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In a stunning exposé, Microsoft has been accused of engaging in corruption and bribery in the order of hundreds of millions of dollars. This accusation comes from former employee Yasser Elabd who published a detailed recount on Lioness, describing his experiences working at Microsoft between 1998-2018.
Elabd sold licensing, solutions, and contracts to Microsoft customers in the middle east and African regions during this time period. To close out deals, Microsoft also works with partners who are more skilled in engaging with the public sector in this region.
Elabd notes that on one instance in 2016, he spotted a suspicious payout request of $40,000 to a customer to close a deal in Africa. However, this customer did not exist in the company"s internal list of potential clients and the partner managing the deal did not even work for Microsoft anymore. Naturally, Elabd flagged this to the Microsoft services architect who had submitted the request, who dodged the question with some corporate mumbo-jumbo. Elabd then escalated this to the his manager, HR, and the Microsoft legal team. While the transaction was eventually stopped, the matter was not investigated further.
Following the failure of this transaction, the manager of the architect confronted Elabd for bypassing him in the chain of command. This unnamed manager later became Elabd"s manager too and according to Elabd, this is how the first formal meeting between them unfolded:
He immediately scheduled a one-on-one meeting, in which he told me our job is to bring as much revenue as we can to Microsoft. He added, “I don’t want you to be a blocker. If any of the subsidiaries in the Middle East or Africa are doing something, you have to turn your head and leave it as is. If anything happens, they will pay the price, not you.” When I said I would not block anything unless it violated company policy, his tone took a sharp turn. He shouted that I was not capable of doing this business and couldn’t close deals. But my 18-year track record spoke for me.
Elabd then put in a meeting with his manager"s manager (a vice president) but she did not take any action so he escalated his concerns to HR and Microsoft CEO Satya Nadella. The vice president then immediately got back to Elabd and told him that he has essentially "booked a one-way ticket out of Microsoft" with his latest actions.
After these exchange, Elabd was left out of important deals and his trips and travel requests to Africa and the middle east were blocked too. A general manager even told Elabd that he had become one of the most hated people in Africa.
Microsoft put Elabd on a "performance improvement plan", which Elabd thought was ridiculous since he was among the highest performers on his team. As such, he rejected the plan and was consequently fired from Microsoft in 2018.
That"s not where the story ends though. A sympathetic Saudi Arabia-based colleague kept sending emails and documents to Elabd showing evidence of Microsoft engaging in bribery. Elabd says that:
Examining an audit of several partners conducted by PricewaterhouseCoopers, I discovered that when agreeing to terms of sale for a product or contract, a Microsoft executive or salesperson would propose a side agreement with the partner and the decision maker at the entity making the purchase. This decision maker on the customer side would send an email to Microsoft requesting a discount, which would be granted, but the end customer would pay the full fee anyway. The amount of the discount would then be distributed among the parties in cahoots: the Microsoft employee(s) involved in the scheme, the partner, and the decision maker at the purchasing entity—often a government official.
Elabd has noted several such incidents of bribery happening right under Microsoft"s nose (and perhaps, with its approval) in the middle east and Africa. Their value, as known to Elabd, is around $200 million per year.
Interestingly, Elabd did submit his findings as evidence to the U.S. Securities and Exchange Commission (SEC) and Department of Justice (DoJ). Although his evidence has been acknowledged, both have refused to investigate Microsoft further, claiming that the pandemic situation is preventing them from gathering evidence from abroad. As such, Elabd has published his exposé publicly.
In a statement to The Verge, Becky Lenaburg, a Microsoft VP and deputy general counsel for compliance and ethics, had the following to say about the accusations:
We are committed to doing business in a responsible way and always encourage anyone to report anything they see that may violate the law, our policies, or our ethical standards. We believe we’ve previously investigated these allegations, which are many years old, and addressed them. We cooperated with government agencies to resolve any concerns.
Given the company"s statement, it remains to be seen if SEC, DoJ, and Microsoft will investigate these claims again now that they are gaining public traction due to media reporting.