HP fined US$55 for fraud in US, but T&T says its deal with HP is clean

Hewlett-Packard has agreed to pay a fine of US$55 million to settle a claim that it paid kickbacks to systems integrator companies in return for recommendations that U.S. agencies buy HP products.

The Justice Department said on Tuesday the payment also resolves claims that a 2002 contract between HP and the General Services Administration (GSA), the U.S. government's chief procurement body, was defectively priced because HP provided incomplete information to the GSA.

That contract involved sales of computer equipment and software to federal agencies by the California-based company, the world's largest computer maker.

"Contractors must deal fairly with the government when doing business with federal agencies," U.S .assistant attorney general Tony West said. "As this case demonstrates, we will take action against those who seek to taint the government procurement process with illegal kickbacks," West added.

In a statement HP said that on August 2 it negotiated a deal with U.S. prosecutors to settle the case but did not disclose the amount of the settlement.

Earlier on August 30, HP announced it had been awarded a contract worth up to $800 million to supply computing equipment to the U.S. Air Force.

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The computer giant has also been awarded a contract for TT$83 million to supply 24,000 laptop computers to Trinidad and Tobago for distribution to children entering high school for the first time.

Education Minister Dr Tim Gopeesingh assured reported Wednesday that the contract with HP is clean and everything is above board. Gopeesingh said the government has had no dealing with the U.S. parent company since the contract to supply the computers is with HP's Latin American and Caribbean division.

Prime Minister Kamla Persad-Bissessar also assured reporters that all is well.

"I can assure you there has been no kickback to the Government of Trinidad and Tobago, or to anyone in Trinidad and Tobago. That I can give you the assurance on. So whatever is happening there, I'm sure there will be investigations according to law," Persad-Bissessar said in Tobago where she and her cabinet are holding a retreat.

However she explained that since there have been concerns about the laptop issue the government will provide to citizens further information to explain why it chose HP.

"I see people sending out things that we can buy an HP for $300, and we are paying $400 or $500. We are not just buying an HP we are buying a package that will give a guarantee for damage, loss or repair," she said.

She added, "Secondly the firewalls that will go up and thirdly the software that will go into the HP. So it's not just you buying a flat HP with the normal windows, it's far more than that and my Minister of Education will be taking some time to explain why it cost more than if you walked into the United States and bought one."

Persad Bissessar added that the cost includes shipping and handling as well and the preparatory work to make the machines ready for the students who will begin receiving them when schools open next week.

She reiterated that there was no pay off or kickback and added that "if there is, let the law take its course."