Search

Editors

Richard L. Cassin Publisher and Editor

Julie DiMauro Executive Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Michael Scher
Senior Editor

Elizabeth K. Spahn Contributing Editor

Eric Carlson Contributing Editor

Michael Kuria Contributing Editor

Thomas Fox Contributing Editor

Philip Fitzgerald Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Connect

Subscribe to receive the free FCPA Blog daily

Close
FCPA Blog Daily News

« Was Justice Served? | Main | Siemens: Systematic Global Corruption »
Monday
Dec152008

Final Settlements For Siemens

As expected, Siemens AG pleaded guilty Monday to violating the internal controls and books and records provisions of the Foreign Corrupt Practices Act, reaching settlements with the U.S. Department of Justice and the Securities and Exchange Commission. Also on Monday, Siemens resolved charges by the Munich Public Prosecutor’s Office based on its corporate failure to supervise its officers and employees.

It will pay a criminal fine of $450 million in the DOJ settlement and $350 million in disgorgement of profits under its agreement with the SEC. In the German case, it will pay €395 million (about $569 million), on top of the €201 million it paid in October 2007 to settle a related action brought by the Munich Public Prosecutor.

In Monday's hearing in Washington, D.C. before U.S. District Judge Richard J. Leon, the German industrial giant pleaded guilty to one count each of violating the FCPA's internal controls and books and records provisions. Its Argentina subsidiary also pleaded guilty to conspiracy to violate the books and records provisions of the FCPA, and its Bangladesh and Venezuela subsidiaries pleaded guilty to conspiracy to violate the anti-bribery and books and records provisions.

The U.S. dispositions require appointment of a compliance monitor for four years. Siemens has already named Theo Weigel, a lawyer who served in the German Parliament and as the country's finance minister.

In a sign that U.S. prosecutions of individuals tied to the case may follow, the DOJ said Siemens "also agreed to continue fully cooperating with the Department in ongoing investigations of corrupt payments by company employees and agents."

At a press conference after Monday's hearing, Matthew Friedrich, the Acting Assistant Attorney General at the DOJ's Criminal Division, said the Justice Department "in recent years significantly increased its FCPA enforcement. From 2001 to 2004, the Department resolved or charged 17 FCPA cases. For the period of 2005 to 2008, that number is 42 resolutions, representing an increase of more than 200 percent within these four years as compared to the prior four-year period."

What's potentially even more significant, he said, is that fighting public corruption has gone global:

Through international instruments like the OECD convention and the U.N. convention against corruption, we have seen our international partners significantly step up their anti-corruption efforts. Everything we're seeing suggests that this trend will continue. South Africa, for example, became the 37th country and the first African nation to become a party to the OECD convention in 2007. Israel followed suit in September of this year, becoming the 38th signatory.
And on the nature of graft and why the fight against it is important, he said:
For let there be no doubt that corruption is not a victimless offense. Corruption is not a gentlemen's agreement where no one gets hurt. People do get hurt. And the people who are hurt the worst are often residents of the poorest countries on the face of the earth, especially where it occurs in the context of government infrastructure projects, contracts in which crucial development decisions are made, in which a country will live by those decisions for good or for bad for years down the road, and where those decisions are made using precious and scarce national resources.
_____________

View a copy of the DOJ's Dec. 15, 2008 release here.

Download a copy of the DOJ's Dec. 15, 2008 plea offer here.

View a transcript of the DOJ's Dec. 15, 2008 press conference here.

Download the DOJ's charging documents, sentencing memo and joint statement at the bottom of our prior post here.

View the SEC's Litigation Release No. 20829 (December 15, 2008) and Accounting and Auditing Enforcement Release No. 2911 (December 15, 2008) in Securities and Exchange Commission v. Siemens Aktiengesellschaft, Civil Action No. 08 CV 02167 (D.D.C.) here.

Download the SEC's complaint against Siemens here.

.

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
All HTML will be escaped. Hyperlinks will be created for URLs automatically.