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Microsoft Lawyer: Microsoft “Covers up Alleged Misconduct, Mischaracterizes Evidence [...] Protects the Perpetrators and Retaliates Against Victims.”

Posted in Finance, Fraud, Google, Law, Microsoft, SCO at 11:57 am by Dr. Roy Schestowitz


“…Microsoft wished to promote SCO and its pending lawsuit against IBM and the Linux operating system. But Microsoft did not want to be seen as attacking IBM or Linux.”

Larry Goldfarb, Baystar, key investor in SCO

Summary: Microsoft moves legal department to India and the whistleblowers come out to tell the truth about how Microsoft operates

IN THE previous post we discussed Microsoft’s funding of SCO, which is attacking Linux in the courtroom. Microsoft loves to sue its competitors using “dummy companies” (see the lawsuits against Google for example), which works out pretty well because Microsoft decreased its legal budget by 15%, it fired 450 of its lawyers, and according to the following two news reports, Microsoft will “outsource general legal work to India”.

Microsoft Corp. has entered into an agreement with legal outsourcing provider CPA Global to offshore legal work to lawyers in India.

The technology giant began a pilot scheme with CPA in October and formally rolled it out at the end of 2009. A team of between three and five qualified lawyers at CPA are handling multi-jurisdictional legal support work, including legal research, for Microsoft. The lawyers are based in CPA’s offices in Gurgaon, near New Delhi.

Microsoft has been outsourcing basic intellectual property and patent renewal work to CPA for five years, using a team of around 70 CPA staff. However, the new arrangement for general legal work operates separately.


Software giant Microsoft will begin outsourcing general legal work to India after signing a deal with legal process outsourcing (LPO) company CPA Global. The news comes as CPA outlined plans to expand its Indian workforce from 600 to 1,000 by the end of 2011, and hinted at opening another outsourcing centre.

Microsoft’s massive layoffs and migration to India is not news. What definitely is news ought to be the following major report from Courthouse News:

Fired Worker Calls Microsoft ‘a Lawless Place’

Calling Microsoft “a lawless place,” a longtime worker claims in a class action that he was fired in retaliation for reporting supervisors’ misconduct. He claims the company “routinely produces and/or condones deficient investigations, covers up alleged misconduct, mischaracterizes evidence, refuses to preserve or provide pertinent facts and data, protects the perpetrators and retaliates against victims.”

Craig Bartholomew worked for Microsoft for 21 years, he says in his complaint in King County Court. He says he was fired after complaining that his supervisors had created a “dysfunctional environment that was harming Microsoft and risking certain of its programs and objectives.”

“Microsoft has twice tried to cover up what really happened, first wrongly claiming his termination was a layoff or RIF. Neither was or is true,” according to the complaint.

According to his complaint: “Microsoft can be a lawless place. Courts have found that its key executives have violated the law and/or sought to circumvent court rulings. Powerful employees, because of their perceived value to the company, has (sic) been protected. Employees who have reported misconduct by senior management have been punished or fired based on trumped-up charges.

It is hard not to recall the i4i trial misconduct which had Microsoft fined $40 million some months ago. This is clearly a company that disregards the law, even today. The new lawyers from India are likely to be more obedient to their masters and thus be less prone to retaliation. The above is not the first whistleblower by the way; putting aside allegation of Microsoft orgies and drug parties [1, 2], there is a long history of Microsoft's abuse of the law. A US government official once said that “the government is not trying to destroy Microsoft, it’s simply seeking to compel Microsoft to obey the law. It’s quite revealing that Mr. Gates equates the two.”

Now, it’s not just legal abuse. Let’s take the Xbox for example. It led Microsoft to getting sued for homophobia [1, 2, 3] (homosexual employees and clients) and a former Xbox employee who was trying to save customers (Xbox 360 put lives at risk). Microsoft ended up retaliating by firing him for saying the truth.

“It is hard not to recall the i4i trial misconduct which had Microsoft fined $40 million some months ago.”Looking at Microsoft’s financial department (we’ve just covered legal and technical), a former Microsoft employee is slamming the company for tax evasion [1, 2, 3, 4, 5, 6, 7, 8, 9] and it is reasonable to suspect more malpractice, especially given the shady past of financial fraud [1, 2] (Charles Pancerzewski from Microsoft’s financial department was paid millions of dollars to shut up about misconduct/fraud after he had produced evidence of it). Another former Microsoft financial executive might be leaving the Seattle area based on this news. Is he following the footsteps of the CFO?

Our reader Chips B. Malroy wrote to us earlier about this comment from Mini-Microsoft (mostly anonymous Microsoft employees) which says: “I don’t know how this is hidden, but fact is that Microsoft earns a lot just moving money across countries, betting on currency fluctuations. A lot of people in Finance are dedicated to this. When you have 60billion to move around, we are not talking about pennies here…”

“So MS might be playing the money game,” argues Malroy, “and getting away with it because they are an international company. This is most likely another way to evade taxes as well… playing the currency markets.” One of our readers has said to us the same thing for a couple of years now. It is too difficult to prove with any certainty because it requires audits. In a later post we will show what Microsoft has just been doing with President Obama.

Speaking of whistleblowers, here is Joe Wilcox sharing yet another confession from former employees of Microsoft. “There were a ton of bozos” is the summary.

Do middling, middle managers run Microsoft? That’s the consensus among the former Microsofties who shared their work stories with me over the last couple months. The new work week starts with another Microsoft Confessional — the fourth in four days — from 13-year company veteran Boris, which isn’t his real name, of course. Boris was smart enough to see the end coming, and he made preparations in the days before his May 2009 layoff. He learned to read middle managers the way a genuine fortune teller might read tea leaves.

“Microsoft Needs More Traitors,” says this new article from BNET:

Most companies dream of having loyal employees and managers. They want people who will follow the company strategy and stick to their jobs. But at Microsoft, a culture of loyalty has turned into slavish devotion to outdated strategy, outmoded thinking, and personal fiefdoms that today threatens to bring the company down.


Really? Microsoft focused on one narrow example and ignored every other criticism — the VP in charge of Office refused to adapt the product line to tablet computers, poor timing on Web TV and MP3 players, lost share in key product areas, and the steady exit of the company’s smartest employees. Yup, it was ignoring significant criticism because that’s not part of the program. It would just make the people in charge look bad.

Maybe the problem is that many traitors already work at Microsoft. They just don’t realize it.

Over at the Huffington Post, Microsoft’s Jim Allchin is quoted as saying “we were smoked”. It’s one of the Comes vs Microsoft exhibits that include Allchin’s “we are not on a path to win against Linux”, "we feel a huge threat from Linux", and "there’s going to be a patent lawsuit on Linux."

“Government attorneys accuse Microsoft of using its monopoly position to bully, bribe and attempt to collude with others in the industry, while illegally expanding and protecting its Windows franchise.”

The antitrust case: a timeline

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  1. your_friend said,

    February 21, 2010 at 3:29 pm


    This is what imploding companies look like. In general, all of the people pointing fingers are right and that’s why the company implodes.

    Microsoft no longer has $60 billion to “move around” it has debt. Pretending to make money off transactions that have larger costs than revenue in order to draw investors is the classic Ponzi scheme. Postal reply coupons are about as good a business as non free software. Everyone is realizing that they have been robbed.

    Roy Schestowitz Reply:

    The problem is that Gates and his gang are creating pyramids elsewhere now:


    Having had some direct experience with Myhrvold’s group (and hence my desire to remain anonymous), I suggest the following. “Patent troll” is too simplistic and limiting. Think of IV as a combination mob protection racket + ponzi monetization scheme.

    The goal is build an increasing portfolio of interlocking patents under control through a kind of pyramid scheme. Eventually the principals (Myhrvold, Gates, others) will cash out later. The patents are rarely held directly, instead they are held in an elaborate pyramidal network of LLC’s, LLP’s, etc.

    The mob protection racket is in the form of thier pitch to current patent owners & potential licensees: “we’ve never sued for infringement, but of course a few of our patents have been sold to folks who do sue for nasty damages. Be a shame if anything would happen to your nice business, eh? Why not join us as a licensee AND investor? I’m sure we can make sure no patents of interest to you end up with the nasties.”

    The idea is to get patent-owning firms (particularly multi-patent owners) to agree to sell ownership of the patents to IV, but also to get them simultaneouslyh INVEST in LLP’s that buy more patents. More investors means more $ to buy more patents, which brings more investors, which (especially when leveraged) brings more patents, which, …. until (someday) they have all the patents (of course Myhrvold & Gates are gone by then). All along the way, IV takes substantial mgt fees for managing all these portfolios & LLP’s.

    No, IV isn’t a troll per se. It’s probably worse long-term for the larger economy. Kind of like how some of the worse Wall St creatures haven’t been extorting per se, but when you put together a pyramid of SIV’s levering off each other and buying Mortgage backed securities and then artificial derivatives based off the already derivative securities, all with 1% capital you get something not very healthy for the economy, but enormously profitable for the bank that manages the setup for fees.

    [Comment at 02/18/2010 10:28 AM by Repentant Patent Owner]

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