IBM has agreed to pay out $10 million to settle claims that it bribed its way into around $54 million of government contracts in China and South Korea over a period of eleven years, ending a suit brought by the Securities and Exchange Commission.
The suit, filed late last week in the Washington federal court, accused the company of providing foreign travel and entertainment to officials from China and South Korea between 1998 and 2009 in violation of the Foreign Corrupt Practices Act.
By spending thousands of dollars on junkets and gifts - including laptops and high-end digital cameras - for government officials, IBM allegedly landed $54 million in contracts with various agencies.
The lawsuit didn't just accuse IBM of entertainment and gifts, however, but of outright bribery - claiming that company employees delivered cash in shopping bags to Korean officials at secret drop-off points.
"IBM insists on the highest ethical standards in the conduct of its business and requires all employees to follow its policies and procedures for conducting business,” IBM's Doug Shelton told Bloomberg in a statement - and while the company isn't admitting any wrongdoing, it is paying a not-inconsiderable sum to make the problem go away.
The company has agreed to pay $5.3 million in disgorgement, $2.7 million in interest, and a $2 million fine to sweep the whole thing under the carpet - although it still faces the spectre of a possible criminal investigation into the actions of its employees.