A former midlevel executive at Siemens, he was one of several people who arranged a torrent of payments that eventually streamed to well-placed officials around the globe, from Vietnam to Venezuela and from Italy to Israel, according to interviews with Mr. Siekaczek and court records in Germany and the United States.
What is striking about Mr. Siekaczek’s and prosecutors’ accounts of those dealings, which flowed through a web of secret bank accounts and shadowy consultants, is how entrenched corruption had become at a sprawling, sophisticated corporation that externally embraced the nostrums of a transparent global marketplace built on legitimate transactions.
Mr. Siekaczek (pronounced SEE-kah-chek) says that from 2002 to 2006 he oversaw an annual bribery budget of about $40 million to $50 million at Siemens. Company managers and sales staff used the slush fund to cozy up to corrupt government officials worldwide.
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MR. SIEKACZEK’S telecommunications unit was awash in easy money. It paid $5 million in bribes to win a mobile phone contract in Bangladesh, to the son of the prime minister at the time and other senior officials, according to court documents. Mr. Siekaczek’s group also made $12.7 million in payments to senior officials in Nigeria for government contracts.
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The bribes left behind angry competitors who were shut out of contracts and local residents in poor countries who, because of rigged deals, paid too much for necessities like roads, power plants and hospitals, prosecutors said.
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The S.E.C. complaint said Siemens paid its heftiest bribes in China, Russia, Argentina, Israel and Venezuela.
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I would never have thought I’d go to jail for my company,” Mr. Siekaczek said. “Sure, we joked about it, but we thought if our actions ever came to light, we’d all go together and there would be enough people to play a game of cards.”
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“Bribery was Siemens’s business model,” said Uwe Dolata, the spokesman for the association of federal criminal investigators in Germany. “Siemens had institutionalized corruption.”
Before 1999, bribes were deductible as business expenses under the German tax code, and paying off a foreign official was not a criminal offense. In such an environment, Siemens officials subscribed to a straightforward rule in pursuing business abroad, according to one former executive. They played by local rules.
Sunday, February 08, 2009
Bribery was their Business Model
From an investigation of Siemens' business in Europe and US:
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4 comments:
A judge who declares in open court that the prosecution paid him $10,000 dollars and the defence paid him $15,000 dollars for a favourable deal. The honorable man that he is, he writes a cheque of $5000 out to the defence and declares that he shall now judge the case on its merits.
Joke apart, I am wondering how to practically consider "corruption" unlike the black-white, no pun intended, approach in Sungar films. If the grease-money does not translate to a dip in quality, would we be as incensed ? There are theories that this "if" just wishful musing and the presence of "bribery" is intrinsically inefficient and cannot be accounted as "yet another cost".
But purely philosophically is it the "consumer" in us that gets worked up (oru mazhaikku kooda thaangalaiyE) or the moralist (unakku dhaan sambaLam tharaangaLEyyA).
msp:
In this there is no dip in quality that directly impacts me. What fascinates me is how a lot of the public face of capitalism is so much at odds with their actual work practices. Take for instance the party line about how "competition promotes quality ... blah " - it's very clear that there is no real competition in cases like Siemens. The article has a para how they out competed everyone with their bribes. It's well known that 'Steak and Strippers' is how lots of software gets sold. (Online court case papers for Microsoft, EMC etc). Real competition requires active monitoring of business deals by disinterested 3rd parties, which would mean government ...
One thing I know for sure @at least in the s/w business of the business to business variety, it's mostly powered by grease. I feel like telling the people who wave telephone directory sized theoritical treatises - "Ungalaiyellam paartha sirippa varudhu"
Working for these folks knowing fully well what's going on is getting increasingly difficult. I quit my last job and there was six month gap before I started working for another guy who is morally equivalent. Most people who work for for bigger companies probably don't realise the greasiness of their companies, but it's too apparent @ smaller outfits.
I hope 2009 will help me find some answers to making a living the "clean" way.
see neenga sonna adhey deviant/criminality relation dhaan...namma alavile mudinja varaikum clean a irukaalaam..
I was talking to my friend who had worked earlier in India's most valuable business group..
ivanga theliva.. blackmoney a white aakuradhuku white a black aakuradhuku they have partnership firms, sole proprietorship concerns...
if they have like 1 Crore originally allocated for bribe budget and unaccounted.. they will split it into several 10 lakhs each.. get DD in different names, and then deposit the same in the partnership firms/proprieotship concerns.
the same will be treated as income in the partnershhip firms books..
the group will pay taxes on the owner/partners behalf..
prabhu karthik:
namma alavile mudinja varaikum clean a irukaalaam.
Adhaan Boss, it's getting increasingly difficult for me and very tricky. Namma madhiri folks working their asses off is why these guys are surviving, nammala madhiri salaried class attitude is also responsible for our plight. Most definitely I am not judging anyone or any technique for handling these greasy characters - it's just that I have caught on to this, I feel, rather late in the game. Come to think of it, it's one of those things that one needs to realise/experience first hand to realise the gravity of the situation.
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