Siemens agrees to settle bribery charges
Siemens AG, Europe’s largest engineering company, agreed to pay $800 million to settle U.S. charges that it violated anti- corruption laws by funding $1.36 billion in bribes to government officials worldwide.
The Munich-based company used off-book accounts to conceal illegal payments, mischaracterized bribes in corporate accounting and falsely described kickbacks paid to the Iraqi government in the United Nations oil-for-food program, U.S. Attorney Jeffrey Taylor said in a criminal information filed Dec. 12 in Washington.
Siemens, which traces its origins back to 1847, has been embroiled in a bribery scandal disclosed in November 2006, leading to investigations in at least a dozen countries. The company paid kickbacks to get transport contracts in Venezuela, mobile-telephone networks in Bangladesh, power plants in Israel and traffic-control systems in Russia, prosecutors said.
“Siemens created elaborate payment schemes to conceal the nature of its corrupt payments,” prosecutors said in the charging documents. “The misconduct involved employees at all levels of the company, including former senior management.”
A hearing on whether to accept the settlement is scheduled for today, said Sheldon Snook, a court spokesman. Prosecutors are recommending a fine of $450 million for the company and units in Venezuela, Argentina and Bangladesh.
Under the agreement with the U.S. Securities and Exchange Commission and the Justice Department, Siemens will also have to forfeit $350 million in profits and submit to monitoring to ensure compliance with anti-bribery laws.
The company and U.S. officials are “close to reaching a conclusion,” Marc Langendorf, a Siemens spokesman, said in an interview, declining to comment further.
Siemens has been collaborating with prosecutors. It said last month it set aside 1 billion euros ($1.3 billion) to settle U.S. and German bribery charges.
According to court documents, from the mid 1990s to 2007, Siemens engaged in systematic efforts to knowingly falsify bribe payments in its books and circumvent internal accounting controls.
Former Siemens employees were hired as “consultants” to make corrupt payments to government officials, using 3M Co.’s “Post-It” removable notes to affix signatures on approval forms and conceal the identity of the signors, and backdating sham business consulting agreements to justify third-party payments.
The cases are U.S. v. Siemens Aktiengesellshaft, 08-cr-367, and U.S. Securities and Exchange Commission v. Siemens Aktiengesellschaft, 08-cv-2167, U.S. District Court, District of Columbia (Washington).