Donna Boehme and Joe Murphy – Ethikos – November/December 2007
With the first major penalties of €201 million ($284 million), plus €170 million in taxes, now announced by the Munich District Court in the widely reported and still unfolding Siemens AG bribery scandal, a number of early lessons and observations emerge for compliance and ethics professionals and for other multinationals operating in today’s transparent business environment.
Siemens, one of Germany’s industrial giants, has been caught up since November 2006 in a string of widespread corruption and bribery allegations. Still recovering from the European Commission’s levy in January of its second highest fine in history – over $500 million – for European cartel activity, the company has been managing a Pandora’s box of revelations stemming from an investigation by German prosecutors into “suspicious payments” initially estimated at over $500 million allegedly used to secure foreign contracts. An internal investigation has recently uncovered up to $2.3 billion in suspicious payments, nearly fourfold the original estimate. Although the recent penalties mark the resolution of the German investigation into the company’s telecom division, German, Italian, US, Swiss and other authorities continue to investigate alleged corruption in various parts of Siemens’ decentralized business empire around the world.
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