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Details of Siemens scandal becoming clear

Posted: 23 Apr 2008 ?? ?Print Version ?Bookmark and Share

Keywords:Siemens? bribery scandal? witness? suspects? corruption?

A year and a half after the police raided the Siemens headquarters in Germany and discovered a bribery scandal, the dimensions of the scandal are becoming visible. Former CEO and head of Siemens' supervisory board, Heinrich von Pierer, contacted the prosecutor's office last April 18.

According to media reports, it appears that Pierer knew of the bribery practices in the conglomerate, and in some cases he exerted pressure on managers to put aside ethical concerns and support them. The talks between Pierer and the prosecutors will continue, with Pierer listed as a witness. It is not yet clear if the prosecutor will open a procedure against Pierer, but testimonies heavily incriminate the "Grey Eminence" of Germany's largest technology concern.

Growing scandal
A year ago there were 50 suspects listed; presently there are 270 names on the list, according to the German newspaper S�ddeutsche Zeitung. Most of the suspects are present or former Siemens employees, but there are also business partners included in the list.

The center of the affair lies within the former telecommunications, mobility, power generation and power distribution business divisions. What brought Pierer into the affair is the testimony of a witness working for the company's IT services division. The high-ranking manager, whose name was not specified, said when he approached Pierer years ago to express his ethical concerns regarding questionable money transfers for an IT project in Argentina. Pierer allegedly said he should "set aside his objections and behave like a soldier," a statement Pierer strongly disclaims.

In the meantime, testimonies from witnesses and suspects have been published that suggest corruption was widespread and generally accepted in the conglomerate. According to the statements, the prevalent business climate in the company made it extremely difficult to opposeeven after 1999 when it became illegal in Germany to use bribery in the acquisition of assignments from abroad. In the years between 2000 and 2006 alone, Siemens obviously paid more than 1.3 billion euros (about $1.95 billion) to bribe business partners.

Investigating the case
After the affair had come to light in 2006, Klaus Kleinfeld, Pierer's successor as CEO, announced that the case would be thoroughly investigated. Against the background of rising public pressure, Pierer resigned as chairman of the supervisory board about year ago. A few days later, Kleinfeld also announced his resignation.

Kleinfeld's successor, Peter Loescher, has made it clear that he intends to resolve the case irrespective of persons. He seems to take his promise seriously: While at the prosecutor's office there are three persons working on the case, the law firm Siemens Debevoise & Plimpton, which Siemens has assigned to throw light on the scandal, has more than a hundred lawyers working on it.

- Christoph Hammerschmidt
EE Times Europe

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