IBM Argentina and Banco de la Nación Argentina

In 1994, IBM signed a contract with the state owned bank Banco de la Nación Argentina to install computers at 525  offices and branches of the bank at a total cost of US$250 million. The arrangement was known as Proyecto Centenario. Later, IBM was allegedly accused of overcharging the bank by more than 90 percent. Argentina's national auditing office reported that in normal circumstances the cost should have  been about US$130 million. 1

Investigations revealed that bribes were paid to government officials. The markup for kickback was  allegedly fixed at 15 percent, which came to $37.5 million. IBM Argentina channeled the  money through local agents, Consad and its subsidiary CCR. An amount of US$37 million was depositied into CCR account, later passed on to accunts held in USA, Switzerland, Luxembourg, and Uruguay. Investigations carried out in Switzerland upon the request by Argentina's prosecuting judge Aldolfo Bagnasco, revealed that beneficieries of such accounts included directors or ex-directors of Banco Nación. 2 Judge Adolfo Bagnasco noted that IBM executives, Deloitte & Touche, a subcontracting company and Banco Nacion plotted to defraud the Argentine government by inflating the contract price with unnecessary services and costs. 3

Two of the recipients admitted having received gifts of money from IBM. IBM  paid a civil fine of US$300,000 to the United States government without admitting the case of bribery. 4 IBM maintained that neither the company nor its employees broke the law, though its top Argentine executives were dismissed for what the company described as 'poor business judgment', while Banco de la Nacion replaced its top officials for similar reasons. 5

In 2002, Swiss banks transfered $4.5 million in frozen assets to Argentina. The remaining US$33 million has not been fully recovered. 6