Siemens Case Study

1. Siemens

Mrs Simone Davina elaborated in her guest lecture about the compliance program Siemens has implemented after their bribery scandal. In 2006, the German government found out that the company used to pay bribes on a regular basis. The department with the highest amount of bribes paid was the telecommunications department, they paid more than $800 million of the $1.4 billion in illegal payments that Siemens made from 2001 to 2007. One of the accountants of that department, Mr Siekaczek even said 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” (Schubert & Miller 2008). Siemens agreed to cooperate with the authorities. They hired an American law firm to be able to work with federal investigators and to conduct an internal investigation. The level of cooperation in the investigation reduced the amount of the fine Siemens received enormously. The Justice Department allowed Siemens to plead to accounting violations instead of bribery because it cooperated with the investigation and because pleading to bribery violations would have barred Siemens from bidding on government contracts in the United States. Siemens ended up paying more than$2.6 billion to clear its name: $1.6 billion in fines and more than $1 billion to the law firm for internal investigations. The internal investigation led to the realization