Siemens Pays US$1.6 Billion to Settle U.S. and German Anti-Corruption Charges
Siemens AG announced today that legal proceedings against it arising from allegations of bribing public officials were concluded on the same day in Munich, Germany and in Washington, DC and that the company will pay total fines and penalties of US$ 1.6 billion.
In Washington, DC, Siemens today pleaded guilty before Judge Richard Leon in Federal Court to charges of knowingly circumventing and failing to maintain adequate internal controls and failing to comply with the books and records provisions of the U.S. Foreign Corrupt Practices Act (FCPA). The Criminal Information (definitely worth reading) filed by the Justice Department against Siemens indicates that the Siemens was charged with one count of violating the FCPA's internal controls provisions (15 U.S.C Sections 78m(b)(2)(B), 78m(b)(5) and 78ff(a)) and one count of violating the FPCA's books and records provisions (15 U.S.C. Sections 78m(b)(2)(A), 78m(b)(5), and 78ff(a)). Siemens was not charged with violating the anti-bribery provisions of the FCPA. In related cases, three Siemens foreign subsidiaries pleaded guilty today to individual counts of conspiracy to violate the FCPA.
In connection with these pleas, Siemens and the three subsidiaries agreed to pay a fine of US$450 million to resolve charges brought by the Justice Department. At the same time, Siemens settled a civil action against it brought by the SEC for violations of the FCPA. Siemens agreed to the disgorgement of profits in the amount of US$350 million. The civil Complaint filed by the U.S. Securities and Exchange Commission (SEC) against Siemens can be found here.
In Germany, the Munich public prosecutor today announced the termination of the legal proceeding alleging the failure of the former Managing Board of Siemens AG to fulfill its supervisory duties. Siemens agreed to pay a fine of €395 million (approximately US$540 million). In a similar action in October 2007 relating to Siemens’ former telecommunications group, Siemens paid €201 million (US$275 million). This brings the total amount payable to authorities in Germany in connection with these legal proceedings to €596 million ($815 million). The investigations of former members of the Managing Board, employees of Siemens AG and other individuals is still ongoing and remains unaffected by this settlement.
Under the terms of the plea and settlement agreements reached today in the U.S., Siemens has engaged Dr. Theo Waigel, former German Finance Minister, as compliance monitor to evaluate and report on the company’s progress in implementing and operating its new compliance programs. Waigel will be the first non-U.S. national appointed to serve as a FCPA compliance monitor. As compliance monitor, Dr. Waigel will deliver regular reports to the SEC und DOJ regarding the effectiveness of the Company’s newly implemented compliance measures.
Because Siemens cooperated in the case and has implemented a comprehensive compliance program, the Defense Logistics Agency (DLA) has held that Siemens will remain a contractor for U.S. government business.
Siemens and its employees are still facing anti-corruption cases in Argentina, Austria, Bangladesh, China, Germany, Greece, Hungary, Indonesia, Israel, Italy, Malaysia, Nigeria, Norway, Poland, Russia, Switzerland and Vietnam.