German Industrial Giant Siemens to Pay $1.4 Billion to Settle Bribery Claims

Dec 22nd, 2008 • Posted in: News

But the firm’s troubles aren’t over: Clients worldwide are preparing lawsuits claiming that they paid too much for Siemens’ projects because of graft

BERLIN
Siemens, the giant German electronics and engineering firm, last week agreed to pay a $1.4 billion fine for corruption, settling a case brought by German and U.S. authorities.

The fines will be divided among the U.S. Department of Justice, the U.S. Securities and Exchange Commission (SEC), and German regulators, reports Forbes.

Among the charges against Siemens were SEC allegations that the company paid bribes and kickbacks to various organizations between 2001 and 2007 to secure construction projects such as transit lines in Venezuela, power plants in Israel, and refineries in Mexico, CNN reports.

Siemens, a 161-year-old conglomerate, has admitted various incidents of bribery and said that an internal investigation across its division showed that the practice was widespread, reports the Agence France-Presse.

In addition to paying the fines, Siemens agreed to appoint former German Finance minister Theo Waigel to monitor the firm’s compliance with anticorruption strictures.

Berlin-based Deutsche Welle notes that while the payments will settle existing charges, a variety of civil actions continues to dog the firm. Clients worldwide are planning to bring suit against Siemens, claiming that graft inflated the cost they paid for goods and services.

Siemens itself is suing some of its former executives, claiming they failed to mandate internal controls that would have prevented the growth of a culture of bribery, reports Deutsche Welle.

Sources: AFP, Dec. 17 — CNN, Dec. 17 — Deutsche Welle, Dec. 16 — Forbes, Dec. 15.

For more information, see: Related Newsline story, Dec. 15 — Related Newsline story, Sep. 29 — Related Newsline story, Aug. 4 — Related Newsline story, Aug. 4 — Related Newsline story, June 16.

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