HP has agreed to settle a case with the Federal Communications Commission (FCC) and Department of Justice (DOJ) over allegations that company staff gave gifts to gain influence in important contacts.
The authorities were alerted by two whistle-blowers who noted that officials from the Dallas Independent School District and the Houston Independent School District were offered inducements.
Staff were offered trips on a yacht and tickets to the 2004 Super Bowl in exchange for inside information on $17m worth of contracts under the government's E-rate program, which was designed to get school children online.
"The E-Rate Program provides much-needed funding that allows underprivileged students to access the Internet," said Tony West, assistant attorney general for the Civil Division of the DOJ.
"We will continue to pursue those who use improper inducements to undermine the integrity of this important program."
Most of the fine will go back into the E-rate program and the FCC has promised tougher action against others who have misappropriated government funds.
"The activities at the center of this investigation occurred more than five years ago, the partner relationships have been terminated, while HP employees who violated E-Rate regulations were no longer with the company. HP fully cooperated with the authorities and the matter is now resolved," HP said in a statement.
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