Economy, Sci & Tech

HP Earned Millions From Sales in Iran

HP Earned Millions From Sales in IranHP Earned Millions From Sales in Iran

Under the leadership of Carly Fiorina, Hewlett-Packard sold hundreds of millions of dollars' worth of products to Iran through a foreign subsidiary, despite strict US export sanctions.

While she was in charge, Hewlett-Packard used a European subsidiary and a Middle East distributor to sell hundreds of millions of dollars of printers and other computer equipment to Iran, Bloomberg wrote.

HP’s omnipresence inside Iran was first reported in 2008 by the Boston Globe, which discovered that in 1997 the company struck up a partnership with a new Indian company in Dubai called Redington Gulf. The partnership was so successful distributing in Iran that HP printers were No. 1 there, with 41% of the market share by 2007. All US companies were banned from exporting to Iran in 1995, as then president Bill Clinton issued two executive orders tightening sanctions on Iran. If HP executives knew about what the Dubai-based distributor was doing, they would have been breaking US law.

After the Globe article came out, the Securities and Exchange Commission, which investigates violations of sanctions, wrote HP a letter inquiring about the Iran business. HP responded by saying that over $120 million worth of its  products had been sold to Redington Gulf for distribution in Iran by a foreign subsidiary based in the Netherlands. Because these sales took place through a foreign subsidiary, HP denied violating sanctions law.

When Fiorina was running against Barbara Boxer for California Senate in 2010, her campaign denied that she had any knowledge about HP’s business in Iran.

"It is illegal for American companies to do business in Iran," her spokeswoman, Beth Miller, said at the time. "To her knowledge, during her tenure, HP never did business in Iran and fully complied with all US sanctions and laws."

Fiorina's campaign did not respond to several requests for comment this week and last week.

But in 1999, HP’s general manager for the Middle East was quoted as saying, "Iran is a big market for Hewlett-Packard printers.”

And Fiorina herself praised rising HP sales in the region in 2003, although she did not mention Iran, the San Jose Mercury News reported.

Also in 2003, HP named Redington Gulf, the Dubai-based distributor, its “Wholesaler of the Year.” Redington put out a press release that year stating, "The seeds of the Redington-Hewlett-Packard relationship were sowed six years ago for one market—Iran.”

HP severed ties with Redington Gulf after the SEC inquiry.

Later on in her 2010 campaign, Fiorina partially admitted HP’s business in Iran and defended it in an interview with Lady Globes magazine, on the basis that technology could open up Iran to the world. She said that the Iran business was “distributing printer ink”, which she said was permitted in export law.

Former officials who have worked on sanctions said that HP was using a loophole in the sanctions regime by routing their sales through a foreign subsidiary, which was a murky area in the law.

In general, Republican presidential candidate Fiorina has had to defend her controversial record as CEO of HP from 1999 to 2005, with the company cutting tens of thousands of jobs during her tenure and the Republican eventually getting fired in 2005, MSNBC reported.

Fiorina—who sparred with Donald Trump over who had the worst business record—acknowledged during a debate, “Yes, we had to make tough choices. In doing so, we saved 80,000 jobs, went on to grow 160,000 jobs … We went from lagging behind to leading.”

She also pointed out that she has since landed the endorsement of an ex-HP board member who said the company was wrong to fire her.

Fiorina has been a staunch advocate of keeping crippling sanctions on Iran.