/ 27 November 2006

Siemens knew of bribery funds, newspaper alleges

The anti-corruption department at German engineering giant Siemens tried to cover up evidence of bribery accounts several years ago, the <i>Sueddeutsche Zeitung</i> newspaper alleged on Monday in a report on a deepening investigation of the company.

The anti-corruption department at German engineering giant Siemens tried to cover up evidence of bribery accounts several years ago, the Sueddeutsche Zeitung newspaper alleged on Monday in a report on a deepening investigation of the company.

The company, which has said it is cooperating with the probe by the prosecutor’s office, told the newspaper that it could not comment because the report was based on witness statements of which it had not been informed.

A spokesperson for Siemens, asked about the report by Agence France-Presse, replied: “We are not commenting while the investigation is still going on.”

The newspaper, which did not identify its sources, alleged that one of the accused in the scandal had told prosecutors that two managers of Siemens’ compliance department had tried to cover up evidence of the existence of the bank accounts back in 2002.

When it looked as if the accounts in Austrian banks might be discovered, one of the two Siemens compliance officers had said that a “different model” must be considered, the newspaper report alleged.

In the massive Siemens probe, prosecutors are investigating the alleged existence of overseas slush funds containing about €200-million ($262-million) allegedly used to pay bribes to obtain big contracts.

A total of seven current and former Siemens employees have so far been arrested in the investigation, with six still held in custody.

Press reports have even suggested that the scandal might have involved the payment of massive bribes to the regime of late Nigerian dictator Sani Abacha.

Last week, Sueddeutsche Zeitung had said that one former Siemens employee had allegedly told investigators that it was common to pay sweeteners in Africa to secure contracts.

The report said the employee was a middleman who channelled between €75-million and €100-million a year to Nigeria through bank accounts in Austria in the 1990s.

When Switzerland brought in new laws obliging banks to open their accounts to prevent payments being made to corrupt regimes such as Abacha’s, Siemens became concerned that its payments through Austria would also be uncovered, the newspaper alleged.

The company allegedly changed its approach, making the payments through a system of phantom invoices and shadow companies.

Abacha is suspected of having looted about $2,2-billion when he ruled Africa’s most populous nation from 1993 until his death in 1998.

Compliance officers are company executives responsible for ensuring that a business satisfies all laws, regulations and ethical codes. – AFP