MercoPress. South Atlantic News Agency

Siemens admits bribery payments and is fined 1.4 b. USD

Siemens CEO Peter L?scher : “We regret what happened in the past”

Electronics giant Siemens AG has agreed on Monday to pay 1.4 billion US dollars to US and German authorities after the company allegedly engaged in bribery, the SEC said in a release.

According to the SEC, the Munich-based company will pay a 350 million USD fine to the commission to pay back the money it wrongfully obtained after bribing several institutions and providing kickbacks to get construction jobs. The company will also pay 450 million to the US Department of Justice to settle criminal charges and 569 million to the Office of the Prosecutor General in Munich. The SEC alleged that Siemens paid bribes and kickbacks to organizations around the world between 2001 and 2007. The SEC said the bribes were paid to obtain licenses to design and construct the metro transit lines in Venezuela, build power plans in Israel, refineries in Mexico and develop national identity cards in Argentina, among other actions.. "Siemens paid staggering amounts of money to circumvent the rules and gain business," said SEC Chairman Christopher Cox in a statement. "Now, they will pay for it with the largest settlement in the history of the Foreign Corrupt Practices Act since it became law in 1977." The act prohibits US companies from bribing foreign government officials. According to the SEC, the company also used bribes to develop mobile telephone networks in Bangladesh, and medical devices in Vietnam, China and Russia. Siemens allegedly used kickback schemes to sell power stations and equipment to Iraq under the United Nations' Oil for Food Program. In all, the company engaged in more than 1.4 billion in bribes, earning more than 1.1 billion on its illegal transactions. "We regret what happened in the past," Siemens CEO Peter Löscher said in a statement. "But we have learned from it and taken appropriate measures. Siemens is now a stronger company. Siemens admitted that between September 1998 and 2007 it made "significant payments" directly or indirectly to several "high placed officials in Exchange for a privileged treatment in the awarding a contract for a national identity cards system" in Argentina valued in a billion US dollars. The amounts involving Argentine officials total 31.3 million US dollars and were registered as "legal or consulting fees". Similarly with Siemens Venezuela, where from November 2001 to May 2007, "at least" 18.8 million US dollars were handed to Venezuelan officials to favour the company in a tender to construct suburban trains for Valencia and Maracaibo. Siemens affiliates in Argentina and Venezuela will have to pay fines of half a million US dollars.