Accenture pays $64m fine to make kickback case go away

Computer consulting giant Accenture has settled a lawsuit brought by US lawmakers that alleged it accepted kickbacks from big ICT suppliers to recommend their products to its government clients.

It needs to be stressed in the interests of both fairness and accuracy that the firm was not accused by US legal authorities of bribery (see the original 2007 release here), rather of having "solicited and provided improper payments and other things of value on technology contracts with [US] government agencies".

The firm is paying Uncle Sam $63.7m to end the suit but as part of that settlement is not admitting to any wrongdoing.

The case as presented by the US Department of Justice (DoJ) was that the consulting giant kept taking lots of money in the 1996-2007 timeframe from firms like IBM, EMC and (the then) Sun (now part of Oracle).

The problem was that as the US Federal authority had contracted Accenture as an independent to tell its agencies what to buy ICT-wise, there was a clear potential conflict of interest for preferential treatment of these partner companies.

This was the substance at least of a whistleblowing case originally brought in its turn in local courts in the US in 2004 before being taken up at national level.

Accenture has always maintained that this was less corruption than standard operating procedure in the technology industry. Thus in its settlement statement the firm said, "The government was aware of alliance relationships in the IT industry and how they would benefit customers, vendors and the IT industry... The details of how alliances worked in the IT industry were widely reported in the industry press."

Over the years since 2007 a lot of suppliers have quietly 'paid the fine and gone,' such as HP (August 2010, $55m), CSC ($1.4m, May 2008), Big Blue ($3m, 2007) and PricewaterhouseCoopers ($2.3m, same year).

"Kickbacks and bid rigging undermine the integrity of the Federal procurement process," Tony West, assistant attorney general for the DoJ's Civil Division, said in a statement. "At a time when we're looking for ways to reduce our public spending, it is especially important to ensure that government contractors play by the rules and don't waste precious taxpayer dollars."

You may be interested to know that under US law the original whistleblowers get a fraction of each fine.