Suspect to stand trial in Siemens scandal

One of the main suspects in a corruption and bribery scandal that shook German engineering group Siemens will stand trial on Monday at a Munich court on charges of embezzlement.

• Reinhard Siekaczek, who worked at Siemens for almost four decades, is accused of expanding a system of funds for bribes to win contracts and setting up a network of front firms to facilitate the transfer of cash.
• The scandal, which resulted in one of the biggest bribery investigations in German corporate history and prompted the departure of the company’s chairman, Heinrich von Pierer, as well as its chief executive, has tarnished the image of a German industrial icon.
• The court, which has allotted 15 days for the trial, is expected to hear testimony from von Pierer and Thomas Ganswindt, who used to run Siemens’s telecoms business.
• Siekaczek was an executive in the company’s telecoms equipment unit COM, the division which investigators have focused on in their probe.
• Siekaczek has said he would cooperate with investigators and has already testified as a witness in a previous trial concerning the COM unit.
• In his witness statement at the time he said he was asked to set up slush funds for bribes in 1999 or 2000 and told prosecutors that he knew of bribery schemes earlier this decade in more than a dozen countries.
• Siemens, which makes everything from medical scanners and high-speed trains to wind turbines and light bulbs, is being investigated around the world on allegations that it bribed customers to win contracts. 
• The U.S. Securities and Exchange Commission is also looking into the matter. The company faces the possibility of large fines or even U.S. sanctions that could exclude it from bidding for certain contracts as a result of the SEC investigation.
• In October German prosecutors fined the conglomerate 201 million euros (160 million pounds) after tracing millions in bribes to Nigeria, Russia and Libya.
• Siemens has said it has identified 1.3 billion euros in suspicious transactions worldwide between 2000 and 2006.
• SLUSH FUND NETWORK
• The scandal first became public when German police raided Siemens’s offices in November 2006.
• The investigation quickly mushroomed, triggering high-level arrests including that of Siekaczek and the resignations of von Pierer and Chief Executive Klaus Kleinfeld last year. Neither has been accused of any wrongdoing.
• Siekaczek is accused of taking over an existing slush fund system for bribes at the end of the 1990s and expanding it with a few colleagues and the knowledge of his direct supervisor, according to the indictment.
• He is also accused of setting up a network of front companies in the Middle East, the Caribbean and the Channel Islands. Through a branched out system of slush funds and bogus consultancy contracts, millions flowed into telecommunications projects in Egypt, Saudi-Arabia, Indonesia, Vietnam and the Olympic Games in Athens, the indictment says.
• He had been aware of the fact that the company would not have tolerated the behaviour of those involved, the indictment added. 
• His direct supervisor had ensured that the division head and the executive committee had no knowledge of the bribery system, according to the indictment.
• Earlier this month prosecutors investigating suspected bribery at the engineering group said they had found no evidence to warrant criminal charges against von Pierer.
• However, he and other former company officials are being investigated for failing in their corporate supervision duties, Munich prosecutors said.