SIEMENS EXECUTIVE ADMITS PAYING MILLIONS IN BRIBES

A former executive at German engineering giant Siemens has pleaded guilty to conspiring to pay tens of millions of dollars in bribes to officials in Argentina.

Eberhard Reichert’s admission of guilt before a federal judge in New York is the latest twist in the US’ pursuit of the company and its executives regarding a campaign of corruption that spanned the globe during the 1990’s.

Reichert, 78, of Germany, pleaded guilty to wire fraud and conspiracy to violate the US’ Foreign Corrupt Practices Act; which makes it an offence to bribe foreign government officials to win business. He has yet to be sentenced.

In a landmark case in 2008, Siemens settled with US and German officials; pleading guilty to paying bribes in more than 20 countries and paying a $1.6 billion settlement. Reichert was one of nine individuals charged in the US for their roles in the bribery scheme.

While the size of the sums involved in the case show the extent of the bribery that Siemens used to secure contracts, the fact that its employees are still being prosecuted for it 20 years later indicates the determination with which the authorities are now tackling bribery.

The fact that Siemens reached a settlement with the authorities while its employees still face prosecution as individuals indicates the need for anyone suspected of involvement in bribery to seek their own legal advice.

The split between corporate and individual liability can mean that companies are able to negotiate a settlement that sees them escape criminal prosecution while the individual does not have that opportunity.

As a UK example, Tesco agreed to pay a huge fine and meet certain conditions to avoid prosecution over its misreporting of profits. Three of its executives, however, are due to go on trial on charges of fraud and false accounting.

Individuals, therefore, have to take steps to protect their own interests, regardless of the legal situation the company finds itself in.

Read our article: CORPORATE LIABILITY AND THE INDIVIDUAL