Computer Associates – Bad Business

When will people learn that you always get caught?

Two former top officials of embattled software maker Computer Associates International Inc. arranged to pay hush money to keep a bogus deal quiet, according to a revised indictment filed this week.

Newsday, citing court papers, reported that in February 2003 then-CEO Sanjay Kumar was contacted by a client in Asia. The client — not named in the indictment — warned of "future consequences" if Computer Associates didn't buy his silence over a swap deal he made as a "favor" to CA. Three years earlier the client had signed a $27 million licensing agreement with the Islandia, New York-based company; at the same time, Newsday added, CA agreed to buy an equal value of software from the client's company.

The court papers characterized the transaction as an improper swap that had no actual business purpose other than to boost CA's revenue. "Neither company used or sold the software that it licensed or purchased from the other," the papers reportedly allege.

Here's a radical idea – CA could grow revenues by fixing their business model… it would problemably be easier than coming up with these schemes.

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