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The founder accused of bribing customers to get a $25 million bonus just told his side of the story
(ServiceMesh) Eric Pulier
Last week, Computer Sciences Corp. sued one of its former star executives, Eric Pulier, in connection to an alleged bribery scandal. CSC says the situation caused the company to pay him an extra $25 million bonus.
And now, in a suit filed in Los Angeles against an Australian bank, lawyers are telling Pulier's side of the story.
The short version is this: Pulier's lawyers say the employees were not bribed, but were paid $2.5 million in advance for work they were contracted to do for a charitable foundation. They were paid in advance due to some tax advice received by the charitable foundation, the suit says.
A disputed $98 million payment and a $25 million bonus
CSC bought Pulier's company, ServiceMesh, for over $260 million and last week filed a lawsuit seeking to recoup $98 million.
(CSC) CSC CEO Mike Lawrie
CSC agreed to pay a special "earn-out" bonus to ServiceMesh stockholders if ServiceMesh brought in more than $20 million of extra business in the months shortly after the acquisition closed. For every $1 over $20 million ServiceMesh brought in, CSC agreed to pay more than $10.
During that period of time, the bank's employees at the center of the scandal signed several big multi-million contracts with ServiceMesh. With those contracts, the $20 million floor was exceeded by nearly $9.7 million, so CSC paid out another $98 million-plus to ServiceMesh equity holders including "a $25.3 million+ bonus to Pulier," CSC says in its lawsuit.
CSC is accusing Pulier of allegedly bribing two then-employees at one ServiceMesh's largest customers, the Commonwealth Bank of Australia (CBA), to sign contracts that triggered the extra $98 million payout.
A charitable foundation created and funded by Pulier paid over $2.5 million to those two bank employees. They were arrested after that. They maintain their innocence.
Pulier resigned in late April after allegations of bribery surfaced. A CSC spokesperson told Business Insider that he quit right before CSC was about to fire him. (Read the full statement here.)
Yes, bank employees were paid $2.5 million
(Commonwealth Bank of Australia) Commonwealth Bank of Australia
Now, Pulier's charity is suing the bank.
In that lawsuit, the foundation fully admits that it paid $2.53 million to these two employees, saying the money was "not a secret bribe, but was an open payment, advanced to these employees for work the two employees were hired to perform for the foundation."
It explains that payments were made in this way for tax reasons, because the foundation didn't achieve its tax-exempt status until later.
The lawsuit also says that the decision to hire and pay these two men came from the foundation's CEO, not Pulier.
The lawsuit is suing the bank, arguing that because the bank reported what it characterizes as "false" suspicions about its employees to the police, the foundation has lost access to the $2.53 million. It wants that money plus unspecified damages and attorney's
Eric Pulier, CEO & Chairman of ServiceMesh talks software led infrastructure LIVE on #th... http://t.co/MUqr1wp7tz pic.twitter.com/SF6xXDQc41
— SiliconANGLE (@SiliconANGLE) May 6, 2013
Pulier laying low in L.A.
Pulier's lawyers tell Business Insider that he has not gone into hiding, and is living in the Los Angeles area with his family.
After our original story published, we heard from one of the people who bought one of Pulier's companies.
This person described Pulier as having "a bit of an ego" and said he was known to use employees for "some of his side projects" which this source described as "an ethical blind spot."
All this means that the original lawsuit might have stemmed from a misinterpretation. It will all come out in court.
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