Business Crimes Hotline

Microsoft Hungary also made a number of payments to third party subcontractors in connection with service engagements for government customers including NAV, ORFK and the Hungarian Office for Education (OFI), where there was little or no evidence of services being provided. In relation to OFI, Microsoft Hungary was paid approx. $3.5 million for consulting services that it then subcontracted to a third party entity, who in turn engaged an existing OFI employee as the consultant. No due diligence was conducted on the third party or government official, whose identity was falsified in timekeeping records.

In Saudi Arabia, from 2012 to 2014, employees at Microsoft's wholly-owned subsidiary Microsoft Arabia made over $440,000 in improper payments into a slush fund maintained by two of Microsoft's vendors relating to travel expenses for government employees and gifts including furniture, laptops, tablets and other equipment for government agencies. The vendors made payments at the direction of Microsoft Arabia's employees and were paid a commission for acting as the conduit between the company and government officials.

In Thailand, from 2012 to 2015, Microsoft's wholly-owned local subsidiary Microsoft Thailand Ltd also provided improper travel expenses and gifts via third party vendors and resellers to both government officials and employees of non-government banking customers, at the same time that the company was engaged in securing business with those government agencies and end customers. A slush fund for these payments was established and concealed as relating to legitimate training expenses for end customers on Microsoft software.

Finally, in Turkey in 2014, executives at Microsoft's wholly-owned local subsidiary Microsoft Bilgisayar Yazilim Hizmetleri Limited Sirketi (Microsoft Turkey) approved a steep discount in a tender for Turkey's Ministry of Culture, with work directed by an unauthorized third party "system integrator". In fact, there was no evidence that the third party had provided any services or that any further discount had been passed on to the government end customer.

Microsoft and Microsoft Hungary received remediation and cooperation credit as part of the settlement. Microsoft has since strengthened its internal compliance program, taken disciplinary action against employees and terminated a number of Hungarian local licensing partners. The company has also implemented new discount transparency and approval requirements and has developed a data analytics system to assist in identifying higher-risk transactions. Microsoft's cooperation efforts included making regular factual presentations to authorities as it conducted its own internal investigation and voluntarily producing and translating relevant documents.

— Juliet Gunev, Mayer Brown