This article originally appeared on Professor Koehler’s FCPA Professor website (www.fcpaprofessor.com) and is reprinted with his permission.
Today is the two year anniversary of the Siemens FCPA enforcement action, the largest ever in terms of fines and penalties – $800 million in the U.S. For last year’s post on the one year anniversary see here.
This post discusses recent Siemens related news.
First, a recent Spiegel Online article about continued U.S. interest in individual prosecutions.
Second, and on a much different topic, Siemens’ recent funding of various anti-corruption programs and initiatives pursuant to its World Bank settlement.
It probably is not the best time to be a former Siemens employee or executive somehow connected with the conduct at issue in 2008 FCPA enforcement action – the largest ever in terms of fines and penalties. Among other things, a November 30th Congressional hearing (here) was devoted (at least in part) to the issue of why no Siemens employees or executives have been charged in connection with the FCPA enforcement action (see here and here),
On this issue, Spiegel Online (here) is reporting that “US authorities are now investigating” former Siemens CEO Heinrich von Pierer, and “other top managers” in connection with the bribery scandal.
The December 9th article states that “a few weeks ago, officials with the U.S. Justice Department and the Securities and Exchange Commission questioned the current supervisory board chairman, Gerhard Cromme, as well as former auditors from the era of large-scale corruption.” According to the article, U.S. investigators “were due to return to Germany this week.”
Spiegel reports that U.S. investigators are specifically interested in “Pierer and Uriel Sharef, the former head of the power plant division, who was also in charge of the company’s South American business” and “Siemens projects in Argentina, Venezuela and Colombia.”
The Siemens enforcement action did include related enforcement actions against Siemens S.A. (Argentina) and Siemens S.A. (Venezuela).
In the Argentina matter (here), the DOJ alleged that Siemens entities made over $31 million in corrupt payments in exchange for favorable business treatment in connection with various government infrastructure projects, including a national identity card project, in Argentina.
In the Venezuela matter (here), the DOJ alleged that Siemens entities made over $18 million in corrupt payments in exchange for favorable business treatment in connection with two major mass transit projects in Venezuela.
The Spiegel article documents Senator Arlen Specter’s May 2010 exchange with Assistant Attorney General Lanny Breuer about the Siemens matter (see here), but does not mention the above referenced Congressional chaired by Senator Specter.
Doing Good, After Doing Bad
In July 2009, after resolution of the U.S. FCPA enforcement action, Siemens and the World Bank agreed to a settlement (seehere) in connection with “corruption in a project in Russia involving a Siemens subsidiary.” The settlement included “a commitment by Siemens to pay $100 million over the next 15 years to support anti-corruption work.”
Last week, Siemens announced (here) the first wave of funding. As noted in the release, $40 million will be distributed to more than 30 initiatives in over 20 countries. (For a list of projects see here).
The release states as follows:
“Projects that will be supported by this initial tranche include assisting the Brazilian organization Instituto Ethos in ensuring the transparent award of the infrastructure contracts for the Football World Cup 2014 and the Olympic Games 2016 in Brazil. In Europe, the newly founded International Anti-Corruption Academy is receiving funding for research and teaching. This Vienna-based international organization was set up to train anti-corruption experts from all over the world.
Other initiatives will be supported in the following countries: Angola, Brazil, China, Egypt, Hungary, India, Indonesia, Italy, Mexico, Nigeria, the Philippines, Russia, the Slovak Republic, South Africa, the Czech Republic, the U.S. and Vietnam and various Middle Eastern states.”