Bribes for Contracts
May 14, 2007
At the end of a trial lasting two months, the Darmstadt state court convicted the two men of embezzling more than 6 million euros ($8.1 million) to bribe employees of Italian energy concern Enel. The bribes were meant to secure gas-turbine contracts valued at 450 million euros.
A former head of the Siemens power plant unit received a two-year suspended sentence, and a consultant engineer who admitted being guilty of the charges was given a nine-month suspended sentence.
The court also ordered the embattled Siemens concern to pay 38 million euros into state coffers.
The verdicts follow similar sentences handed down by a court in Milan to two Enel employees and two other Siemens managers charged in Italy in connection with the bribery case.
The German engineering giant said in a statement that it would appeal the fine.
"We maintain that the court's order to forfeit the profits from two orders placed by Enel with Siemens' power generation division for the supply of power plant equipment in 2000 and 2001 is illegal," the statement said. "The court's decision has no basis in law or in fact."
Only the beginning?
The convictions were the first in a string of corruption scandals which have led to the resignations of Siemens chief executive Klaus Kleinfeld and chairman Heinrich von Pierer.
Siemens has been rocked by disclosure that its telecoms division paid bribes in many nations to secure big contracts outside Germany. There have also been allegations of a slush fund used to keep labor leaders docile.
One of Europe's biggest industrial groups, Siemens said it is cooperating fully with authorities.
Prosecutors searched Siemens offices in mid-November when allegations first surfaced that senior employees had siphoned off 200 million euros to pay bribes. Several managers in the firm's telecommunications division were arrested, questioned and released on bail.
Siemens' new chief executive, Gerhard Cromme, reportedly plans to revamp the company's structure in order to have a smaller management board.