CSC settles government kickbacks case

by Grant Gross

May 13, 2008 —

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.

IDG News Service