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Ex-Manager at Siemens Is Convicted in Bribe Case
Updated:2008/7/29 14:54
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A German court convicted a former manager at the engineering and electronics company Siemens of misuse of funds on Monday in the first verdict stemming from a bribery scandal at the company. A court in Munich fined the former manager, Reinhard Siekaczek, 108,000 euros, or $170,000, and imposed a two-year suspended prison sentence after an eight-week trial in which prosecutors offered extensive testimony and documentation about a companywide system of slush funds and illicit payments. Prosecutors had requested a relatively lenient penalty because Mr. Siekaczek cooperated extensively with the investigation, they said on Friday, the final day of the trial. A midlevel manager who worked at Siemens’s telecommunications equipment division until 2004, Mr. Siekaczek oversaw a system that skimmed money out of legitimate company activities and into off-books accounts. The money was then used for bribes. The conviction is the first resulting from an investigation that became public in late 2007. A law firm hired by Siemens has since identified 1.3 billion euros in “suspicious payments” that may have been bribes to win business. Prosecutors say they are investigating more than 300 other former and current Siemens employees on suspicion of wrongdoing, and that they are still sorting through millions of documents in their inquiry. So far, prosecutors have not filed criminal indictments against any senior Siemens executive over the scandal, but neither have they ruled such indictments out. They have charged Klaus Kleinfeld, the former chief executive, and Heinrich von Pierer, the former chairman, with failing to effectively supervise the company, a minor charge that under German law could result in only a fine. Siemens itself, however, is expected to announce lawsuits Tuesday against both executives, contending that they failed to detect and clean up the network of slush funds and bribes, a person briefed on the matter said. Though common in the United States, charges against former executives in Germany are relatively rare, and appear to signal the intent of Siemens’s new chief executive, Peter Löscher, to mount an aggressive cleanup effort. Both Mr. Kleinfeld and Mr. von Pierer resigned last year as the scandal grew.
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