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Dell is accused of secretly receiving illegal rebate kickback payments from Intel in return for an exclusive deal

Dell has received a class action lawsuit from investors accusing the company of improper accounting in its longtime partnership with chipmaker Intel Corp., reports the Wall Street Journal. Specifically, the lawsuit alleges that Dell's profits were inflated by hundreds of millions of dollars in “secret and likely illegal” kickbacks by Intel to ensure the exclusive use of its chips inside Dell computers. The lawsuit also accuses Dell of misleading investors about “serious accounting, quality and customer-service problems.”

The 251-page complaint filed on Wednesday coincided with the surprise resignation of Kevin Rollins -- who at the time held the title of CEO at Dell. Rollins, along with now CEO Michael Dell, were both named as participants in the suit. The complaint states that 15 senior people at Dell were privy to the information about the alleged secret agreement with Intel.

According to the lawsuit, Dell was receiving as much as $1 billion a year, or approximately $250 million a quarter, from Intel for guaranteed exclusivity. The money is said to have been spread unevenly throughout the four quarters to reduce Dell’s reported costs of goods sold. The complaint alleges that payments were made by Intel near the end of Dell’s fiscal quarters, having a “direct, material impact” on reported operating profits or profit margins.

“The numbers of more than a $1 billion (annually) of what I would call marketing incentives (paid by Intel to Dell) is probably right on track,” said ThinkEquity Partners analyst Eric Ross to Reuters. “They don't disclose that at all, either of them, so it's hard to really dig it out.”

“The low cost advantage and high margins that Dell was enjoying ... may not be the brilliance of the direct (marketing) model,” said Ross. “It may have been the brilliance of having a single supplier that pays you.”

Dell's exclusive relationship with Intel ended last year when it announced that it would be using AMD Opteron chips in its servers. Since then, AMD chips have made their way into Dell’s lineup of desktops and notebooks.

Although Dell’s foray into AMD chips appears to be a recent one, the complaint believes that the computer maker had been secretly designing systems around AMD processors. Those designs would eventually be scrapped as Dell and Intel negotiated over private terms. For obvious reasons, Intel and Dell did their best to keep their agreements secret over fears that government bodies would take antitrust actions against the chip giant, claims the complaint.

A Dell spokesman said the company does not comment on pending litigation and that the company has not seen the lawsuit.

Intel refused to comment on specific points raised by the lawsuit, but Chuck Mulloy, an Intel spokesman, did offer a brief blanket statement: “We've conducted a preliminary review of this claim. At first glance it appears that some of the allegations ... appear to have been completely made up,” Mulloy said. “We deny the plaintiffs' allegations and plan to move quickly to defend ourselves,” he said.

Intel also said that some of the complaints brought up in the lawsuit appear to rehash some of the monopoly allegations brought upon it by AMD in 2005.

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Wow
By lazyinjin on 2/2/2007 3:42:41 PM , Rating: 5
This sounds like a new rock for AMD to throw against the Intel Goliath in its lawsuit.

quote:
The money is said to have been spread unevenly throughout the four quarters to reduce Dell’s reported costs of goods sold.


How do you hide a billion dollars of income and get away with it!?!?! This along with the CEO Rollins stepping down smells of great conspiracy that seems to stem from the absolute top of each company.




RE: Wow
By TomZ on 2/2/07, Rating: 0
RE: Wow
By Pythias on 2/2/07, Rating: -1
RE: Wow
By encryptkeeper on 2/2/2007 4:28:02 PM , Rating: 3
rebates have to be reported for them to be legal. it sounds like these weren't reported in the account balances, therefore, they would be illegal. Imagine you owned a publicly traded company (like Dell or Intel) and as part of the information you MUST give your investors, you HAVE to report operating costs. If those are being padded by rebates from your supplier, you have to adjust your accounting sheets to show those adjusted costs for your bottom line to show your investors, the IRS etc. If not, it's illegal.


RE: Wow
By Pythias on 2/2/07, Rating: 0
RE: Wow
By encryptkeeper on 2/2/2007 4:37:23 PM , Rating: 3
In layman's terms Dell's investors are saying that Dell did not adjust it's operating costs for these rebates (the rebates themselves may have been legal, but if this lawsuit holds, Dell and Intel are both likely in trouble for bribery. Gifts of money to exclusively use one product without telling investors=bribery). The real question is where did this supposed money go? If they find that out, Dell won't have a prayer.


RE: Wow
By Pythias on 2/2/07, Rating: 0
RE: Wow
By alifbaa on 2/2/2007 5:38:42 PM , Rating: 4
It's not a bribe, it's failing to account for things properly. If you call it a rebate, then Intel would be liable for antitrust litigation. If you bury it in your cost structure, Intel's problem is solved while Dell gets to point to their higher profit margins as being a good reason to for investors to buy their stock, buy their corporate bonds, give them loans, etc. It is also very likely that Dell got a better deal by keeping things quiet. Essentially, there are generally accepted accounting rules that the plaintiffs are alleging the company violated. It is not a criminal matter, just a civil one.

Legal or not, this story really isn't much of a surprise. I remember a year ago when Dell using AMD was just a rumor there was a Dailytech article postulating that Dell was getting an extra good deal on its Intel chips in exchange for an exclusivity agreement. When you think about it, it makes sense that there would be a special deal given that, at the time AMD's chips were better performers in just about every respect and cost about 2/3 the price of Intel's offerings. Also, the accounting rules began getting enforced a lot more stringently in the last year or two, which likely made Intel and Dell feel a little skittish about continuing their involvement in the deal.


RE: Wow
By TomZ on 2/2/07, Rating: 0
RE: Wow
By Hawkido on 2/2/2007 5:57:35 PM , Rating: 4
It would be Anti-Trust. The terms of the rebate require that the vendor shut out their competition. "No big deal" you say, but Dell investors wanted AMD chips to be sold, however Intel also retains the right to remove Bulk purchase discounts from anyone who sells more than 20% AMD chips. Which Dell would not be able to compete with other brands. Dell, instead of being a victem of Intel's plan went along with them in order to recieve larger discounts, the fact that they hid the procedes with shady accounting is proof of their guilt.

The old maxim is key here: "If they try to hide the evidence before someone suspects them, then they knew it was wrong before they began."


RE: Wow
By smitty3268 on 2/2/2007 6:02:00 PM , Rating: 3
Liable is the wrong word there. What he means is that AMD would be using this as evidence in their court case - if Intel is declared a monopoly, then that kind of rebate is illegal and they would be held liable. Of course, I'm pretty sure it's perfectly legal if the court rules that Intel is not a monopoly.


RE: Wow
By Targon on 2/3/2007 12:27:47 AM , Rating: 2
The issue also goes to how far back this "rebate" program extends. It has only been in the past 2.5-3 years that AMD has gotten enough market share to question if Intel is a monopoly.

If, as many believe, this rebate program were in place 5 years ago, then it would clearly show that Intel was using illegal tactics to maintain their monopoly status(by shutting out competition).

So, not only would it be a huge issue in terms of accounting rules, but it would feed into the AMD vs. Intel legal battle.

On that topic, picture how things might have been if Dell had sold AMD based systems back in 2000 or 2001. AMD might be at a 35 percent market share rather than the 25ish percent they are at today. Some people may point to the number of AMD based machines Dell is currently selling, but when the Athlon 64 was kicking the Pentium 4's butt, the number of AMD based machines Dell sold would probably have been MUCH higher. AMD even had some problems getting other companies to make AMD based machines, so a Dell deal would have been the tipping point for many people.

It's the snowball effect where things start small, but grow and grow. The sooner a company starts to sell an AMD based machine, the greater the chance that competitors would see that, and want to offer a similar product.

So, how far back does all of this go?


RE: Wow
By Khato on 2/3/07, Rating: 0
RE: Wow
By Targon on 2/4/2007 4:18:06 AM , Rating: 2
Which is why I keep saying that it's not just a function of what has been done, but when it happened. AMD has managed to gain market share, but most of the gains were due to companies like HP which you may know, beat Dell in terms of sales several quarters in 2006, but have been selling AMD based machines both retail and direct for a while now.

As I said, it's the snowball effect I was talking about. First one or two big companies get on board, then another, then another. Before too long, AMD has enough market share to have people questioning WHY a company would be Intel only.

So, how long ago did Dell first WANT to sell AMD based systems but was held back by the Intel "under the table" rebate? If Dell was ready to back in 2000 or 2001, but they held off until 2006, that seriously delayed the snowball getting BIG by several years.


RE: Wow
By OrSin on 2/5/2007 1:03:28 PM , Rating: 3
It seems people are not explain this si easy to understand terms.

First it doesn't matter if Intel is a monopoly. They committed illegal business pratices. It is not illegal to offer a rebate, it illegal to base the size of the rebate on not using someone else product.
Example: I can pay Bestbuy $1,000,000 and buy up all of their MP3 player shelf space. I can't pay them the same money not to let any other M3P players have shelf space.
The diffenernce is you are actively keeping people out of the market.

For the dell law suit it very different. They are say I got stock thinking the company is running a profitable business.
But in reallty they are only making a profit by hiding how they got thier money.

Real world example (I worked for this company)- They was in health care and they made a 44,000,000 profit when all thier competors was lossing money. So everyone thought they was better company and had a better business plan. Thier stocks shot up becuase more people wanted them. In reality they made 200,000,000 in a single stock trade (this is still begin investested), but never told the investors how the money was made. So the company was really losing crazy money but I (as an investor) thought it was good company. Dell refruaded thier investor by not disclosing how they made some of their profits.


RE: Wow
By Furen on 2/2/2007 7:19:56 PM , Rating: 2
I wouldn't say Intel is liable for anything unless Intel itself encouraged Dell's practices (if they're even true). This could be used in court against Intel since it does seem a bit shady but that's still another case for another day.

The big thing here is whether or not Dell's management violated its fiduciary duty to its owners. Everyone out there believed that Dell had significantly-lower costs due to its effective management, many people, I'm sure, invested in Dell because of this. If it's lower cost of goods sold was just due to the fact that Intel gave it huge kickbacks then management had little to do with it besides just receiving the check.


RE: Wow
By dagamer34 on 2/2/2007 10:00:09 PM , Rating: 2
You don't pay $1 billion to another company and have BOTH companies "hide" the fact. Obviously something fishy went on.


RE: Wow
By Targon on 2/3/2007 9:39:54 AM , Rating: 2
If this practice extends back more than two years, then Intel IS in trouble for this since it's illegal for a company considered to be a monopoly to do this sort of thing.


RE: Wow
By masher2 (blog) on 2/3/2007 10:24:26 AM , Rating: 1
> "it's illegal for a company considered to be a monopoly to do this sort of thing."

Incorrect. Exclusionary vertical market arrangements are not illegal of themselves, even for a monopoly, and haven't been since the Supreme Court ruled on Continental vs. Sylvania, 30 years ago.

You have to remember that, under US antitrust law, the maxim is, "protect the competition, not the competitors". If there is a healthy degree of competition in the industry, there is no antitrust issue, whether or not any particular company may have been harmed. It's the effect on the consumer that matters here. In this period, even with Dell exclusively selling Intel chips, AMD gained large amounts of market share, and even outsold Intel in the retail market. New products were introduced at a dizzying pace, and consumers benefitted from a neverending series of price wars.


RE: Wow
By kenji4life on 2/3/07, Rating: 0
RE: Wow
By Viditor on 2/9/2007 5:17:40 AM , Rating: 2
quote:
Exclusionary vertical market arrangements are not illegal of themselves, even for a monopoly, and haven't been since the Supreme Court ruled on Continental vs. Sylvania, 30 years ago

Incorrect. Sylvania v Continental only covers antitrust as it pertains to the Sherman Act. The issue at hand is violation of the Clayton Act...specifically section 14 of the Clayton Act:

"It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies, or other commodities, whether patented or unpatented, for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods , wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce"


RE: Wow
By encryptkeeper on 2/6/2007 10:31:39 AM , Rating: 2
Yes, that was a good post, but
If you bury it in your cost structure, Intel's problem is solved while Dell gets to point to their higher profit margins as being a good reason to for investors to buy their stock, buy their corporate bonds, give them loans, etc.

The basis of the case is the investors say that Dell did NOT put these kickbacks in their cost, therefore showing LOWER profit margins and SCREWING investors out of money.


RE: Wow
By Questar on 2/3/07, Rating: 0
RE: Wow
By crimson117 on 2/2/2007 4:14:10 PM , Rating: 2
Yeah, cause those nice corporations wouldn't ever compromise legality for profit...


RE: Wow
By bobdelt on 2/3/2007 11:00:50 AM , Rating: 2
This is a disclosure issue and has nothing to do with their bottom line - or profit - just their margins.


RE: Wow
By smitty3268 on 2/2/2007 5:55:17 PM , Rating: 2
quote:
The real question is, do you think Intel would have offered, or Dell would have accepted, $1 billion if it was illegal? LOL.


Yes, because I've never heard of any big company ever being involved in an accounting scandal... LOL


RE: Wow
By TomZ on 2/2/07, Rating: 0
RE: Wow
By Kuroyama on 2/2/07, Rating: 0
missing the point
By mrgq912 on 2/2/2007 4:13:00 PM , Rating: 4
Some may think this is just more conspiracy theory, but this isn't AMD throwing accusations, its the investors of Dell.

Their has to be some merit to this. Prior to Core2duo, AMD was making an incredible chip. Just because Dell sells to the average joe, doesn't mean its top brass is clueless, I am sure they noticed AMD's performance, and to not sell AMD based cpu's seems crazy.

Also 1 Billion is a lot of money but 250M per quarter for a big company like Dell I believe is just blip in the accounting radar. Not much.




RE: missing the point
By TomZ on 2/2/07, Rating: -1
RE: missing the point
By encryptkeeper on 2/2/2007 4:32:06 PM , Rating: 2
The suit is claiming that Dell received those rebates (and that accepting them may have been illegal in the first place) AND did not adjust their bottom line for it. Imagine if you were involved in profit sharing for Dell, you'd be pissed as HELL! Resellers get back-end money from their suppliers all the time, but legit resellers report them. If they paid Dell extra money to ONLY sell Intel, and Dell didn't adjust their accounts for it, never told investors, what is that situation called? A BRIBE.


RE: missing the point
By TomZ on 2/2/07, Rating: 0
RE: missing the point
By masher2 (blog) on 2/3/2007 1:46:18 AM , Rating: 2
> "Bribery? Are you sure about that? I'm no lawyer, but I've never heard that term used for this type of situation. "

It would only be bribery if Intel paid Dell executives personally, as opposed to the company itself. As you rightly point out, if a crime had been committed, there would be state and/or federal officials involved. This is just a civil suit, motivated by shareholders unhappy over recent stock price declines.


RE: missing the point
By Tom Tom on 2/3/2007 12:25:59 PM , Rating: 2
Dell is under a formal investigation by the SEC. It started as informal in mid 2006.


RE: missing the point
By masher2 (blog) on 2/3/2007 12:37:15 PM , Rating: 1
> "Dell is under a formal investigation by the SEC"

The SEC is responsible only for the relationship between a public corporation and its shareholders. The SEC investigates issues in proper reporting and accounting of the company books...which is indeed the focus of this SEC probe.

This in no way implies any illegal action between Dell and Intel and, had there been, the SEC would not be the agency to investigate it.


RE: missing the point
By Tom Tom on 2/3/2007 7:41:06 PM , Rating: 2
I am not certain what the focus of the SEC investigation is, but it is possible they are looking at how Dell booked Intels "kickbacks" or "incentives" or whatever they are calling them.


RE: missing the point
By masher2 (blog) on 2/3/2007 7:56:55 PM , Rating: 1
Still, thats simply a reporting issue between Dell and its shareholders. It doesn't mean the incentives themselves were illegal.


RE: missing the point
By Tom Tom on 2/4/2007 11:22:05 PM , Rating: 2
quote:
I am not certain what the focus of the SEC investigation is, but it is possible they are looking at how Dell booked Intels "kickbacks" or "incentives" or whatever they are calling them.


I wasnt implying the transactions or accounting of were illegal, only that the SEC may be looking into them.


RE: missing the point
By peldor on 2/2/2007 4:33:24 PM , Rating: 2
Exactly, the investors are pissed because Dell's stock is down 40% over the last 2 years vs +20% for the DOW/S&P and +100% for Hewlett Packard.

I doubt that Intel's exclusivity deals were illegal for Dell to accept (though possibly an anti-trust issue for Intel). If Dell's accounting is funky over the past few years, they're screwed. Sarbanes-Oxley don't play dat.


RE: missing the point
By DeepThought86 on 2/2/2007 4:37:14 PM , Rating: 2
Actually, it's a lot of money, because it's like adding that much of pure profit. Dell's margins for 2006 were 17.8%. This means that $250mil = 1.4 BILLION of extra revenue per quarter, or $5.6B extra per year .

This is a significant amount of money, even for Dell.



By lplatypus on 2/2/2007 5:07:02 PM , Rating: 2
I don't understand how it makes sense for shareholders would sue the company whose shares they hold. Any compensation paid to the shareholders would have to come out of the company's assets which are owned by the shareholders anyway right? Can someone explain what I'm missing here?




By TomZ on 2/2/2007 5:26:03 PM , Rating: 1
I'm guessing that such shareholder(s) would first sell the stock, take their loss, and use that loss to establish monetary damages in the suit, plus of course ask for millions more in punitive damages so the team of attorneys can be well compensated.

And of course they will try to get it certified to be a class-action suit, so that the attorneys can earn more money, and small investors like you and I can have the chance to get a check for $0.32 in the mail in 3 years, or a 10% discount for any Dell accessory costing less than $25 with purchase of $2000 or more expiring 30 days for the date of issuance.


By alifbaa on 2/2/2007 5:45:42 PM , Rating: 2
Bingo!


By dagamer34 on 2/2/2007 10:03:56 PM , Rating: 2
Because compared to the $1 billion per year Dell was receiving, they could have easily dominated HP by also offering AMD chips as well. One of the reasons why HP is now seen as being truly #1 was because they backed the better chip.

Also, when accounting starts making errors like these, then you start to wonder what else is being covered up. They don't want Dell to end up like another Enron, chewed up in an accounting scandal.


By lplatypus on 2/4/2007 6:19:44 AM , Rating: 2
This still doesn't really make sense for me. It doesn't seem fair that the remaining shareholders need to suffer the loss twice: first in the loss of value of their own unsold shares, and then again in the damages paid out of company coffers to those ex-shareholders who are suing.

Who would be represented by a class-action suit? It couldn't be all current shareholders or else they'd be effectively suing themselves which was my original problem.

I can understand a lawsuit against the directors personally, though I doubt they'd have enough money to satisfy a claim for damages on that scale.


By ElFenix on 2/4/2007 11:45:18 AM , Rating: 2
this is a group of lawyers trying to get their attorneys fees. there are a few people out there who own 1 share of every company as professional shareholders (usually associated with a law firm and with the shares paid for by the firm). every time something goes wrong a lawyer can sue using that professional shareholder as the plaintiff. when they win, they can get their fees from the corporation


By DrDisconnect on 2/5/2007 11:02:03 AM , Rating: 3
If your were an investor that bought into the company a couple years ago based on earnings inflated by the 1 B$ a year from Intel you would have bought into what was perhaps a sick puppy with the symptoms being masked by the kickback. Now with the subsidy gone, economic reality sets in and the shareholders who might have invested elsewhere had they known the business was underpined by kickbacks want compensation for their losses. Yes they received the benefits of the profits before but the stock decline has far exceeded what they might have reaped from those benefits and is likely a lasting decline with the kickback revenue gone.


Playing Dirty
By SakuraChan on 2/2/2007 4:10:06 PM , Rating: 2
It's not you called a business, if you don't play dirty...
trying to play boy scout won't get you a medal in business :P...




RE: Playing Dirty
By Regs on 2/2/2007 4:58:26 PM , Rating: 2
I agree with you on that one. The larger the business - the more ego, the more big-headed, and the more protective of it's assets the company becomes.


Do the math, its sensational BS
By ChipDude on 2/2/2007 8:12:24 PM , Rating: 2
Dell MS about 15%
Total CPU volume about 200 Million
ASP for a chip about 150 bucks

You really think INTEL would kick back what amounts to half of their gross margin to keep a single supplier even Dell on INTEL only.

Sorry INTEL is too greedy and I don't think they are really that stupid.

Dell is desperate and their finances suck, it has more to do with a broken business model then any kick back.





By dagamer34 on 2/2/2007 10:07:13 PM , Rating: 2
Profits are one thing, revenues are another. Intel wants to make chips regardless and is depending on the whole, "I got Intel before, let me get Intel again" senario. Typically, what this amounts to is that market share is FAR more important than profits (and it really somewhat is if you have quite a bit of money in the bank), and the more you are exposed to a product, the more likely you are going to purchase it.

Intel NOT having exclusivity with Dell would have been a far worse senario until Apple decided to hop onto the x86 train.


Dr. Evil is in that picture
By xuimod on 2/2/07, Rating: 0
RE: Dr. Evil is in that picture
By Pythias on 2/2/2007 3:38:50 PM , Rating: 3
AMD CEOs with lasers on their heads.


It's not a bribe, legally.
By Hawkido on 2/2/2007 5:50:03 PM , Rating: 3
Morally you might consider it a bribe, but legally it isn’t.

If Intel weren’t already under the scrutiny of anti-trust lawyers, they wouldn’t care. However it is what Dell did with the money that is shady. According to the report, Dell filed the money in the marketing fund (which is rarely reported to the shareholders – pre the report) however the money was actually used to shave the quarterly expense down suddenly right before Quarterly Profit Disclosure to the investors, which artificially inflates the value of the stock, and thus, encourages investors to keep their money in the company. Any investor who held stock in Dell from the first time one of these payments was handled in that manner [Price x] (assuming the suit is successful) will be able to sell their stock back to Dell at [Price x], regardless of its current price. Basically, it will hedge those investors with a short on Dell stock.

The potential crimes are:
Stock price manipulation (SEC will look into this)
Padding the Books (Defrauding investors) if any of that money was diverted to compensation of executives, or executives were “rewarded” because of artificially inflated company performance. (Civil and Criminal court here)
And if Intel is found guilty of anti-trust due to this discovery, anti-trust behavior. (DoJ's turf here)




Resignation?
By medavid16 on 2/2/2007 5:00:45 PM , Rating: 2
Didn't a couple people resign a few days earlier? last week or so? maybe some questions need to be directed at them *ahem ahem*




hmmm....
By TheDoc9 on 2/2/2007 6:22:55 PM , Rating: 2
There have been rumors about dell and Intel for years, it would be sad for the employees.




Nice choice of pictures
By Hare on 2/3/2007 3:43:56 AM , Rating: 2
Good job with the article thumbnails. I love the frontpage.
* Dr Evil
* B. Gates
* Ballmer

Everyone with a wide stupid grin :)




I'd believe it
By Nik00117 on 2/3/2007 10:15:41 AM , Rating: 2
Quite frankly its a wise decision on intels part.

See dell is a HUGE supplier of PCs, so even if a person doesn't buy a dell but sees a dell run on an intel he'll go "Hey thats cool it runs on a intel, I like that I want one too!"

Now he may or may not buy from dell for that reason but his chances of buying an intel are a lot higher. If he builds one himself since all hes really seen are intels, he'll want an intel etc.

Though I noticed when AMD had the best chip on the market the comments for those types of lawsuits was generally "Yea intel is finally getting some payback" etc etc but it seems that your views go as who gots the best chip on the market.

Quite frankly I'm not going doubt it for a second that Dell had an exclusive deal with Intel, cause it doesn't make busioness sense to limit your product when you can avoid diverifying. Unless of course the postive income outways the negative loss.




I wonder...
By INeedCache on 2/3/2007 8:54:58 PM , Rating: 2
how many of you that seem to think no laws were broken here would be willing to bet anything significant on that? As far as that silly "corruption index", if you really believe that stuff I'd like to discuss with you some land I have for sale in Florida.




ENRON?
By Mitch101 on 2/5/2007 10:26:21 AM , Rating: 2
To answer the question on how Intel could slip Dell a Billion Dollars and no one notice.

Probably the same accountants that were able to hide ENRON's invisible cash flow.




Is that Dr. Evil?
By BirdDad on 2/5/2007 4:40:02 PM , Rating: 2
it looks just like him!




Odd.
By Pythias on 2/2/07, Rating: -1
RE: Odd.
By outsider on 2/3/2007 5:10:11 PM , Rating: 2
I thought the sound business practice was "you'll pay us to use our products".


Money missing?
By Borat Sagdiyev on 2/6/07, Rating: -1
Not exactly rocket science
By Beenthere on 2/2/07, Rating: -1
RE: Not exactly rocket science
By alifbaa on 2/2/2007 5:44:34 PM , Rating: 2
You're right. It was easy to assume there was some sort of special deal there, but I wouldn't go so far as to say it was easy to assume the deal was illegal.

Either way, this is merely a civil matter. There is no allegation or even investigation into criminal offenses at this point. The most we're talking about right now is that Dell may have improperly applied the generally accepted accounting practices in this case. While the money involved may be astronomical, it is fairly easy to make the mistake they are alleged to have made. Unfortunately, the fact is that if any company of Dell's side is not highly aggressive with their accounting practices, they just won't be able to continue to receive the kind of financial support they need to continue to expand and thrive. Perhaps they crossed the line, but right now no one is saying they did anything grossly negligent or dishonest.


RE: Not exactly rocket science
By masher2 (blog) on 2/3/2007 1:56:10 AM , Rating: 2
> "In America you can buy all the justice you can afford. "

The only people who say this are those who've never been to a country where it's really true. The corruption index is very low in the US, thank you. If you think money buys you immunity, take a look at Martha Stewart, Kenneth Lay, or all the recent criminal charges being levelled against HP insiders. State and federal prosecutors usually prefer well-heeled defendants. It makes a bigger media splash...and they can afford far larger fines.

Now, immunity for those with political connections is a bit of a different story...as any member of the Kennedy family can testify.


RE: Not exactly rocket science
By lplatypus on 2/4/2007 8:44:10 PM , Rating: 2
quote:
Now, immunity for those with political connections is a bit of a different story
But money can buy lobbying and astroturfing and donations to politicians' campaign funds, right?


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