Siemens pleads guilty to bribery-related charges

Company to pay $1.6B in fines

WASHINGTON -- German electronics company Siemens AG and three of its subsidiaries today pleaded guilty to charges related to the U.S. Foreign Corrupt Practices Act (FCPA), for a range of actions, including attempted bribery of government officials worldwide, according to two U.S. agencies.

Due to charges resulting from an $805.5 million bribery scheme, Siemens and the subsidiaries have agree to pay criminal fines totaling $450 million, with the parent company paying $448.5 million, according to the U.S. Department of Justice and the U.S. Securities and Exchange Commission.

At a hearing in U.S. District Court for the District of Columbia, Siemens AG pleaded guilty to two counts of criminal violations of the FCPA's internal controls and books and records provisions. Siemens Argentina pleaded guilty to one count of conspiracy to violate the books and records provisions of the FCPA. Siemens Bangladesh and Siemens Venezuela each pleaded guilty to one count of conspiracy to violate the antibribery and books and records provisions of the FCPA.

Siemens' bribery effort was "unprecedented in scale and geographic reach," Linda Chatman Thomsen, director of the SEC's Division of Enforcement, said in a statement.

Siemens representatives were not immediately available for comment.

Beginning in the mid-1990s, Siemens AG engaged in systematic efforts to falsify its corporate books and records and knowingly failed to implement internal controls, the DOJ and the SEC said.

Siemens took advantage of lax internal controls to make bribery payments and other unaccounted payments totaling nearly $1.4 billion from March 2001 through 2007, the DOJ and the SEC said. Of that money, nearly $805.5 million went to bribes to foreign government officials, according to the DOJ and the SEC statement.

From 2000 to 2002, four Siemens subsidiaries were awarded 42 contracts with a combined value of more than $80 million with the ministries of electricity and oil in Iraq under the United Nations Oil for Food Program. Those four subsidiaries paid more than $1.7 million in kickbacks to the Iraqi government, the DOJ and the SEC said.

In addition, from September 1998 to 2007, Siemens Argentina made and caused to be made significant payments to various Argentine officials, both directly and indirectly, in exchange for favorable business treatment in connection with a $1 billion national identity card project, the statement said.

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