IBM manager indicted for bribery

A former IBM executive has been accused of accepting over $500,000 of personal bribes from a hardware reseller in the US.

Robert St. Germain is accused of selling IBM products to Recyclers Consulting Group (RCG), which dismantled them and sold them on without giving IBM a share of the profits.

IBM's contracts stipulate that reselling is fraudulent without prior permission.

St. Germain, who managed IBM's reutilisation department, allegedly sold equipment worth $20m, before being indicted in a New York federal court. The reseller industry is shocked - but more by the fact he was caught than by his behaviour.

One source, who has links with both IBM and its resellers, said: "When someone in an extremely large company is caught, it's proof that this sort of thing does go on. The reaction is midway between amusement and horror. There are a number of precedents in large companies, but none as public as this."

Many large companies, including Epsom and Fujitsu, have policies against bribery, so that anything over a certain value can't even be accepted as a gift.

"The fact that this probably happened over the course of time says something about the way IBM monitors its staff," the source continued.

IBM confirmed the indictment, but would not comment until its lawyers have finished reviewing the case. The legal team is expected to conclude that IBM has no responsibility for the personal decisions of its senior managers.