Siemens ruling details corrupt payments, firm fined 201 million euros

MUNICH, Germany—Scandal-scarred Siemens AG paid millions of euros in bribes to cabinet ministers and dozens of other officials as it sought to win lucrative contracts for telecommunications equipment, according to a court ruling that depicts a pattern of bribery by one manager, who spent 38 years with the company. The executive will testify about additional bribes that were made with the knowledge of senior executives. The company has identified €1.3 billion in suspicious transactions in 65 countries world-wide between 2000 and 2006, and the firm’s chairman and chief executive resigned earlier this year.

The court estimated that the bribes produced at least €200 million in “unlawful economic advantages” for Siemens, and Siemens was named by the court as an accessory. Under German law, prosecutors can fine a company €1 million and force it to surrender profits derived from illegal activity. Siemens said it won’t appeal the fines.

Siemens faces the threat of further fines by authorities and bans on public-sector contracts in several other countries where it already is being investigated, including the U.S.

A Munich court ordered the German conglomerate to pay €201 million ($ 284 million) for alleged bribery at its telecommunications-equipment unit. The fine doesn’t preclude further punitive action as prosecutors in Germany and other countries, primarily the U.S., continue to investigate alleged corruption in other parts of Siemens’s far-flung business empire that has rocked the engineering giant for much of the past year

An isolated criminal enterprise or a wider culture of corruption? That is increasingly the central question in the investigation into an alleged bribery scandal at Siemens, the German industrial group. Two diametrically opposed positions are emerging between the people under investigation by state prosecutors in Munich and the current and former senior Siemens executives. The suspects are taking the line that paying bribes out of slush funds was just part of the ordinary way of doing business at Siemens’s telecommunications division.

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“Siemens ruling details bribery across the globe,” Wall Street Journal, 16 Nov 07

“Siemens settlement sets off criticisms,” Wall Street Journal, 8 Oct 07

“Accusations fly in Siemens bribe scandal<" The Australian, 23 Dec 06

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