By Lorna Brett

Hewlett-Packard has agreed to pay $US55 million to settle claims it defrauded the U.S. government by paying “kickbacks” to other companies to recommend its products, but has reaffirmed its denials of engaging in any illegal conduct.

According to the Washington Post, action was brought against HP by the Department of Justice on claims dating back to 2004 that the company was involved in a group of IT and consultancy companies who paid “influencer fees” to one another for recommendations that federal agencies should purchase their products. As a result of these “alliance relationships,” the companies involved all won numerous government contracts since the late 1990’s.

"As this case demonstrates, we will take action against those who seek to taint the government procurement process with illegal kickbacks" Department of Justice assistant attorney general for the civil division Tony West said.

HP said it agreed to the payment, one of the biggest of its kind, simply to end the case. It has repeatedly denied any wrongdoing.

"HP denies engaging in any illegal conduct in connection with these matters. We believe it is in the best interest of our stakeholders to resolve the matter and move beyond this issue," the company said in a statement.

The Department of Justice argued that the company’s "alliance relationships,” in which they charged each other less when working on a contract, amounted to kickbacks.

The other companies involved were Sun Microsystems and Accenture, both of which have also settled with the Department of Justice but denied any wrongdoing.