Accenture settles kickback lawsuit

Computer consulting firm Accenture LLP, a U.S.-based unit of Dublin-based Accenture PLC (ACN), has settled a lawsuit that alleges it accepted kickbacks from IT companies to recommend their products to its government clients.

Accenture will pay $63.7 million to settle the suit but denies any wrongdoing, PC Magazine reports.

The lawsuit accused Accenture of accepting millions of dollars in improper payments and rebates between 1996 and 2007 from International Business Machines Corp. (IBM), data storage equipment maker EMC Corp. (EMC) and Sun Microsystems Inc., among other companies, the Wall Street Journal reports. The U.S. government had hired Accenture to advise federal agencies on what hardware, software and other tech products to buy, and two whistleblowers, Norman Rille and Neal Roberts, said the company gave preferential treatment to IT companies that slipped them a little something extra.

"The U.S. federal government was aware of alliance relationships in the IT industry and how they would benefit customers, vendors and the IT industry," Accenture said in a statement. "The details of how alliances worked in the IT industry were widely reported in the industry press.”

The lawsuit was filed in U.S. District Court for the Eastern District of Arkansas in 2004, and the U.S. Department of Justice joined the suit in 2007. The suit named dozens of IT companies allegedly involved in giving or accepting kickbacks, and many of them have already settled with the government, according to PC Magazine.

PC Magazine reports:

Hewlett-Packard agreed to pay $55 million to settle the lawsuit in August 2010. EMC agreed, in May 2010, to pay the U.S. government $87.5 million to settle similar charges. Computer Sciences agreed to pay $1.4 million to settle the case in May 2008. In August 2007, IBM agreed to pay just under $3 million and PricewaterhouseCoopers agreed to pay $2.3 million to settle similar complaints.

In September 2010, Cisco Systems and distributor Westcon Group North America agreed to pay $48 million to settle charges that they misrepresented prices in contracts with the U.S. General Service Administration and other agencies. The DOJ dismissed the Arkansas case against Cisco as part of the settlement.

Under U.S. law, whistleblowers Rille and Roberts will each be given a portion of the fine.

"Kickbacks and bid rigging undermine the integrity of the federal procurement process," Tony West, assistant attorney general for the DOJ's Civil Division, said in a statement. "At a time when we're looking for ways to reduce our public spending, it is especially important to ensure that government contractors play by the rules and don't waste precious taxpayer dollars."

This article has been updated to reflect the fact that Accenture was among the IT companies accused of having "solicited and provided improper payments and other things of value on technology contracts with government agencies," according to the DOJ's official press release. Accenture was not accused of bribery.