HP pays $55 million to call off kickback probe

Price of justice revealed

HP is to pay $55m to end an investigation into allegations that the company paid kickbacks to win lucrative US government contracts.

A spokeswoman for the company made clear that the payment does not constitute an admission of guilt on HP's part, but said: "We believe it is in the best interest of our stakeholders to resolve the matter and move beyond the issue."

HP was one of several IT companies to be named by the US government in lawsuits launched three years ago that relate to the payment of so-called 'influencer fees' by companies to consultants who helped guide federal agencies' IT procurement.

The fees, often amounting to hundred of thousands of dollars, were said by the companies to be legitimate 'rebates and discounts'.

US Department of Justice officials disagreed, saying that the payments created a conflict of interest and may have led to agencies paying over the odds for technology they didn't need.

"As this case demonstrates, we will take action against those who seek to taint the government procurement process with illegal kickbacks," Assistant US Attorney General Tony West said in a statement on Monday.

Other defendants have settled similar complaints out of court. Data storage company EMC agreed in May to pay $87 million. IBM and PriceWaterhouse Coopers paid $5.2 million in 2007. Neither company admitted any wrongdoing.

Lawsuits against Sun Microsystems and accounting firm Accenture are still ongoing.