Has anyone been watching the Siemens scandal?

[Hillbilly]

Siemens has been charged with bribery and has admitted its guilt to slightly lesser charges and has been fined $1.6 billion for paying off foreign officials in order to get contracts.

Although I have not found out anything directly connected to the DR (yet), you can bet dimes to dollars that something will come to light.

Interesting that two of the countries most associated with the Dominican Republic, Venezuela and Haiti are both mentioned. "If you run with the crows????" "Tell me who you hang with and I'll tell you what you are???"
"Birds of a feather..."

This has got to get interesting.

HB

[PICHARDO]

Originally Posted by Hillbilly

Siemens has been charged with bribery and has admitted its guilt to slightly lesser charges and has been fined $1.6 billion for paying off foreign officials in order to get contracts.

Although I have not found out anything directly connected to the DR (yet), you can bet dimes to dollars that something will come to light.

Interesting that two of the countries most associated with the Dominican Republic, Venezuela and Haiti are both mentioned. "If you run with the crows????" "Tell me who you hang with and I'll tell you what you are???"
"Birds of a feather..."

This has got to get interesting.

HB

Excerpt from the SEC investigation into Siemens:

During this period, Siemens made thousands of payments to third parties in ways that obscured the purpose for, and the ultimate recipients of, the money. At least 4,283 of those payments, totaling approximately $1.4 billion, were used to bribe government officials in return for business to Siemens around the world. Among others, Siemens paid bribes on transactions to design and build metro transit lines in Venezuela; metro trains and signaling devices in China; power plants in Israel; high voltage transmission lines in China; mobile telephone networks in Bangladesh; telecommunications projects in Nigeria; national identity cards in Argentina; medical devices in Vietnam, China, and Russia; traffic control systems in Russia; refineries in Mexico; and mobile communications networks in Vietnam. Siemens also paid kickbacks to Iraqi ministries in connection with sales of power stations and equipment to Iraq under the United Nations Oil for Food Program. Siemens earned over $1.1 billion in profits on these transactions
Siemens failed to implement adequate internal controls to detect and prevent violations of the FCPA. Elaborate payment mechanisms were used to conceal the fact that bribe payments were made around the globe to obtain business. False invoices and payment documentation was created to make payments to business consultants under false business consultant agreements that identified services that were never intended to be rendered. Illicit payments were falsely recorded as expenses for management fees, consulting fees, supply contracts, room preparation fees, and commissions. Siemens inflated U.N. contracts, signed side agreements with Iraqi ministries that were not disclosed to the U.N., and recorded the ASSF payments as legitimate commissions despite U.N., U.S., and international sanctions against such payments.

In November 2006, Siemens' current management began to implement reforms to the company's internal controls. These reforms substantially reduced, but did not entirely eliminate, corrupt payments. All but $27.5 million of the corrupt payments occurred before November 15, 2006. The company conducted a massive internal investigation and implemented an amnesty program to its employees to gather information.

Furthermore:

The contracts awarded for the construction of the SD Metro were carried out via an external appointed board as agreed when the capital loans were extended. The DR only provided the exacting specs that the system was looking for and the several companies that bid on the contracts did so under the umbrella of the external board, so to provide full transparency on the contract selection and related transfer of funds. The funds were disbursed directly from the foreign LOCs and using the board's full agreement that the bidding and winning process was carried out without any kickbacks or funnels.

Siemens was already cooperating with the German gov and US SEC investigation on regards to the matter, well before the SD Metro's partial sub-system contract was awarded to them.

Regarding any kickbacks in the construction of the SD Metro, you can look within the country to know that big companies awarded the actual structures completion did somehow pass the billetes to obtain the contracts... Not a secret in the DR at all...

In fact Grupo Modesto bitted more than it could chew and gulp down, as recently it turned over the concession of several road projects back to the gov as it was having trouble keeping the "Deadline" to deliver them.

As you may well notice the DR and the USA cooperate more on so many issues than many other of the countries listed where investigations took place on the matter. The contract by Siemens with the DR was scrutinized very well by the federal agents stationed in the DR on a permanent basis.

But you have the right to your opinion on the issue and if you think the same after reading this above, well! It's your opinion after all!

[Hillbilly]

All I am saying is that if Siemens did business here, there were most probably some bribes paid to "advisers" or "consultants" as part of the process. It is too coincidental that Metro systems around the world, installed by Siemens, went this path. And, gee, so did ID card systems....and telecommunication systems...hummmm...

Okay, I am weary, as you probably are, of all of this...but it will probably come out in a few years anyway...

HB

[aegap]

Here's more, ..

United States: FCPA Watch: Siemens Agrees to Pay Record-Breaking US$800 Million For FCPA Violations


21 December 2008

Article by Sarah Streicker

Siemens AG (Siemens), Europe's largest engineering company, pleaded guilty on Monday, December 15, 2008, to violating the internal controls and book and records provisions of the Foreign Corrupt Practices Act (FCPA) and agreed to pay a $450 million fine to the Department of Justice and $350 million in disgorgement of profits to the SEC. The $800 million settlement is by far the largest penalty paid to-date in an FCPA case, dwarfing the FCPA fine of $44 million paid last year by Baker Hughes Inc.


The United States Department of Justice (DOJ) and Securities and Exchange Commission (SEC), as well as prosecutors in countries around the world, have been investigating Siemens since 2006. On Friday, December 12, the DOJ filed a criminal information1 and the SEC filed a complaint2 against Siemens in the District of Columbia. FCPA-related charges were also filed against three Siemens subsidiaries — Siemens Argentina, Siemens Bangladesh and Siemens Venezuela. According to the Siemens AG information, Siemens violated the FCPA by funding $1.36 billion in bribes to foreign officials around the world in relation to a wide range of Siemens contracts, including the United Nations oil-for-food program in Iraq, telecommunications equipment in Nigeria and Bangladesh, and medical devices in China, Russia, and Vietnam. The information alleges that Siemens made these payments from March 2001 (when Siemens AG was first listed on the New York Stock Exchange) through November 2006, during which time the company created elaborate payment schemes and off-book accounts to conceal corrupt payments and knowingly failed to implement anti-bribery compliance programs. According to the information, Siemens employees at all levels of management, including senior management, were involved in the corruption.

Moreover, according to the Sentencing Memorandum (Memorandum), also filed by US prosecutors on December 12, Siemens engaged in efforts to falsify corporate books and records and to failed to implement existing internal controls from the mid-1990's and continuing to 2007.3 Specifically, these efforts are described in the Memorandum as: (i) using off-books accounts for the corrupt payments; (ii) entering into business consulting agreements that had no legitimate business purpose and engaging former employees as purported business consultants to act as conduits for corrupt payments to government officials; (iii) drafting sham business consulting agreements to justify third-party payments and changing the name of certain purported business consulting agreements to "agency agreements" to avoid detection; (iv) creating false invoices to justify corrupt payments; (v) mischaracterizing corrupt payments as legitimate expenses in corporate accounting records and limiting the scope and quality of audits of those payments; (vi) accumulating profit reserves as liabilities in internal accounting records and then using them to make corrupt payments; (vii) making false signatures on forms authorizing payments to conceal the identity of the signors; and (viii) allowing third-party payments to be made based on a single signature in contravention of Siemens' "four eyes" policy, which required authorization of payments by two managers.

Government officials described the level of corruption at Siemens as a "pattern of bribery" that was "unprecedented in scale and geographic reach."

Guilty Pleas

On Monday, December 15, Siemens pleaded guilty to the DOJ action and settled the SEC complaint. The three Siemens subsidiaries also pleaded guilty. Pursuant to the terms of the DOJ plea agreement, Siemens will pay $450 million in criminal penalties. Without admitting or denying the SEC's allegations, Siemens has consented to the entry of a court order permanently enjoining it from future violations of Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act. Under the terms of the SEC agreement, Siemens must forfeit $350 million in tainted profits and must submit to a monitor for a period of four years to ensure FCPA compliance going forward.

Siemens also entered into an agreement on Monday, December 15 with the Munich Public Prosecutor's Office. As a part of that agreement, Siemens agreed to pay approximately $569 million, which included a fine and disgorgement of profits, based on charges of corporate failure to supervise officers and employees. DOJ and SEC officials worked closely with the Munich Public Prosecutor's Office throughout the investigation of Siemens.

The cross-border collaboration was made possible by the use of mutual legal assistance provisions of the 1997 Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Government officials have stated that the high level of cooperation between German and US officials was a key factor to bringing the systematic corruption at Siemens to light.

Details of the Internal Investigation

The government's Memorandum provides an insider's look into the internal investigation by Siemens that lead to the conclusion of the case by US government prosecutors. Siemens retained two law firms and an consulting company to help unravel more than a decade of corrupt activity across the globe. The challenges faced by these outside professionals included the privacy laws of various countries that at times impeded the flow of information to US regulatory agencies.

Siemens is credited with establishing document collection sites in Germany and China and spending more than $100 million to collect, review and process these documents. In addition, the company adopted a two-tier employee amnesty and leniency program to encourage employees to cooperate with the company's outside counsel. For all but the most senior, the program protected employees from termination and damage claims in return for voluntary disclosure of information regarding possible violations of anti-corruption laws. For those employees too senior to qualify for amnesty, as well as those employees who did not come forward during the amnesty period, the leniency program provided for individualized leniency determinations for those who cooperated with the internal investigation. More than 100 Siemens employees provided information pursuant to this program.

The government characterized Siemens' cooperation efforts in the Memorandum as "exceptional" and credited Siemens with providing substantial assistance in the investigation and with taking significant steps toward remediation. Among the remediation acts described in the Memorandum is the replacement of nearly all of Siemens' senior leadership team, including the Chief Executive Officer, the General Counsel, the Head of Internal Audit and the Chief Compliance Officer. The company also completely revamped its compliance program and polices. The compliance program now includes more than 500 compliance personnel worldwide and puts in place a new anti-corruption handbook and sophisticated web-based tools for due-diligence and compliance matters. Siemens hired an outside consulting company to assist it in implementing the program in 162 Siemens entities across the world. The cost of its remediation efforts was placed at $150 million.

In the government's view, "[t]he reorganization and remediation efforts of Siemens have been extraordinary and have set standard for multi-national companies to follow." These measures also include an outside corporate monitor who will be in place for a period of four years.

[A.Hidalgo]

Originally Posted by Hillbilly

Interesting that two of the countries most associated with the Dominican Republic, Venezuela and Haiti are both mentioned.

Anyone who thinks Siemens skipped their normal operating procedure in respect to the DR is demented.

[MikeFisher]

yeap,
and the investigation of any multinational company which made business with the mentioned countries during the last decades will bring the worldwide economy to it's final collapse, ha ha ha.
Does that mean the STD Metro been built clean?
o.k.,
it is not built, yet,
still looking where all that money went to,
but hey,
compared to China or Russia we really look clean, don't we?
Mike