The headquarters of Uber in San Francisco. (Eric Risberg, AP)
San Francisco - Uber, facing a federal probe into whether it broke
laws against overseas bribery, has embarked on a review of its Asia
operations and notified US officials about payments made by staff in
Indonesia, people with knowledge of the matter said.
Justice Department looks into a
possible criminal case, Uber is working with law firm
O’Melveny & Myers to examine records of foreign payments and
interview employees, raising questions about why some potentially
problematic business dealings weren’t disclosed sooner, said the people,
who asked not to be identified because the details are private.
Attorneys are focused on suspicious activity in at least five Asian
countries: China, India, Indonesia, Malaysia and South Korea. For
instance, Uber’s law firm is reviewing a web of financial arrangements
tied to the Malaysian government that may have influenced lawmakers
there, the people said.
Uber said it’s cooperating with investigators but declined to comment
further. Wyn Hornbuckle, a Justice Department spokesman, declined to
Late last year, Uber had a run-in with Indonesia police over the
location of an office in Jakarta providing support to local drivers,
people with knowledge of the events said. Police officers said the space
was outside city zoning for businesses, so an employee decided to dole
out multiple, small payments to police in order to continue operating
there, the people said.
The transactions showed up on the employee’s
expense reports, described as payments to local authorities.
Uber fired the employee, the people said. Alan Jiang, the company’s
head of Indonesia business who approved the expense report, was placed
on a leave of absence and has since left the company. Jiang didn’t
respond to requests for comment.
At least one senior member of the legal team at Uber initially
decided not to report the incident to US officials when he learned of
it late last year, the people said.
After the Justice Department
approached Uber about possible violations of the Foreign Corrupt
Practices Act, Uber informed officials about what happened in Indonesia.
The Justice Department can be more lenient when a company voluntarily
Uber’s law firm is also investigating a corporate donation, announced
in August 2016, of tens of thousands of dollars to the Malaysian Global
Innovation and Creativity Centre, a government-backed entrepreneur hub.
Around that time, a Malaysian pension fund, Kumpulan Wang
Persaraan (Diperbadankan), invested $30m in Uber, said people
familiar with the deal.
Less than a year later, the Malaysian government
passed national ride-hailing laws that were favorable to Uber and its
peers. Lawyers are trying to determine whether there was any form of
quid pro quo.
Emil Michael and Eric Alexander, two former business executives at Uber,
played key roles in negotiating those deals, the people said.
“We strongly refute our involvement in any quid-pro-quo
arrangements,” a spokesperson at Malaysian Global Innovation and
Creativity Centre said via email.
Uber’s law firm is also asking questions about how Alexander came
into possession of an
India rape victim’s medical records, a document he regularly carried
around with him for several months in 2015.
Michael and former CEO
Travis Kalanick were aware that Alexander had the medical report, and
they discussed it with colleagues. Alexander and Kalanick declined to
comment through spokespeople, and Michael didn’t immediately respond to
requests for comment.
Dealings in China and South Korea are also under review, though the
details are unclear. The bribery inquiry is one of at least three
federal probes the San Francisco-based company faces - the other two
involve software developed by Uber to gather data on competitors and
deceive law enforcement officials conducting stings on Uber drivers.
Before the probe into foreign payments, O’Melveny & Myers advised
self-driving car startup Otto on its sale to Uber.
Alphabet is now suing Uber over trade secret claims related to that
deal. In June, Uber asked O’Melveny & Myers to focus on the India
probe, and the scope expanded.
It’s common in corporate fraud cases for companies to conduct an
internal investigation into allegations of misconduct and report those
findings to the Justice Department. Such internal probes often help the
government decide the size and scope of an investigation.
The mounting legal troubles have played a role in the departures of
several top executives, including Kalanick. He was
pressured to step down by investors, who said his leadership put the
company at legal risk.
The head of compliance left this month, and
Salle Yoo, the chief legal officer, also said she plans to depart after
helping new CEO
Dara Khosrowshahi find her successor. On Tuesday, Michael Brown, head of
operations in Asia, said he plans to leave.
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