Siemens Agrees to Pay Fine to Settle Bribery Charges
Saturday, December 13, 2008
Siemens AG, Europe's largest engineering company, has agreed to pay $800 million to settle U.S. charges that it violated anti-corruption laws by paying $1.36 billion in bribes to government officials worldwide.
The German company knowingly used off-book accounts to conceal corrupt payments, mischaracterized bribes in corporate accounting and falsely described kickbacks paid to the Iraqi government in connection with the United Nations oil-for-food program, U.S. Attorney Jeffrey Taylor said in court papers filed yesterday in Washington.
A hearing on whether to accept the Munich-based company's settlement is scheduled for Monday, 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.
Siemens has been embroiled in a bribery scandal that was first disclosed in November 2006, leading to investigations in at least a dozen countries. The company has cooperated with prosecutors.
Chief executive Peter Loescher, hired in July 2007 to clean up after the bribery scandal, replaced half of the top 100 executives and appointed division heads to eliminate decision-making by consensus on a board.
The Munich Regional Court last year fined Siemens $1.33 million, the maximum fine, for bribes paid from 2001 to 2004 to government officials in Libya, Nigeria and Russia.