At Siemens, Bribery Was Just a Line Item

At Siemens, Bribery Was Just a Line Item

By SIRI SCHUBERT and T. CHRISTIAN MILLER The New York Times December 21, 2008

MUNICH

REINHARD SIEKACZEK was half asleep in bed when his doorbell rang here early one morning two years ago.

Still in his pajamas, he peeked out his bedroom window, hurried downstairs and flung open the front door. Standing before him in the cool, crisp dark were six German police officers and a prosecutor. They held a warrant for his arrest.

At that moment, Mr. Siekaczek, a stout, graying former accountant for Siemens A.G., the German engineering giant, knew that his secret life had ended.

"I know what this is about," Mr. Siekaczek told the officers crowded around his door. "I have been expecting you."

To understand how Siemens, one of the world's biggest companies, last week ended up paying $1.6 billion in the largest fine for bribery in modern corporate history, it's worth delving into Mr. Siekaczek's unusual journey.

A former midlevel executive at Siemens, he was one of several people who arranged a torrent of payments that eventually streamed to well-placed officials around the globe, from Vietnam to Venezuela and from Italy to Israel, according to interviews with Mr. Siekaczek and court records in Germany and the United States.

What is striking about Mr. Siekaczek's and prosecutors' accounts of those dealings, which flowed through a web of secret bank accounts and shadowy consultants, is how entrenched corruption had become at a sprawling, sophisticated corporation that externally embraced the nostrums of a transparent global marketplace built on legitimate transactions.

Mr. Siekaczek (pronounced SEE-kah-chek) says that from 2002 to 2006 he oversaw an annual bribery budget of about $40 million to $50 million at Siemens. Company managers and sales staff used the slush fund to cozy up to corrupt government officials worldwide.

The payments, he says, were vital to maintaining the competitiveness of Siemens overseas, particularly in his subsidiary, which sold telecommunications equipment. "It was about keeping the business unit alive and not jeopardizing thousands of jobs overnight," he said in an interview.

Siemens is hardly the only corporate giant caught in prosecutors' cross hairs.

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Reply to
Monty Solomon
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Meanwhile, the NYTimes played the same game in NYC by "convincing" the local gov't bodies that the area a few blocks away from their old headquarters was "blighted". This led to the city and various agencies grabbing private property via "emminent domain", and handing it over to the NY Times.

Which then sold off its old headquarters location at a multi-hundred million dollar profit.

But that little trip of theirs was legal because they knew how to grease palms the right way.

In other words, before making political payoffs, make sure you know the players and the rules. Better yet, be one of the folk who helps make them.

Reply to
danny burstein

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