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canopic jug [soylentnews.org] writes:

"Former" Microsoft employee, Yasser Elabd, has called out his former employer accusing it of widespread bribery and corruption in its activities against the Middle East and Africa [lioness.co]. He claims he was dismissed for calling them out on it and alleges further that reports to the DOJ and SEC have fallen on deaf ears. After starting to scratch the surface, it appears to be a question of at least hundreds of millions of dollars.

Examining an audit of several partners conducted by PricewaterhouseCoopers, I discovered that when agreeing to terms of sale for a product or contract, a Microsoft executive or salesperson would propose a side agreement with the partner and the decision maker at the entity making the purchase. This decision maker on the customer side would send an email to Microsoft requesting a discount, which would be granted, but the end customer would pay the full fee anyway. The amount of the discount would then be distributed among the parties in cahoots: the Microsoft employee(s) involved in the scheme, the partner, and the decision maker at the purchasing entity—often a government official.

For instance: In three of the seven sampled transactions, discounts worth more than $5.5 million were not passed through to the end customers—in this case, two government-controlled entities. Another audit report showed a deal with the Saudi Ministry of the Interior in which a $13.6 million discount did not pass through. Further audits of deals in Kuwait and Saudi Arabia found a total of $20 million unaccounted for—and this involved only two partners out of hundreds across the region. Were an audit conducted for all of the partners using these practices, I believe the sums of money found to be stolen would be enormous. Where did these millions of dollars go?

[...] Another common practice revolved around creating fake purchase orders, which sales managers presumably used to increase their compensation. In 2017, it was suspected that one sales manager forged the signature of the Saudi National Guard’s deputy minister on a fake Microsoft purchase order. I have evidence that people on Microsoft’s legal, HR, and finance teams—as well as officials from the region’s public sector—knew about this forgery. When the matter was investigated, the sales manager threatened to speak out about the widespread corruption he had seen at the company. I heard that Microsoft paid him to leave quickly and quietly, took no legal action against him, and did not report the forgery.

I am not the only person at Microsoft who has alleged corrupt practices. I know of five others from various departments who were terminated or pushed to resign for raising flags about inconsistencies in finances. For example, a whistleblower filed an anonymous complaint [techcentral.co.za] with the Securities and Exchange Commission (SEC) alleging the South African Department of Defense overpaid Microsoft partner EOH Mthombo for software licenses. According to the complaint, the deal—in which middleman EOH received $8.4 million, far more than Microsoft made—was flagged to a Microsoft compliance officer, but no action was taken by the company. The whistleblower contends that this was because EOH was helping Microsoft with a $50 million contract for the South African Police Service.

Given the lack of quality and functionality across their line of products and services, bribery appears to be a common tactic [wsj.com] to close the sale or break the competition [seekingalpha.com].

Original Submission