Workplace

Microsoft whistleblower claims he was fired for exposing corruption

Former Microsoft Senior Director Yasser Elabd is working with whistleblowing agency Lioness to share information about kickbacks and bribery in the Middle East and North Africa.

Hands exchanging money.

Microsoft has already been charged once with violating the Foreign Corrupt Practices Act based on an anonymous whistleblower complaint.

Photo: Wirat Namkate / EyeEm via Getty Images

In June 2019, former Microsoft Senior Director Yasser Elabd traveled to Washington, D.C., to meet with members of the Securities and Exchange Commission, the Federal Bureau of Investigation and the U.S. Attorney General’s office to discuss his allegations that Microsoft was ignoring bribery at subsidiaries in the Middle East and Africa.

The meetings lasted nearly the entire day. Federal agents asked Elabd questions for hours. Elabd’s attorney told him that it was one of the first times they had witnessed the AG’s office send a representative to a whistleblower meeting like his.

But more than a year later, the SEC still hadn’t made a decision about Elabd’s allegations. The agency kept promising him that the team in charge of his case would make a decision soon about whether they would bring charges against Microsoft. Finally, at the beginning of March 2022, the case agent in charge of Elabd’s whistleblowing report told his lawyer that the SEC was closing the case because it didn’t have the resources to conduct interviews and find documentation abroad during the coronavirus pandemic.

So Elabd decided to try a different route to share what he knows. Today he published an essay on the whistleblowing website Lioness that accuses Microsoft of firing him after two decades with the company because he asked questions about what he saw as bribery within the contracting services Microsoft uses to sell software to government and public bodies in countries in the Middle East and Africa.

“We are committed to doing business in a responsible way and always encourage anyone to report anything they see that may violate the law, our policies, or our ethical standards. We believe we’ve previously investigated these allegations, which are many years old, and addressed them. We cooperated with government agencies to resolve any concerns," Becky Lenaburg, Microsoft's vice president & deputy general counsel for compliance and ethics, wrote to Protocol.

The Foreign Corrupt Practices Act makes it illegal for U.S. companies or citizens to bribe people working for foreign governments, and a federal whistleblowing protection program is supposed to give people like Elabd privacy protection and rewards for reporting evidence to the SEC that could prove a company is breaking that law. Microsoft has already been charged once with violating the Foreign Corrupt Practices Act based on an anonymous whistleblower complaint like Elabd’s. In July 2019, the SEC announced that Microsoft had paid $16 million to settle corruption-related charges for licensing services in four countries: Hungary, Thailand, Saudi Arabia and Turkey.

Research from international financial institutions has found that bribery, kickbacks and corruption remain intractable problems within the governments and financial institutions of some countries in the Middle East and Africa; for example, a 2019 UN survey found that 30% of all Nigerians who interacted with government officials were asked to pay them bribes. “Progress in eliminating this problem has been limited and corruption still stands as a major obstacle for doing business in the region,” according to one report from the Organization for Economic Cooperation and Development.

Elabd told Protocol that he believes that the people who work for the contracting services Microsoft uses to sell products in these Middle Eastern and African countries are regularly using bribes and kickbacks, and that Microsoft knows about these bribes. He also believes that he was dismissed from the company because he insisted on asking questions about what he believed to be suspicious financial transactions. He said that he has spoken with at least five other current and former Microsoft employees who shared similar experiences and frustrations with him and gave that list of names to the SEC as people who were willing to be interviewed to share their stories and corroborate Elabd’s claims.

Lioness, the organization that published Elabd’s essay, is run by Ariella Steinhorn and Amber Scorah, who work in tandem with whistleblowing attorneys and nonprofits to help people like Elabd share their stories publicly. Because the Foreign Corrupt Practices Act includes a federal whistleblowing program, attorneys who work with sources like Elabd usually receive a portion of the financial reward given when the report results in a successful prosecution (though Elabd’s did not).

Elabd wrote in his essay that he believes he was dismissed from his role at Microsoft for asking too many questions about bribery and corruption. During his two decades at the company, he was promoted multiple times, handling global strategic accounts and, eventually, helped manage Microsoft’s public financial partnerships in the Middle East and Africa. But after he reported a request for $40,000 from a business fund that seemed suspicious and unjustified in 2016, he said his relationships with his managers changed dramatically. Though the suspicious request was eventually stopped after he reported it, he then escalated the issue above his manager, was reprimanded for doing so and then eventually emailed Microsoft CEO Satya Nadella to say he felt mistreated by his manager, according to the essay. Microsoft then put him on a performance improvement plan and fired him in the summer of 2018, after he refused to acknowledge the PIP. (He now runs a small IT firm with other former Microsoft employees.)

One audit of a Microsoft contracting service reviewed by Protocol, labeled as from the “Microsoft Partner Audit Program," describes how products were discounted but then customers paid the full amount, how orders for Microsoft products were placed without actual purchase agreements in place and how the contracting service failed to prove that it actually conducts required anti-corruption risk assessments.

This audit and Elabd’s other allegations in the essay mirror some of the violations described in the 2019 SEC settlement. In his essay, Elabd describes a former colleague who sent him documentation that shows how government bodies in Qatar and Nigeria were paying for Microsoft licenses despite the fact that they did not have any computers that could actually use the licenses, meaning they were likely paying for nothing they could use.

Elabd also claimed that he believes that Microsoft and its subsidiaries are often made aware of the corruption, bribery or kickbacks but generally try to quiet people who want to speak publicly about the problem. He described one employee who he believed Microsoft had identified to be corrupt. “Executives from Microsoft’s human resources and legal departments confronted the employee, who threatened to reveal the scale of corruption inside Microsoft beyond his individual case if they took further action. He resigned and joined Oracle the next day,” Elabd wrote in his essay.

When Protocol asked Elabd why he had decided to file the whistleblower complaint, he said that he simply wants Microsoft to do more to fight corruption at its subsidiaries. “I just want them to fight the corruption, and to not cover up when there is corruption,” he said.

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