Legal News

Trial Begins in Siemens Bribes-for-Biz Scandal

By Dan Slater

As we noted earlier this year, Europe’s largest engineering company, Siemens, which is embroiled in what could be the largest corporate bribes-for-business case ever, hired a squad of Debevoise lawyers to help it root out its own wrong-doers from the inside.

It began to pay off yesterday when a former executive, Reinhard Siekaczek became the first company official to go on trial, possibly laying the groundwork for similar proceedings against higher-ranking managers. (Click here for the WSJ report, and here for the NYT’s.) Siekaczek, accused of helping to steer $39.1 million in bribes to potential Siemens customers in several countries earlier this decade, said yesterday that “commissions” were paid to secure orders, and acknowledged having set up slush funds. “The whole sectoral management was naturally informed that this function was carried out by me,” he told the Munich state court.

According to the NYT report, Siekaczek, 57, described how managers signed Post-it notes that had been affixed to potentially incriminating documents so that they could later peel away evidence of their imprimatur if necessary. “In this way, the signatories could elegantly remove signs of their involvement if it came to an investigation,” he said. Siekaczek’s indictment traces transactions in several countries, including Indonesia, Vietnam, Egypt and Saudi Arabia.

The payments made by Siekaczek, the only Siemens exec to be indicted after agreeing to cooperate with Munich prosecutors, reportedly represent a fraction of the €1.3 billion in suspicious transactions flagged by Siemens across its businesses since German police raided the conglomerate’s offices in late 2006.

Full post as published by Law Blog - WSJ.com on May 27, 2008 (boomark / email).