DOJ Announces Bribery Charges Against Siemens Executives

The Department of Justice (“DOJ”) announced in a press release last week that it was bringing charges against eight former executives and agents of Siemens AG and its subsidiaries for allegedly engaging in a decade-long scheme to bribe senior Argentine government officials to secure, implement and enforce a $1 billion contract with the Argentine government to produce national identity cards.  According to the press release, the indictment charges the defendants and their co-conspirators with conspiracy to violate the Foreign Corrupt Practices Act (“FCPA”) and the wire fraud statute, money laundering conspiracy and wire fraud.

In announcing that charges had been brought against the eight former executives and agents of Siemens AG, Assistant Attorney General Lanny Breuer condemned the behavior stating: “Today’s indictment alleges a shocking level of deception and corruption.”  According to Breuer, “The indictment charges Siemens executives, along with agents and conduits for the company, with committing to pay more than $100 million in bribes to high-level Argentine officials to win a $1 billion contract.  Business should be won or lost on the merits of a company’s products and services, not the amount of bribes paid to government officials.  This indictment reflects our commitment to holding individuals, as well as companies, accountable for violations of the FCPA.”

The Foreign Corrupt Practices Act of 1977 was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.  The charges brought on December 12 come just three years after Siemens paid out the largest FCPA fine ever, $450 million, to the DOJ and the Securities and Exchange Commission (“SEC”) to settle related FCPA charges.  “The charges, along with Siemens’ 2008 settlement with government agencies, serve as a reminder of the immensity of some of the FCPA enforcement actions that can be the subject of a whistleblower tip to the SEC,” said David J. Marshall of Katz, Marshall & Banks, a whistleblower law firm located in Washington, DC.  “Whistleblowers in these cases can earn a monetary award of ten percent to thirty percent of whatever penalty or settlement the DOJ or SEC manages to procure – a fantastic incentive for people to speak out against the corrupt practices of their company.”