Germany's Old Boys' Club Gets a Rude Awakening ; the Siemens Bribery Scandal Raises Fears of More Corporate Corruption
Murray-Watson, Andrew, The Independent on Sunday (London, England)
BAE Systems has been hauled over the coals for allegedly paying a few million quid in bribes to Saudi officials in exchange for huge defence contracts. The Serious Fraud Office closed its investigation into the matter earlier this year, but the case smoulders on, with US investigators reported to be close to opening their own probe.
But over in Germany, a much larger corporate scandal is brewing. Two former managers at Siemens, the giant engineering conglomerate, were given suspended sentences on Monday for paying bribes totalling [euro]6m ([pound]4m) to secure power-plant contracts in Italy.
For Siemens, this is the tip of the iceberg. So far, the company has stated that it has uncovered [euro]426m in suspicious payments that might have been bribes, and has already indicated that an internal investigation is likely to find additional dodgy-looking transactions. Klaus Kleinfeld, Siemens's chief executive and Heinrich von Pierer, its chairman, have already resigned in the wake of the scandal.
Siemens is a huge company with 65 units in 190 countries. But the scale and tortuosity of the suspicious payments are still staggering.
The stench of corruption at Siemens will mean Germany never again enjoys a spotless corporate reputation. But will the saga end at the doors of Siemens' plush Munich offices? Members of the German business elite enjoy a cosy existence. Top executives sit on numerous boards. Mr von Pierer, for example, sits on the advisory boards of two other German household corporate names and is also an adviser to Chancellor Angela Merkel. He is, sorry was, one of the most respected businessmen in Germany. Of course, I am not suggesting that he knew anything directly about suspicious payments being made at Siemens.
But the interlocking nature of German corporate governance reduces the chances that Siemens is the sole rotten apple in the barrel. …