The Securities and Exchange Commission today filed FCPA charges against seven former Siemens executives, marking the first charges against a board member of a Fortune Global 50 company, in a decade-long bribery scheme aimed at establishing and protecting a $1 billion contract to produce national identity cards for Argentine citizens.
“Our investigation reveals that there were few lines the executives were willing to cross to win the contract,” said SEC Enforcement Director Robert Khuzami in a conference call on the charges this morning, noting that Siemens executives allegedly approved up to $100 million in illegal bribes.
Recipients of those bribes allegedly included two presidents and cabinet ministers in two Argentinian administrations between 1996 to 2007. Of the funds used in the bribery scheme, approximately $31.3 million were made after March 2001, when Siemens became a U.S. issuer.
“One of the most critical functions of law enforcement is to communicate that businesses are not fools or dupes for obeying the law, we want to reward those companies that refuse to pay bribes. The best way to do that is to root out their competitors that are,” said Khuzami. “Business should flow to the company with the best product and the best price, not the best bribe. Corruption erodes public trust and the transparency of our commercial markets, and undermines corporate governance.”
Siemens, as a company, previously faced similar charges and paid $1.6 billion to resolve them with the SEC, U.S. Department of Justice and the Office of the Prosecutor General in Munich. Lanny A. Breuer, U.S. Department of Justice assistant attorney general for the DoJ’s criminal division, noted the value of Siemens’ assistance in bringing charges against the individual former executives. “It absolutely should be said that Siemens was remarkably cooperative and helpful throughout our investigation,” said Breuer. “Foreign bribery and corruption undermine fair market competition and create instability.”
The individuals charged in this case, according to an SEC press release, are:
- Uriel Sharef – A former managing board member at Siemens from July 2000 to December 2007. He met in the United States with payment intermediaries and agreed to pay $27 million in bribes to Argentine officials in connection with the DNI contract.
- Ulrich Bock – Former commercial head of major projects for Siemens Business Services (SBS) from October 1995 to 2001. As the officer responsible for the DNI contract, he authorized bribe payments to Argentine government officials.
- Stephan Signer – Replaced Bock as commercial head of major projects for SBS and later became head of business operations and finance at Siemens IT Solutions and Services. He authorized the payment of bribes to government officials in Argentina.
- Herbert Steffen – CEO of Siemens Argentina from 1983 to 1989 and again in 1991, and group president of Siemens Transportation Systems from 1996 to 2003. Due to his longstanding connections in Argentina and Latin America, Steffen was recruited by Sharef and met directly with Argentine officials and offered bribe payments on behalf of Siemens.
- Andres Truppel – CFO of Siemens Argentina from 1996 to 2002. He regularly communicated with Argentine government officials regarding illicit bribe payments and participated in U.S.-based meetings where bribes were negotiated and promised.
- Carlos Sergi – A former board member of Siemens Argentina and a business consultant for Siemens Argentina. His primary role was to serve as a payment intermediary between Siemens and Argentine government officials in connection with the DNI contract.
- Bernd Regendantz – CFO of SBS from February 2002 to 2004. He authorized two bribe payments totaling approximately $10 million on Siemens’ behalf.