No Jail For Convicted Siemens Execs
Wednesday, April 21, 2010 at 8:15AM
Richard L. Cassin in Charles Jumet, Germany, Siemens

Two former senior managers from Siemens who were central actors in the company's global bribery scandal were convicted by a criminal court in Germany Tuesday but let off with only probation and fines.

Michael Kutschenreuter and Hans-Werner Hartmann, both 55, were found guilty in a Munich court of breach of trust and abetting bribery.

Kutschenreuter, who headed Siemens' telecoms group, was given probation for two years and fined €160,000. Hartmann, former accounting chief at the telecoms unit, was given an 18-month suspended sentence and ordered to pay €40,000 to charity.

In December 2008, Siemens AG pleaded guilty in the United States to violating the Foreign Corrupt Practices Act, reaching settlements with the Department of Justice and the Securities and Exchange Commission. At the same time, the company resolved charges by the Munich Public Prosecutor’s Office based on its corporate failure to supervise its officers and employees.

It paid 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 paid €395 million, on top of the €201 million it had paid in October 2007 to settle a related action brought by the Munich Public Prosecutor.

Siemens has said its global bribery may have topped $1.8 billion. The Justice Department's information charging the company in the biggest FCPA enforcement action ever tells of more than 4,000 payments to foreign officials to obtain or retain business -- and systematic and intentional violations of the FCPA's internal controls and books and records provisions.

According to the U.S. charging documents, Siemens' telecoms unit paid bribes of $5.3 million in Bangladesh and $4.5 million in Nigeria.

At least three other former Siemens executives have been convicted of bribery over the past few years. They were also given suspended sentences of around two years.

No one from the company has been charged in the U.S., possibly because American prosecutors haven't been able to assert jurisdiction over them. This week's convictions of Kutschenreuter and Hartmann may have been the final criminal trials in Germany of Siemens' personnel involved in the company's massive global bribery.

The German defendants' light treatment in their home courts contrasts sharply with this week's U.S. sentencing of American Charles Paul Edward Jumet. He was given 87 months in prison -- the longest sentence ever for FCPA-related offenses.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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