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About POGO's Federal Contractor Misconduct Database (FCMD)
The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »
Ranking: 38
IBM Corporation
IBM is the world's largest information technology company with more then 90 years of leadership in helping businesses innovate. Drawing on resources from across IBM and key business partners, IBM offers a wide range of services, financing, solutions and technologies that enable customers to take full advantage of the on demand era
Federal Contract $: $1799.5m
Total Number of Instances: 11
Total Misconduct dollar amount: $ 823.6m
- Annual Report
- Ethics Page
- Hoovers Profile
- Lobbying Information
- Press Page
- SEC 10K
- Contracting Information
- Website
Instances of Misconduct
1. Compuware v. IBM (Copyright Infringement and Antitrust)
In 2002, Compuware sued IBM for copyright infringement, unfair competitive acts, and other anti-trust abuses. Compuware alleged that IBM stole a computer code from them for use in IBM’s File Manager and Fault Analyzer tools. IBM agreed to license $140 million of Compuware software over the next four years and offer to purchase $260 million of select Compuware services over the next four years.... more»
2. Cooper v. IBM (Pension Issues)
In July of 2003, IBM and a collection of plaintiffs collectively known as “Cooper” reached a partial settlement concerning pension issues. The remainder of the decision was made in Illinois District court, which decided that several aspects of IBM’s pension plan violated the Employees Retirement Income Security Act by discriminating against older employees. The settlement is originally set at $320 million, however, a pending appeal could increase the settlement by an additional $1.4 billion.... more»
3. Unlawful Exports (Russia)
“On July 31, a U.S. district judge in Washington D.C. imposed a criminal fine of $8.5 million on IBM East Europe/Asia Ltd. for exporting computers to Arzamas-16, a Russian nuclear weapons laboratory, in violation of the International Emergency Economic Powers Act and the Export Administration Regulations.”... more»
4. U.S. v. Moffat (Insider Trading)
In March 2010, former IBM senior vice president Robert Moffat pleaded guilty to one count of conspiracy to commit securities fraud and one count of securities fraud, admitting that he provided confidential information about two companies in an insider trading scheme that generated more than $25 million in illicit gains. Moffet also faces civil charges filed by the U.S. Securities and Exchange Commission (see related IBM instance, “SEC v. Galleon Management LP, et al. (Insider Trading)”.)... more»
5. Rosenburg v. IBM (Overtime Pay)
IBM settled a class action lawsuit filed in federal district court in California in January 2006 by agreeing to pay $65 million to 32,000 workers who claimed they were wrongly denied overtime pay.... more»
6. Securities Violations (Dollar General)
IBM agreed to pay $7 million as part of a settlement of a Securities and Exchange Commission investigation of Dollar General Corp., a client of IBM’s retail store services unit. IBM neither admitted nor denied wrongdoing in the settlement, but it consented to the entry of an SEC order directing it not to violate certain provisions of the federal securities laws. In 2004, IBM disclosed that regulators might take civil action against it for violating securities laws related to Dollar General accounting transactions dating back to 2000. Around the same time in a related matter, the SEC settled a civil action against IBM employee Kevin B. Collins for aiding and abetting Dollar General's commission of accounting fraud. See IBM Corporation misconduct instance "SEC v. Kevin B. Collins (Securities Violations)."... more»
7. Providing Materially Misleading Financial Statements
The Securities and Exchange Commission concluded an investigation of IBM, finding the company misled analysts about employee stock-option expenses in 2005. The SEC said IBM's conduct violated the reporting provisions of the Securities and Exchange Act of 1934 and ordered IBM to cease and desist from committing or causing violations of these provisions. However, the SEC stopped short of finding fraud had been committed and imposed no fine. See related IBM instance, “IBM Securities Litigation.”... more»
8. SEC v. Kevin B. Collins (Securities Violations)
The Securities and Exchange Commission settled a civil action against IBM employee Kevin B. Collins for aiding and abetting IBM client Dollar General Corp.'s commission of accounting fraud. The SEC alleged Collins assisted Dollar General in a sham transaction that was designed to increase IBM's revenue for fiscal year 2000 and increase Collins' bonus compensation. Collins agreed to pay $95,000, including $48,769 in disgorgement, $21,231 in prejudgment interest and a $25,000 civil penalty. Around the same time in a related matter, the SEC settled an administrative proceeding against IBM involving Dollar General. See IBM Corporation misconduct instance "Securities Violations (Dollar General)."... more»
9. 'Alliance Benefits' Alleged Kickback Scheme
IBM Corp. and PriceWaterhouseCoopers (PWC) separately agreed to pay the U.S. government a total of $5.3 million to settle allegations that the companies solicited and provided improper payments on technology contracts with government agencies. IBM agreed to pay $2.97 million and PWC will pay $2.3 million to settle the complaints, which alleged IBM and PWC requested or made kickback payments, known as "alliance benefits," to other companies with whom they had global alliance relationships and then did not disclose these conflicts of interest. Other prominent tech companies – including Accenture, Hewlett-Packard, and Sun Microsystems – were also alleged to have participated in this arrangement since the late 1990s. See related Accenture pending instance, "False Claims On Hardware, Software & Technology Services Sales" and IBM instance, "'Alliance Benefits' Alleged Kickback Scheme."... more»
10. EPA Suspension
A notice posted on the General Services Administration’s Excluded Parties List System (EPLS) Web site announced that IBM was indefinitely suspended from doing business with the federal government. The information provided on the EPLS Web site did not give a reason for the suspension, only that it was initiated by the Environmental Protection Agency “pursuant to Executive Order 12549 and the agency implementing regulations based on an indictment or other adequate evidence (a) to suspect the commission of an offense that is a cause for debarment or (b) that other causes for debarment under the agency regulations may exist.” However, the next day, the U.S. Attorney’s Office for the Eastern District of Virginia issued subpoenas to various IBM employees to testify before a grand jury concerning allegations that IBM violated the procurement integrity provisions of the Office of Federal Procurement Policy Act while bidding on an EPA contract. About a week after it had been imposed, the government lifted the suspension after IBM agreed to cooperate with the EPA’s and the U.S. Attorney’s ongoing investigations.... more»
11. IBM Securities Litigation
IBM agreed to pay $20 million to settle a shareholders lawsuit that claimed the company misled the public about employee stock-option expenses in 2005. The lawsuit, brought on behalf of shareholders who bought IBM common stock in April 2005, alleged IBM manipulated expectations for its first-quarter earnings announcement in 2005. A year earlier, the Securities and Exchange Commission determined that IBM's conduct had violated federal law, but it did not amount to fraud. See related IBM instance, “Providing Materially Misleading Financial Statements.”... more»
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