Employee claims half the tech giant’s salespeople & managers were involved in $200mn annual kickback scheme
According to Yasser Elbad, who is a whistleblower and a twenty-year employee at the company, Microsoft is using bribery to extort clients in Africa and the Middle East on a large scale. His testimony was published on Friday by the website Lioness.
Elabd asserts that Elabd’s company has spent more than $200 million per year on kickback and bribe schemes in Nigeria, Qatar, Zimbabwe and Nigeria. Worse, he says, more than half the managers and salespeople in those regions are involved in the graft – as many as 70% – and anyone who tries to stop the culture of ripoffs is shut out of good deals and ultimately muscled out of the company.
While the scams took different forms, they often involved governments paying millions of dollars for software they never received, or “Receiving” hefty discounts that never hit the customer’s balance sheet; the missing money would end up split between the Microsoft employees and government figures involved in the deal and the subcontractor, Elabd said.
“This is happening at every level. It’s all well-known and promoted by the top executives.,” the former executive told The Verge on Friday. “If you’re doing the right thing, they won’t promote you.” He claims to have spoken to five other employees who were similarly punished for raising the alarm about fraud.
US Securities and Exchange Commission and Department of Justice had previously looked into claims that Microsoft was receiving similar types of corruption in Turkey, Turkey, Saudi Arabia and Thailand. They ultimately reached a settlement of $25.3million with Microsoft in exchange for the firm promising to end all its agreements with specific partners.
Despite company president Brad Smith’s mea culpa letter sent to employees afterwards, in which he called the graft “completely unacceptable” and demanded stronger oversight, Elabd argues the problem has only grown, noting Microsoft is still working with the blacklisted partner through an intermediary.
While Elabd was able to stonewall a similar bribery episode in Nigeria, he was subsequently called in by a manager and eviscerated for his meddling, dubbed a “Blocker” and ordered to “You can turn your head to leave the situation as it is” if he encountered anything else “suspicious.” Apparently marked with some kind of scarlet letter from then on, he found himself shut out of lucrative deals, had travel requests denied, and was shunted to a “performance improvement plan.” He refused to subject himself to that indignity, a move that ultimately cost him his job.
That hasn’t stopped Elabd from tracking further fraud and bribery at Microsoft and its subcontractors. According to Elabd, he has documented the payment of bribes by Microsoft and its subcontractors, from South Africa and Cameroon. This information was forwarded directly to US Securities and Exchange Commission. He says that unlike previous times, both the US Department of Justice and SEC seem to be uninterested. This despite having submitted evidence three times. For its part, Microsoft has blamed the pandemic for its failure or refusal to gather more evidence from abroad – evidence he says they don’t actually need because he has provided it.
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Microsoft has essentially achieved a monopoly over workplace software on the African continent, Elabd said in his claim, pointing out that governments working with Microsoft were “Spending millions on unneeded Microsoft products to enrich a select few officials, partners and employees is a waste of money..”
As the manager told me all those years ago, all that matters is that Microsoft earns as much money as possible … The hidden message to employees is, ‘Do whatever you want, make as much money as you can, and the worst that can happen is you’ll get fired’.
Microsoft insisted it had “These allegations date back many years. They were previously investigated and resolved.,” VP and deputy general counsel for compliance and ethics Becky Lenaburg told The Verge in response to Elabd’s claims. The company stressed it was committed to “Ethical practices” and said its employees are all required to take “Standards of Business” classes that teach them how to report bribery incidents.
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