March 7, 2014
Siemens’ ex-managers charged with bribes
Judge Lijo accuses them of paying off Menem-era officials to win a contract to produce ID cards
Seventeen people, including former managers of the Siemens company, were yesterday accused of paying off officials in order to help win a contract to produce the national identity cards during Carlos Menem’s term in office.
The decision was made by Federal Judge Ariel Lijo, who decided to indict them for having allegedly committed bribery. He also ordered a 500-million-peso lien on their assets.
In his 300-plus-page resolution, Lijo said that Siemens managers paid more than 106 million dollars to middlemen on behalf of Menem’s administration who were taking part in the bidding process. So far, no Menem-era official has been indicted in the case.
According to Lijo, “systematic behaviour from the members of Siemens company of paying bribes so that the company’s Argentine subsidiary could benefit with the production of the ID cards” has been proven.
“A system was implemented to justify multi-million expenses from Siemens company and its subsidiaries,” the magistrate wrote in his resolution, which was yesterday disseminated by the Judicial Information Centre (CIJ) website.
Minutes after the resolution was known, managers from the firm reminded that none of the indicted former managers are currently part of the company and said that the German-based company “has always helped the judge and provided all the requested information.”
Lijo said he had evidence of an economic agreement between Siemens and the SOCMA economic group to benefit Siemens in the bidding process. The agreement included purchasing one of SOCMA’s companies at a higher price than its true value and also by including Correo Argentino in the distribution of the ID cards. SOCMA is the group headed by Franco Macri, Buenos Aires City Mayor Mauricio Macri’s father.
On February 19, 1998, then president Carlos Menem signed Decree No. 1342, awarding Siemens IT Services SA, a subsidiary of the multinational company, the production of the ID cards and passports for the following six years. A 600-million-dollar contract was then agreed, which was then doubled to 1.2 billion. In its bid proposal, the company promised to produce ID cards at a cost of 30 pesos each.
The contract raised suspicions from the beginning, which is why several investigations were started to find out if the agreement had been transparent enough.
In December, 2008, Siemens and its subsidiary in Argentina pleaded guilty to criminal violations of the US Foreign Corrupt Practices Act and paid US$449 million in fines over the same national identity card contract. In a brief written that year, the company devoted a whole article to its practices in Argentina, acknowledging the offences that Lijo was investigating. Although the enterprise did not divulge the names of the officials who accepted the bribes, that year the German press published a list of initials and the money allegedly received.
Former president Menem and his Interior Minister Carlos Corach were in the spotlight as well as former Immigration Office head Hugo Franco.
Two years ago, US prosecutors charged eight former Siemens AG executives with paying 100 million pesos in bribes in the country. The charges were filed in US District Court in Manhattan and the former managers were accused of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) anti-fraud statute, as well as wire fraud and money-laundering, crimes which carry a possible maximum prison term of 25 years.
Following a scandal, the Alliance government headed by then president Fernando de la Rúa rescinded the contract in 2000.
Twelve people working for Siemens were included in the indictment: Uriel Jonathan Sharef, Ulrich Albert Otto Fritz Bock, Eberhard George Reichert, Luis Rodolfo Schirado, Andrés Ricardo Truppel, Ernst Michael Brechtel, Bernd Regendatz, Ralph Matthias Kleinhempel and José Alberto Ares. Sharef, for instance, was a member of Siemens’ managing board. He also was the first former board member of a Fortune Global 50 company to be indicted under the US Foreign Corrupt Practices Act, as happened in 2011.
Judge Lijo also charged Carlos Francisco Soriano, Miguel Ángel Czysch and José Antonio David as “middlemen” between the company and Menem’s administration to arrange the payment for benefitting the company in the bid.
The magistrate also accused Antonio Justo Solsona, Guillermo Andrés Romero, Orlando Salvestrini, Luis Guillermo Cudmani and Federico Rossi Beguy, who allegedly worked for the company competing in the bid against Siemens IT Services and who presumably agreed not to challenge the government’s decision.
It was not clear yet when the case would reach the court.
Herald with Reuters, Online Media