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CSC Settles Government Kickbacks Case

By Grant Gross

May 13, 2008 — IDG News Service —

Computer Sciences (CSC) has agreed to pay US $1.37 million to settle allegations that it received kickbacks on technology contracts with U.S. government agencies, part of an alleged scheme involving millions of dollars and dozens of IT vendors and systems integrators.

The settlement, announced by the U.S. Department of Justice Tuesday, stems from a 2004 lawsuit filed in Arkansas by whistleblowers who worked at Accenture and PricewaterhouseCoopers. In August, IBM agreed to pay just under $3 million and PricewaterhouseCoopers agreed to pay $2.3 million to settle similar complaints.

The DOJ joined the lawsuits in April 2007. The DOJ investigation into the alleged kickbacks continues, the agency said.

CSC spokespeople were not immediately available for comment.

Whistleblowers Norman Rille and Neal Roberts filed lawsuits against Hewlett-Packard, Sun Microsystems and Accenture in U.S. District Court for the Eastern District of Arkansas in September 2004. The men alleged that the three companies, along with more than three dozen other IT vendors and system integrators, engaged in a long-term kickbacks scheme in which the companies created alliance relationships with dozens of other vendors, giving each other discounts or rebates on products or work for government contracts.

The companies did not pass the rebates on to their government clients, according to the complaints.

Several of the defendants have responded to the complaints by saying their contracting actions were legal.

CSC "knowingly" solicited or received payments of money and other things of value from other companies in its global alliance, the DOJ said. The benefits "amount to kickbacks and undisclosed conflict-of-interest relationships," the DOJ said.

 

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