Former Siemens Executives Charged With Bribery

WASHINGTON — Eight former executives and contractors of Siemens, the German industrial giant, have been charged with criminal bribery in a decade-long effort to help the company secure a $1 billion contract to produce Argentina’s national identity cards, the Justice Department announced Tuesday.

The individuals conspired to pay more than $100 million in bribes to “high-level Argentine officials” in violation of the Foreign Corrupt Practices Act, the Justice Department said. Among those indicted was Uriel Sharef, who from July 2000 to July 2007 was a Siemens managing board member, a position just below the chief executive in rank.

Roughly $60 million in bribes were actually paid in the case, a Justice Department official said.

The indictment documents “a stunning level of deception and corruption,” said Lanny A. Brewer, an assistant attorney general. “Business should be won or lost on the merits of a company’s products and services, not the amount of bribes paid to government officials.”

In 2008, Siemens and its Argentine subsidiary pleaded guilty to criminal violations of the corrupt practices act, agreeing to pay fines of $448.5 million and $500,000, respectively. At the same time, the companies paid another $1.15 billion to settle charges brought by the Securities and Exchange Commission and the Office of the General Prosecutor in Munich.

On Tuesday, the Securities and Exchange Commission also announced civil bribery charges against seven former Siemens executives, six of whom were also named in the criminal indictment.

Robert Khuzami, director of enforcement for the S.E.C., said the case was important because “one of most critical functions of law enforcement is to communicate to companies and individuals that they’re not dupes for obeying the law.”

By enforcing the corrupt practices act, he added, “we reward those companies who refuse to pay bribes” and “root out competitors who do stoop to those levels.”

In both the criminal and civil cases, the individuals were charged with having paid bribes beginning in 1996 to secure the contract and, later, to overcome the Argentine government’s suspension of the project in 2001. The authorities charged that bribes continued to be paid for another six years to a different administration in Argentina in a failed effort to overturn the suspension.

Mr. Brewer said that the cooperation of Siemens corporate officials was “outstanding and extraordinary,” adding that it “played a large role in how we approached this matter.” American authorities also cooperated with the Munich prosecutor’s office in bringing the charges.

One of the men charged by the S.E.C., Bernd Regendantz, settled the S.E.C.’s charges by paying a $40,000 fine without admitting or denying the charges. Mr. Regendantz was not charged in the criminal indictment. The other individuals, who range in age from 51 to 79, are not in custody and are living abroad. United States officials said they were working with foreign governments to bring the individuals to the United States to face the criminal charges.

The cases were filed in United States District Court in Manhattan. The Justice Department said that at least $25 million of the bribes were funneled through United States institutions, giving criminal authorities here jurisdiction. Siemens began issuing financial securities in the United States in 2001, giving the S.E.C. jurisdiction over the $31 million in bribes that are alleged to have been paid after that date. Siemens has about 60,000 employees in the United States.

Article source: http://www.nytimes.com/2011/12/14/business/global/former-siemens-executives-charged-with-bribery.html?partner=rss&emc=rss