-illegal-bribe...
worik 5y ago
I have been reading the comments about bribing foreign companies. Very interesting I think it is pertinent to remind people here, especially subjects of the USA, that in the USA bribing politicians is a formal and accepted practise. Records are kept, they are publicly available. The hypocrisy of those politicians is legendary for all sorts of reasons, this is just a minor point. Bribery is only illegal if done informally in foreign countries or the private sector.
- taxyz23 5y ago
  This is very misleading particularly for those not familiar US laws. If you want to say publicly disclosed campaign contributions with no quid pro quo is bribery than say so but that's not most people's definition of bribery. Democracy requires campaigns and campaigns require money.
  - worik 5y ago
    > If you want to say publicly disclosed campaign contributions with no quid pro quo is bribery than say so but that's not most people's definition of bribery. No. It is the "I will vote for this law if you contribute this much". In my country (New Zealand) that would get you jail time. Because it is bribery
4oo4 5y ago
If Microsoft can get away with this, what are the rest of the FAANGs doing that we don't know about? So nice that we legalized corruption and white collar crime in the United States, how disruptive!
say_it_as_it_is 5y ago
Why do Americans think that the rest of the world operates according to the illusion that America pretends to follow? Payoffs aren't always bribes. They're more like a tax.
- xtracto 5y ago
  Right... the PACs SuperPACs and other payments from private companies to lawmakers would be highly illegal in my country. Yet in the USA they are promoted and celebrated.
madrox 5y ago
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. 1: https://www.lioness.co/post/microsoft-is-using-illegal-bribes-in-the-middle-east-and-africa-why-is-the-sec-turning-a-blind-eye https://www.lioness.co/post/microsoft-is-using-illegal-bribe...
- jamal-kumar 5y ago
  An Overview 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-practices-act https://www.justice.gov/criminal-fraud/foreign-corrupt-pract...
sloan 5y ago
Why am I not surprised. Microsoft operates in all the sketchy countries.
throwaways85989 5y ago
Ah, yeah, company ethic lectures,pamphlets and statements. I love those on webpages.. right beside the company locations world map. Love it, when they then have branch offices, that "exclude" one another - as in you can not be active in both countries, without violating a law of one, and obviously bribing yourselves out of that to be active in both. At least they prevent some moral philosopher from starving, who got bribed to write this.
NoblePublius 5y ago
Corruption is why we win https://youtu.be/1yhAOs94n8k https://youtu.be/1yhAOs94n8k
akagusu 5y ago
No company becomes a billionaire company without bribing someone out there.
hedora 5y ago
Despite what the article says, the foreign corrupt practices act is intentionally full of loopholes. Don't take my word for it. Here's the Justice Department's opinion: https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act https://www.justice.gov/criminal-fraud/foreign-corrupt-pract... Tl;dr: If a US employee wires the money, is aware of / ordered the bribe or the bribery takes place on US soil, it is definitely illegal. Hire a lawyer or ask us before putting foreign employees in a position where they might engage in bribery of foreign officials that don't violate these rules. Be sure to perform thorough accounting in any case. Based on the allegations in the article, Microsoft seems to have been following the rules until the whistleblower started screwing up the "is aware of" part.
lizknope 5y ago
I've been working in the tech industry for 25 years. I've probably watched 10 different corporate ethics training videos that cover bribery and inappropriate gifts. At the end we have to answer a quiz to prove we weren't asleep. In all my time I have never had any control over money and no way to bribe someone even if I wanted to. About 5 years ago I check my email in the morning and there are emails from the corporate legal and PR teams about not answering any questions from reporters about a certain employee. They state this person is no longer an employee. I immediately google his name and find that he has been arrested on foreign bribery charges. Everyone in our team was laughing that he must have forgotten to take the mandatory corporate ethics and anti bribery training. What is the point of making us watch all these videos when we have no budget authority anyway while the C-level execs bribe people?
ComradePhil 5y ago
Everytime something like this comes up, westerners pretend that they are shocked, which I find hard to believe. Western aid agencies and humanitarian agencies work closely with corporations and third world governments to get their way. Oftentimes, these bribes are not as direct as alleged here. Instead, the corporations donate to humanitarian agencies, which then allocate it as budget in the target country in exchange for business deals. Most of the aid disappears in "admin expenses" i.e. it goes to fill the pockets of people making these deals with these corporations.
taxyz23 5y ago
Highly skeptical of this take. Lots of allegations claiming various payments are really bribes When all is said and done there will be few true bribes found and those will likely be by rogue relatively lower level or little supervised employees Suspect this is a disgruntled employee with a good lawyer who dreamed up a way to squeeze Microsoft. Who doesn't hate or want to hate Microsoft ? Big companies are well aware of the massive liability and associated legal costs under US federal law for bribery (domestic and foreign) and no way are they going to conspire systemically to destroy themselves. There have already been well documented and publicized federal bribery cases against companies such as Walmart. No legal department is going to tolerate bribery
deleted 5y ago
[deleted]
known 5y ago

610 points by jrepinc 5y ago

Kudos to Yasser Elabd! This man sounds awesome. This part particularly stood out to me: > When he refused a performance improvement plan, he lost the job and left Microsoft for good in August 2018. I didn't know you could refuse a PIP. TIL

tstrimple 5y ago
You can do whatever you want if you don't mind losing your job.

anonymousDan 5y ago

Fair play to this guy whoever he is. If only more people had his integrity.

cute_boi 5y ago
He is an anomaly, and we are lucky that people like him exist. The system incentivizes pretentious, artifice people who trick people via skulduggery. And, M$ should realize that committing such unforgivable sins like corruption in Africa means they are responsible for hunger and poverty in Africa. If the atrocities were committed by Chinese/Indian companies, the media would have vehemently criticized those countries and companies. But, as long as US and EU are involved media seems to be silent which I don't like.
- tyrfing 5y ago
  > If the atrocities were committed by Chinese/Indian companies, the media would have vehemently criticized those countries and companies. But, as long as US and EU are involved media seems to be silent which I don't like. That's ridiculous. Compare Ericsson to ZTE/Huawei, for example. Of course it'll get coverage in the US media though, it's mainly the US DOJ that will prosecute those foreign companies for bribery - not their own governments.
  - known 5y ago

marricks 5y ago

Fridays are the days most interesting news lands because it’s easiest to sweep it under the rug with the weekend. I wish news organizations where more courageous and held on to this stuff to Monday/Tuesday.

twblalock 5y ago
Waiting several days to publish news is not courageous -- it's just late. The public expects news organizations to publish the news as soon as it's known.
softwarebeware 5y ago
Looks like it was "..the whistleblower platform Lioness.." that released it today. Interesting that you point out it would have been more effective in the news cycle if it had landed another day. Perhaps this is a case of Hanlon's Razor and the whistleblowers need to get more savvy.
ziml77 5y ago
Wouldn't people be more likely to see something in the news on a day when they're not busy with work?
- beeboop 5y ago
  General usage patterns across the internet usually show a decline in use on weekends.

Woodi 5y ago

So, MS was hacked day or two ago and damage control appears already ? :>

otterley 5y ago

Source article: https://www.lioness.co/post/microsoft-is-using-illegal-bribes-in-the-middle-east-and-africa-why-is-the-sec-turning-a-blind-eye https://www.lioness.co/post/microsoft-is-using-illegal-bribe...

VyseofArcadia 5y ago

Former Microsoftie here. After all the business ethics training videos I had to sit through, I am infuriated by this.

stocknoob 5y ago
Rules are for the little people.
- cjbgkagh 5y ago
  It’s part of negotiating down punishments, in lieu of a big fine we’ll agree to force our staff to watch ethics videos.
asd88 5y ago
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?”.
- tedajax 5y ago
  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."
  - dennis_jeeves1 5y ago
    Exactly...
  - saalweachter 5y ago
    On the other hand, if network errors could be debugged by bribing foreign officials, I'm assuming there would be a lot of rather rich foreign officials.
- russellbeattie 5y ago
  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.

lemoncookiechip 5y ago

> "What is a shock: This time around, the SEC and DOJ have both declined to investigate Microsoft over the same types of bribes in the Middle East and Africa. They acknowledged my evidence (which I submitted three times) yet did not take up the case, claiming that the current pandemic has prevented them from gathering more evidence from abroad—even though I have already provided documentation that I believe shows Microsoft is in breach of the 2019 agreement and is still participating in corrupt business practices in direct violation of U.S. law." I have no words for this one. I guess being a trillion dollar company comes with a lot of benefits. Source: https://www.lioness.co/post/microsoft-is-using-illegal-bribes-in-the-middle-east-and-africa-why-is-the-sec-turning-a-blind-eye https://www.lioness.co/post/microsoft-is-using-illegal-bribe...

encryptluks2 5y ago
The same bribes/kickbacks are very big in government contracts. Not sure what the DoJ would do when they would up investigating themselves.
- raincom 5y ago
  With one major difference: in Africa, in general in the third world countries, whom to bribe, how much to bribe, who is the intermediary who handles the bribes, etc--are common knowledge. In the developed word, that is secret--only accessible to the super wealthy.
- yonaguska 5y ago
  The military industrial complex, and the intelligence communities are above the government. Investigations would never take place, unless they were fake and only to placate the public. Lots of our dark foreign policy, is orchestrated through NGO's like the National Endowment for Democracy, where they then go on to do all kinds of illegal things in other countries. All is legal in the name of "national security".
thathndude 5y ago
To the extent the article gets anything wrong, it's the focus on just Microsoft. Microsoft is not some lone, bad actor here.

encryptluks2 5y ago

I think almost with any common sense would recognize this. It happens a lot in the US as well and in academia, but most of all government services. People get kickbacks, Microsoft helps with marketing... so and so switched to Microsoft, here is what they have to say about how it helped the organization. Except, they never talked to the employees who would have told you how they hate it and it actually makes their jobs worse. People realize they are powerless and just leave or accept it as a normal part of business and the practice continues.

civilized 5y ago

Microsoft spokesperson: "how dare you single us out, obviously everyone is doing this"

johnny_canuck 5y ago
The headline reminded me of the SNC-Lavalin affair in Canada https://www.reuters.com/article/uk-snc-lavalin-court-idUKKBN1YM2CN https://www.reuters.com/article/uk-snc-lavalin-court-idUKKBN...
cute_boi 5y ago
They also have habit of saying, "If we don't do this, Chinese company will do this and so what we are doing is clearly a benevolent act on humanity. To erase this blemish Microsoft shall donate 5 computer to Nigeria to help those poor kids to draw something in MS Paint"

Qem 5y ago

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.

mistrial9 5y ago
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
rapsey 5y ago
MS is insanely powerful pretty much in every country in the world. They know damn well how to get into the power structures.
- mschuster91 5y ago
  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.
  - worik 5y ago
    That is untrue. In 1995 the Windows GUI was complete trash The Linux GUI much better. I was the sole Linux guy (Microsoft Windows 95 mostly plus a HP Unix workstation the boss controlled fromOS/2 desktop). The windows machine constantly crashed and ran like a steam roller in two feet of mud. Lots of mess, not much speed. It was not the quality of the operating system that made Microsoft successful. They were successful despite having the worst operating system in that room. Significantly worse.
  - wolverine876 5y ago

Dracophoenix 5y ago

I reckon Microsoft and others haven't learned from Lockheed in the 70s. It'll only be a matter of time before we hear about other charges regarding Apple and Google

spaetzleesser 5y ago
It may be that they have learned from Lockheed and tried to do the bribes in a better way.
azemetre 5y ago
What is the lesson you're alluding too?
- FourHand451 5y ago
  There are a few: https://en.wikipedia.org/wiki/Lockheed_bribery_scandals https://en.wikipedia.org/wiki/Lockheed_bribery_scandals
dukoid 5y ago
Every generation has to re-learn this lesson? https://en.wikipedia.org/wiki/Lockheed_bribery_scandals https://en.wikipedia.org/wiki/Lockheed_bribery_scandals
- topspin 5y ago
  Has it been one full generation since the SEC was handed evidence of fraud (Madoff) and blew it off? That was only 14 years ago.

Shadonototra 5y ago

I knew it, their only way to push their services globally was to resort to that kind of behavior with dirty money

legalcorrection 5y ago

The Foreign Corrupt Practices Act should be repealed and American companies should be allowed to compete on equal footing with their foreign competitors. No other country, even if it technically has an FCPA-like law on the books, actually enforces it to the extent the US does. It means that everyone is free to openly participate in bribery to win foreign markets, markets where bribery is just how business is done, while American companies have their hands tied behind their backs. This has overall been a major hamper on American competitiveness while being a huge boon to middle-men and white collar criminal defense lawyers who specialize in working around the laws and defending against prosecutions.

spaetzleesser 5y ago
I am against that. The result could be that US companies would go all in on bribing and make the countries even more corrupt. It would make the US even more hypocritical when they preach ethics to the world.
- InitialLastName 5y ago
  Perhaps (and I recognize that this is controversial) the US should reconsider its habit of preaching ethics to the world.
deleted 5y ago
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mring33621 5y ago
I don't like it but I think this is a realistic opinion. Maybe overseas bribes become legal, but must be disclosed in a publicly-accessible format.
otterley 5y ago
Do you think our laws should be tuned for maximum profit, or to reflect who we are, ethically and morally, as a society?
- 5y ago

nashashmi 5y ago

There is a lot of supposition from the article based on a single source that these payments were bribes. These kinds of articles are really calling wolf when there are none. And potentially downplay instances when actual wolves are spotted. This is a hit piece from a potential competitor trying to do business in the same market. Going to add further the article has way too much fluff. It’s a play on reader psychology to turn them against Microsoft.

hammock 5y ago
Agreed. Reminds me of the payments of as much as $183K a month from a Ukrainian natgas company to a man with no energy sector experience that just happened to be the son of the US Vice President. There's no evidence it was a bribe, just a hit piece, probably from a competitor like Russia
- nashashmi 5y ago
  Hilarious.
- hirako2000 5y ago
  Did you mean former vice president? his father got a new job last year.
digisign 5y ago
What kind of payments should vendors be making regularly to customers?
- nashashmi 5y ago
  Accounting malpractice is a common problem in non western nations. Negotiators will personally take money in name of their employer.

gjsman-1000 5y ago

I wonder if this explains the shocking incompetence of the Windows division...

jonpo 5y ago

Ohh man my ESG ETF is suddenly evil..

svachalek 5y ago
I was very interested in ESG until I saw that pretty much all ESG funds had Facebook in the top handful of holdings. Because they're easy on the environment compared to an aluminum smelter, and somehow destroying democracy around the world doesn't count as a social or governance issue. I've changed my focus to owning shares via funds that will vote my shares with some sort of conscience. (Vanguard is the rock bottom on that metric, btw.)
- Nextgrid 5y ago
  > Vanguard is the rock bottom on that metric Could you recommend alternative funds that are more ethical?
npteljes 5y ago
What difference did the article make, compared to this below? https://en.wikipedia.org/wiki/Criticism_of_Microsoft https://en.wikipedia.org/wiki/Criticism_of_Microsoft

bnt 5y ago

Let's see how The Verge falls out of Microsoft's grace moving forward. The Verge had (what feels like) direct access to top MS execs for all product launches. I guess those days are over. Don't get me wrong, if this was picked up by the SEC or DOJ - I'd take it more seriously, but it sounds like accusations with no real proof.

tombert 5y ago
Wouldn't that be evidence that they have less reason to lie about this? This is potentially burning a bridge, which could potentially cost them financially long term.
boomboomsubban 5y ago
Will MSN also fall out if Microsoft's grace? https://www.msn.com/en-us/news/us/microsoft-allegedly-connected-to-dollar200-million-in-bribes-each-year/ar-AAVuB67 https://www.msn.com/en-us/news/us/microsoft-allegedly-connec...
- deleted 5y ago
  [deleted]

xbmcuser 5y ago

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.

president 5y ago
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.
- bllguo 5y ago
  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"
- wolverine876 5y ago
  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.

digisign 5y ago

Reminds me of this great piece (and hn discussion) regarding corporate bribery during the Watergate years: https://longreads.com/2018/11/20/the-second-half-of-watergate-was-bigger-worse-and-forgotten-by-the-public/ https://longreads.com/2018/11/20/the-second-half-of-watergat... https://news.ycombinator.com/item?id=18498796 https://news.ycombinator.com/item?id=18498796 This reads as the modern chapter to the story.

spaetzleesser 5y ago

I bet this is normal procedure for most companies that do business in countries where bribes are common. In Germany foreign bribes used to be even deductible.

worik 5y ago
It is arguable that the prohibition of bribes is a cultural thing. So insisting on not bribing in other cultures is some sort of "imperialism". That would make bribing foreign officials a "legitimate" business expense.
- spaetzleesser 5y ago
  Problem is that foreign entities bribing in foreign cultures is an even worse form of imperialism. Big corporations with deep pockets could totally distort the market in these countries by bribing generously instead of competing by merit. It’s bad enough that lobbying (some may call it bribing) money plays such a big role in US economic policy so let’s not make it even worse. Especially large scale bribing corrupts countries and their culture. Capitalism is only useful if there is honest competition in the market.
  - jhanschoo 5y ago
    > Big corporations with deep pockets could totally distort the market in these countries by bribing generously instead of competing by merit. As opposed to the market in these countries already being distorted due to domestic bribes? > Capitalism is only useful if there is honest competition in the market. It's therefore not clear to me how a market under such a corrupt regulatory regime is already well-served without the supply-side bribing one's way in, when the cost for an enlightened business owner to be a legitimate player is already bribery. On the flip side, with bribery, the bribery cost to do business for well capitalized foreign players is higher, so there are dynamics that work against the foreign imperialist in a corrupt regime.
- wolverine876 5y ago
  If bribes are ok, why don't the criminals openly advertise their prices and what they are doing? Bribes do economic harm to people of the country, whether we call it 'culture' or something else.

sgm_ro 5y ago

This has been common knowledge for me for a long time, after this case surfaced in the media here in Romania: https://en.wikipedia.org/wiki/Microsoft_licensing_corruption_scandal https://en.wikipedia.org/wiki/Microsoft_licensing_corruption... 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 https://en.wikipedia.org/wiki/LiMux

1024core 5y ago

The only way to stop this is to give the whistleblower a large cut of the fine: say, 50%. That will drive up the incentive to whistleblow; otherwise, all you get is a pink slip and a spot in the soup kitchen line.

boeingUH60 5y ago
The US SEC started a similar program in 2012, but with a smaller cut (10-30%). It's been quite successful, with $1 billion+ in whistleblower awards so far https://www.sec.gov/news/press-release/2021-177 https://www.sec.gov/news/press-release/2021-177

deleted 5y ago

[deleted]

peter_retief 5y ago

Billions get paid to Microsoft from countries with starving people. This has always upset me and I do not use Microsoft.

Gepsens 5y ago

Foreign companies get fined billions for doing the same when it doesn't please Uncle Sam...

known 5y ago

DoneWithAllThat 5y ago

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.

treis 5y ago
The piece written by the whisteblower includes links to documents: https://www.lioness.co/post/microsoft-is-using-illegal-bribes-in-the-middle-east-and-africa-why-is-the-sec-turning-a-blind-eye https://www.lioness.co/post/microsoft-is-using-illegal-bribe...
- hn_throwaway_99 5y ago
  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.
- deleted 5y ago
  [deleted]
sha256sum 5y ago
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?

bumblebritches5 5y ago

markdown 5y ago

Not just foreign bribes: https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D000000115 https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D...

bstar77 5y ago

And much of this is to convince governments to not go open source. This kind of behavior is part of Microsoft's DNA.

sakex 5y ago

Bribing in Africa is so common it could be considered a business practice

notriddle 5y ago
That's an essential part of it. "We ordered them to not accept bribes! Never mind that we also ordered them to somehow convince these governments to run licensed copies of Windows instead of cracked copies, and since it costs them money while buying them nothing, the only way it could possibly be done is bribery. It's not our fault because we told them not to!"
datavirtue 5y ago
And in many other parts of the world. It is so bad that businesses in n the US did adopt it as a practice. The ballooned to such epic porportions that the US Senate sponsored a bill to make it in illegal. If it had been kept down to a mild roar the law would still be missing from the books. It is still bad because the incentives are still in place. Throw a little bit of money at a few people, get your business locked in. If you get caught you pay a very small portion of the profits and get to keep your business deal in place. The fines are a joke, and the rules are indeed for the little people.
carapace 5y ago
I worked briefly for a startup that wanted a .sy domain. That's Syria. They had to get the State Dept. involved (Hillary Clinton had to sign one of the documents, she was Sec. of State at the time.) The package they sent to Syria was a kind of Matryoshka doll: a package with some grease (cash!) and another package inside, that in turn had the grease for the next level of the bureaucracy and another package for them to pass on, which contained more grease and another package... All in all four or five layers of payments and bureaucracy. They got the domain name but then abandoned it for some reason I don't know (I suspect it was just more trouble than it was worth to have "foo.sy" and deal with Syrian government rather than just "foosy.com".) US$20,000 down the drain. FWIW this was all official enough that it wasn't legally bribery.
hulitu 5y ago
It is not limited to Africa. First world countries like to call it with a different name: lobby.

GoodJokes 5y ago

[dead]

locusofself 5y ago

Jesus do you know how many training videos about anti-corruption and bribery I've had to watch as an MS employee?

timcavel 5y ago

lkxijlewlf 5y ago

I am just so sick of all the cheating. Every time you turn around, some business, politician, or wealthy person is corrupt as f** and everyone who can do anything about it won't.

datavirtue 5y ago
It's almost as if the people should form a more perfect union.
wolverine876 5y ago
What are you doing about it? It's a democracy - like open source software, if you don't like it, change it.
- hulitu 5y ago
  It is not a democracy. It is a corrupted democracy.
  - wolverine876 5y ago
    Every human being, organization, institution, software project, and democracy is corrupted to some degree. It's right their in the foundations of every philosophy and religion - it got us kicked out of Eden. If we do anything in life, it's with and through these human institutions, which are corrupt to some degree. It's up to us to make them less corrupt and to do things for humanity - there's nobody else who does anything; no alien cavalry is coming; it's just us.
- lkxijlewlf 5y ago
  Funny who always gets stuck with the burden.

timcavel 5y ago

mupuff1234 5y ago

If a government organization would want to use a Linux, how hard would it actually be? Is it a viable alternative?

pid-1 5y ago
I don't think govs are different from your average company. Having a Linux based business is hard, for a few reasons: - Destkop Linux sucks - You need experienced sysadmins. There is no Linux equivalent to AD / Azure AD in terms of simplicity, as far as I know. Also true for other stuff like app management. - User resistance, as few people use Linux as their daily OSes
- nivenkos 5y ago
  But on the other hand they have a much bigger incentive than a company to be able to have a system they control and can use throughout different public administrations.
- mupuff1234 5y ago
  I wonder if we will see a push from Google with chrome os.
  - bastawhiz 5y ago
    They have already pushed and many companies ship Chrome OS to their employees. It's extremely common for non-technical folks.
- worik 5y ago
  Desktop Linux does not suck. It has not sucked since about 1993 If you compare Linux 1993 to Mac SO 2022 it still stacks up, almost. Comparing Linux 1993 to MS Dos of the time is unfair. It took MS till about 2000 to be able to compete with Linux on quality MS Windows was successful for other reasons than the operating system.
  - pid-1 5y ago

cryptica 5y ago

> "they’re promoting the bad people. If you’re doing the right thing, they won’t promote you." I can relate to this. Seems to be an industry-wide phenomenon. It probably explains what's going on with the world.

cryptica 5y ago

We have to abolish corporations. Nationalize them. The concept of an entity which spares directors from liability is ridiculous... It's a financial instrument designed for scams and nothing else.

daniel-cussen 5y ago

Couldn't bribe North Korea. I can't believe Juche actually worked.

LorenPechtel 5y ago

Unfortunately, we are left with the problem that it can be very hard to tell the difference between a bribe and a grease payment. The latter are an unfortunate reality that companies can't realistically function without--and not just in the third world.

beaconstudios 5y ago
They're the same thing.
- LorenPechtel 5y ago
  No. A bribe is a payment to get them to do something improper. A grease payment is to get them to do what they should have done anyway. They look the same on the surface but they're very different underneath. The former is illegal, the latter is legal (but good luck trying to show it's not a bribe when it happens in the US.)
  - beaconstudios 5y ago
    If you're paying an official personally to "fast track" an official process, that's a bribe. Grease payments are just a subset of bribery. Just because it's normalised in some countries, doesn't make it a different thing.

jnwatson 5y ago

To be clear, this is not (just) a matter of ethics. If true, these acts are in violation of the US Foreign Corrupt Practices Act. Each violation can be up to 5 years in prison.

chrismcb 5y ago

I like how there is a ton of commentary on how to skip ethics training. If you are thinking of skipping ethics training... That training might be targeted at you.

will_walker 5y ago

Primary complaint document: https://www.lioness.co/post/microsoft-is-using-illegal-bribes-in-the-middle-east-and-africa-why-is-the-sec-turning-a-blind-eye https://www.lioness.co/post/microsoft-is-using-illegal-bribe...

worik 5y ago

I have been reading the comments about bribing foreign companies. Very interesting I think it is pertinent to remind people here, especially subjects of the USA, that in the USA bribing politicians is a formal and accepted practise. Records are kept, they are publicly available. The hypocrisy of those politicians is legendary for all sorts of reasons, this is just a minor point. Bribery is only illegal if done informally in foreign countries or the private sector.

taxyz23 5y ago
This is very misleading particularly for those not familiar US laws. If you want to say publicly disclosed campaign contributions with no quid pro quo is bribery than say so but that's not most people's definition of bribery. Democracy requires campaigns and campaigns require money.
- worik 5y ago
  > If you want to say publicly disclosed campaign contributions with no quid pro quo is bribery than say so but that's not most people's definition of bribery. No. It is the "I will vote for this law if you contribute this much". In my country (New Zealand) that would get you jail time. Because it is bribery

4oo4 5y ago

If Microsoft can get away with this, what are the rest of the FAANGs doing that we don't know about? So nice that we legalized corruption and white collar crime in the United States, how disruptive!

say_it_as_it_is 5y ago

Why do Americans think that the rest of the world operates according to the illusion that America pretends to follow? Payoffs aren't always bribes. They're more like a tax.

xtracto 5y ago
Right... the PACs SuperPACs and other payments from private companies to lawmakers would be highly illegal in my country. Yet in the USA they are promoted and celebrated.

madrox 5y ago

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. 1: https://www.lioness.co/post/microsoft-is-using-illegal-bribes-in-the-middle-east-and-africa-why-is-the-sec-turning-a-blind-eye https://www.lioness.co/post/microsoft-is-using-illegal-bribe...

jamal-kumar 5y ago
An Overview 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-practices-act https://www.justice.gov/criminal-fraud/foreign-corrupt-pract...

sloan 5y ago

Why am I not surprised. Microsoft operates in all the sketchy countries.

throwaways85989 5y ago

Ah, yeah, company ethic lectures,pamphlets and statements. I love those on webpages.. right beside the company locations world map. Love it, when they then have branch offices, that "exclude" one another - as in you can not be active in both countries, without violating a law of one, and obviously bribing yourselves out of that to be active in both. At least they prevent some moral philosopher from starving, who got bribed to write this.

NoblePublius 5y ago

Corruption is why we win https://youtu.be/1yhAOs94n8k https://youtu.be/1yhAOs94n8k

akagusu 5y ago

No company becomes a billionaire company without bribing someone out there.

hedora 5y ago

Despite what the article says, the foreign corrupt practices act is intentionally full of loopholes. Don't take my word for it. Here's the Justice Department's opinion: https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act https://www.justice.gov/criminal-fraud/foreign-corrupt-pract... Tl;dr: If a US employee wires the money, is aware of / ordered the bribe or the bribery takes place on US soil, it is definitely illegal. Hire a lawyer or ask us before putting foreign employees in a position where they might engage in bribery of foreign officials that don't violate these rules. Be sure to perform thorough accounting in any case. Based on the allegations in the article, Microsoft seems to have been following the rules until the whistleblower started screwing up the "is aware of" part.

lizknope 5y ago

I've been working in the tech industry for 25 years. I've probably watched 10 different corporate ethics training videos that cover bribery and inappropriate gifts. At the end we have to answer a quiz to prove we weren't asleep. In all my time I have never had any control over money and no way to bribe someone even if I wanted to. About 5 years ago I check my email in the morning and there are emails from the corporate legal and PR teams about not answering any questions from reporters about a certain employee. They state this person is no longer an employee. I immediately google his name and find that he has been arrested on foreign bribery charges. Everyone in our team was laughing that he must have forgotten to take the mandatory corporate ethics and anti bribery training. What is the point of making us watch all these videos when we have no budget authority anyway while the C-level execs bribe people?

ComradePhil 5y ago

Everytime something like this comes up, westerners pretend that they are shocked, which I find hard to believe. Western aid agencies and humanitarian agencies work closely with corporations and third world governments to get their way. Oftentimes, these bribes are not as direct as alleged here. Instead, the corporations donate to humanitarian agencies, which then allocate it as budget in the target country in exchange for business deals. Most of the aid disappears in "admin expenses" i.e. it goes to fill the pockets of people making these deals with these corporations.

taxyz23 5y ago

Highly skeptical of this take. Lots of allegations claiming various payments are really bribes When all is said and done there will be few true bribes found and those will likely be by rogue relatively lower level or little supervised employees Suspect this is a disgruntled employee with a good lawyer who dreamed up a way to squeeze Microsoft. Who doesn't hate or want to hate Microsoft ? Big companies are well aware of the massive liability and associated legal costs under US federal law for bribery (domestic and foreign) and no way are they going to conspire systemically to destroy themselves. There have already been well documented and publicized federal bribery cases against companies such as Walmart. No legal department is going to tolerate bribery

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known 5y ago