SIEMENS, the German Construction firm implicated in a large-scale international corruption scandal that included bribes to top Nigerian officials in the last presidency may have escaped serious criminal trial of its officials in the US. This follows the company’s admission that it actually paid bribes estimated at $1.4billion across Asia, Africa, Europe, Middle East and Latin America.
The German company simply agreed to pay a punitive fine of about $1.6B both to the US and European authorities. Hefty as it is, observers say considering the widespread international bribery that Siemens engaged in, the fine was a smart payoff to avert criminal and other civil suits in the US. Siemens did not question the findings of the US Security Exchange Commission, SEC, that revealed among other things that the company paid bribes to a Nigerian president and his deputy.
Sources at the US SEC maintain that the presidency in Nigeria played an active role in the bribe scandal raising concerns in diplomatic circles on why the current Nigerian government has not started any serious investigation on the matter. Previous reports had linked some former Nigerian ministers with the scandal but the outcome of the US government probe stated categorically that the topmost echelon of the federal executive was involved.
The media in the US had been focussing on the wife of a former Nigerian vice president even as fingers were pointed at the former president. No names have been mentioned so far but the dates (between 2000 and 2007) the alleged bribery was said to been committed have largely helped to limit the searchlight on the immediate past presidency in Nigeria.
According to Ken Silverstein, a US journalist who is the Washington Editor of Harper’s Magazine, “Siemens paid millions in bribes to win $130 million in telecommunications contract in Nigeria. He added that “the recipients were likely a former president and vice president of Nigeria, and the Wife of a former Nigerian vice president, a dual U.S.-Nigerian citizen who lives in the United States.”
A New York Times report noted that Siemens “telecommunications unit was awash in easy money. It paid $5 million in bribes to win a mobile phone contract in Bangladesh, to the son of the prime minister at the time and other senior officials. According to court documents….(the) group also made $12.7 million in payments to senior officials in Nigeria for government contracts.”
Curiously, in the US, Siemens has not technically paid any bribes but has been fined by the US government for paying bribes abroad and violating accounting records. There are now concerns that the Nigerian government, which made commitment to fight corruption has not brought any serious charges against the German firm beyond speculations of possible revocation of Siemens contracts. Also, government has not started any investigation of its officials implicated in the scandal.
Siemens is listed on the New York Stock Exchange, which allows the US authorities to subject the firm to the home laws. To stem further damage, the German company quickly agreed to a fine and settled the case out of court. It decided last month to pay what New York Times described as a “record total of $1.6 billion to American and European authorities to settle charges that it routinely used bribes and slush funds to secure huge public works contracts around the world.” The paper added that the fine sum “dwarfs the previous high for a foreign corruption.”
Siemens has also pleaded guilty in a federal court in Washington to civil charges that it violated a 1977 law banning the use of corrupt practices in foreign business dealings. It agreed to pay $450 million to the US Justice Department, equivalent of the Nigerian Justice Ministry and another $350 million to the Securities and Exchange Commission. By the agreements, Siemens has cleverly averted a long drawn criminal trial that will have prolonged the lifespan of the scandal and possibly sent officials of the company to jail. It also stood the risk of being delisted from the New York Stock Exchange if it had allowed the case to go all the hog.
Investigations described Siemens’ bribery schemes as “standard operating procedures for corporate executives who viewed bribery as a business strategy.” Linda Chatman Thomsen, the head of the US S.E.C.’s enforcement division, was quoted as saying the schemes were “unprecedented in scale and geographic reach.”
At home in Germany, Siemens would be paying fines totaling 395 million euros ($540 million) besides, another $290 million levied by a Munich court last year. US officials said most of the bribe transactions were carried out by middlemen posing as consultants and who delivered suitcases filled with cash to bribe foreign officials including top Nigerian government officials.