Whistleblower exposes Microsoft’s massive foreign bribery network

Employee claims half the tech giant’s salespeople & managers were involved in $200mn annual kickback scheme.

Tech behemoth Microsoft is bribing clients in the Middle East and Africa on a massive scale, according to whistleblower Yasser Elabd, a 20-year employee of the firm who published his testimony on Friday on the website Lioness.

Elabd claims the company spends more than $200 million annually on bribes and kickback schemes in Saudi Arabia, Qatar, Zimbabwe, Nigeria, and Ghana, among other countries. 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.

“It’s going on at all levels. All the executives are aware of it, and they’re promoting the bad people,” 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.

The US Securities and Exchange Commission and Department of Justice previously investigated claims involving Microsoft receiving similar types of bribes in Hungary, Saudi Arabia, Turkey, and Thailand, ultimately hammering out a $25.3 million settlement with the software firm in return for the company promising to terminate its contracts with a specific partner, among other stipulations.

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 “turn your head and leave it as 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. He claims to have documented bribes to Microsoft and its subcontractors from Qatar, Cameroon, and South Africa, and has forwarded that information directly to the US Securities and Exchange Commission (SEC). Unlike before, he says, the SEC and the US Department of Justice (DOJ) appear uninterested in pursuing the matter, even though he has submitted the 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.

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 “throwing away millions of public dollars on unused Microsoft products so a few select officials, partners, and employees can enrich themselves.”

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 “previously investigated these allegations, which are many years old, and addressed them,” 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.