End of the Year Brings A Burst of Settlements With Justice Department

Justice's Matthew Friedrich announces Siemens's guilty plea to violations of the Foreign Corrupt Practices Act. The German company recently agreed to pay $450 million in fines. (By Chip Somodevilla -- Getty Images)

"This is traditionally the time to ram a settlement through because no one notices," said Patrick Burns, a spokesman for Taxpayers Against Fraud, a nonprofit group that supports whistleblowers and their lawyers. "Putting it out between Christmas and New Year's is brilliant."

For Siemens, the trouble began with a 2006 raid by Munich prosecutors, who were searching for evidence connecting the electronics and engineering company to a wide-ranging series of corrupt payments that helped grease the skids for international projects.

Employees in far-flung operations routinely visited "cash desks" to withdraw millions of dollars and paid business consultants to serve as middlemen and slip the funds to foreign government officials in Argentina, Venezuela, Bangladesh and elsewhere, the company reported. In all, the joint probe by the U.S. and German governments uncovered $1.36 billion in payments, including $805 million in bribes to officials, since 1999, according to court papers.

At a recent news conference, federal prosecutors described the criminal fine as "strong medicine" and cited "extraordinary steps" that Siemens took to uncover the scope of the bribery and to restructure its operations.

The company hired a law firm and accounting experts to probe its problems, ultimately paying more than $776 million to advisers who reviewed millions of documents and interviewed 1,750 employees, according to a statement from Siemens.

Elizabeth Cho, a spokeswoman for the company, said recently that Siemens has made progress in complying with U.S. and international fraud laws. A lawyer for Siemens was traveling and could not be reached for comment.

Ellen S. Podgor, a law professor at Stetson University who tracks corporate fraud developments, said the timing of the Siemens case raised questions about "an end-of-the-year crunch."

"It seemed to me to be interesting coming at the end of the year," Podgor said in a telephone interview.

On her blog devoted to developments in white-collar crime, Podgor has bestowed a 2008 "best timing" award on Siemens for reaching a plea deal with the government before a change in presidential administration.