Saved By The Bell In Germany?

Siemens' blitzkrieg settlement of corruption charges with German prosecutors happened without public proceedings and, so far, with very little disclosure. Apart from Siemens' statement that its tax adjustment involved "questionable payments of approximately €420 million," not much is known about the settlement and what it covers. Now, with German enforcement actions against Siemens apparently closed, some may view the moves by the Munich Office of Public Prosecution as opaque and premature.

The U.S. Department of Justice and the Securities and Exchange Commission are unlikely to consider settling Foreign Corrupt Practices Act allegations until they know the full scope of Siemens' potentially illegal conduct. The next challenge for Siemens, then, will be to convince U.S. prosecutors that the company's internal investigation, when it is finished, is accurate and complete. That might be difficult. An earlier report by the Wall Street Journal said some Siemens' managers are not cooperating with the internal investigation, and a second Journal report said Siemens' American law firm thinks the questionable payments might amount to €1.6 billion instead of the €420 million cited in the German settlement.

While U.S. prosecutors ponder their next steps, the abrupt end of the German prosecutions may cause other governments in Europe and elsewhere to wonder if they should demand full public disclosure of Siemens' questionable conduct and perhaps impose sanctions of their own.