Search

Editors

Richard L. Cassin Publisher and Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Elizabeth K. Spahn Editor Emeritus

Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

Aarti Maharaj Contributing Editor


FCPA Blog Daily News

Entries in Germany (104)

Monday
Jun112012

HP's FCPA Disclosure

Palo Alto-based Hewlett Packard Company's latest Form 10-Q filed with the SEC on June 8 contained this FCPA disclosure:

Click to read more ...

Friday
Mar022012

Foreign Enforcement Notes: Ferrostaal and Alstom

Miller and Chevalier's FCPA Winter Review 2012 noted a couple of significant enforcement actions in Europe in late 2011.

Click to read more ...

Monday
Nov212011

SFO Targets F1 Supremo Ecclestone

he U.K. Serious Fraud Office may investigate bribery allegations against Formula One boss Bernie Ecclestone, according to reports from Reuters and others.

Click to read more ...

Tuesday
Nov082011

Does Graft Predict Debt Woes?

This may be cheap science. But take a look at the seventeen Eurozone countries according to their rank on the 2010 corruption perception index.

Click to read more ...

Wednesday
Nov022011

BRIC Companies Rank Low On New TI Index

Transparency International yesterday released its 2011 Bribe Payers Index.

Click to read more ...

Tuesday
Dec212010

H-P, Mark Hurd And The FCPA

Will investigations into H-P's former CEO's domestic conduct converge with ongoing probes into the company's overseas sales practices?

Click to read more ...

Tuesday
Dec142010

Croatia's Clean-Up

Croatia's former prime minister faces a corruption investigation. Earlier this year, Daimler admitted paying about $6 million in bribes to sell fire trucks there.

Click to read more ...

Tuesday
Nov022010

Fit To Lead?

On the new CPI, America landed just ahead of Uruguay, France, and Estonia -- a neighborhood not well known for iron-fisted compliance. What's that mean for FCPA enforcement?

Click to read more ...

Monday
Oct042010

Someone Tell The Lawyers

About half of the world's lawyers haven't heard of the FCPA. Seventy percent are unaware of the U.K. Bribery Act, and four in ten don't know about the OECD and U.N. anti-corruption conventions.

Click to read more ...

Monday
Sep272010

Former Fugitive Now Waits And Hopes 

What's life like for Ousama Naaman? He's scheduled to be sentenced in December and faces up to ten years in prison. But he hopes to serve his time in a Canadian jail.

Click to read more ...

Monday
Aug302010

Siemens' Second Chance

During its billion-dollar internal investigation, Siemens discovered and documented 4,283 illegal payments related to 332 projects around the world. The total value of bribes paid was at least $1.4 billion, resulting in fines and penalties in the U.S. and Germany of about $1.6 billion.

That was 2008. What has Siemens done since then about compliance?

In FY2007, it had 173 compliance staff worldwide. By FY2009, the number had grown to 598. It has now given in-person compliance training to 1,400 senior managers, 80,000 employees with "sensitive functions," and 220 compliance officers. Another 140,000 employees have completed on-line compliance training (the company has about 400,000 employees). In FY2009, Siemens fired 244 employees for compliance breaches and disciplined another 473.

A few years ago, Siemens could have received a corporate death sentence. Its crimes were that bad. And its compliance program, if you could call it that, had been subverted. But instead of a death sentence, there was that rather painless settlement with U.S. and German authorities. Some complained that justice wasn't served.

A year before the settlement, however, new CEO Peter Löscher had said: Siemens endorses clean business. Period. I am not interested in deals that can only be had through corruption.

Compliance first, profit second, he said. People believed him. So the company got a second chance and made it count.

As Peter von Blomberg, the deputy chairman of Transparency International Germany, recently said: "The case of Siemens shows that companies can be successful without corruption. Even with a compliance monitor appointed by the U.S. authorities, a much larger compliance organization, and scrutiny of every transaction,  CEO Löscher just announced the best quarterly results ever."

That's why we like second chances.

*     *     *

We're grateful to i-Sight for its post about the recovery of Siemens, which included a company-prepared presentation about current compliance efforts.

Tuesday
Aug242010

A Shocking Confession

German police last Thursday raided a global pipeline-equipment supplier on suspicion of bribing foreign officials to win work.

The raid came two weeks after Eginhard Vietz, 69, the owner and managing director of Hanover-based Vietz GmbH, gave an interview to the German business newspaper Handelsblatt. Vietz told the paper his company and its competitors pay bribes in Africa, the Middle East, and Asia as a standard business practice.

Vietz GmbH supplies welding, bending, and testing gear for onshore and offshore oil and gas pipelines to customers world wide.

Mr. Vietz said his company regularly paid bribes "because there are certain countries where there is no other way to do it."

"Nobody is disadvantaged by what I am doing," he said, explaining he was only trying to keep his workers busy.

The Hanover prosecutor, Manfred Knothe, told the German Press Agency (DPA) that police raided the company's head office in Hanover and plants in Leipzig and Essen, seizing computers and files.

Knothe told DPA that "Vietz's description of the kickbacks had been so detailed that prosecutors had no choice but to investigate him on suspicion of corrupting others, an offence punishable by up to 5 years in prison."

Overseas bribery is sensitive in Germany. Since 2007, prosecutors have charged leading firms Siemens, Daimler, and MAN. Siemens and Daimler also faced FCPA enforcement actions in the U.S.

The Handelsblatt newspaper quoted Vietz as saying, "I don't feel I did anything wrong. You can't change the way the world is."

Last year, according to German press reports, Vietz accompanied Germany's economics minister on a trip to Abu Dhabi and Saudi Arabia. This year, he visited the United Arab Emirates as part of a delegation with state premier Christian Wulff, who's now Germany's president.

*   *    *

In the Handelsblatt interview, Eginhard Vietz said among other things that he'd paid bribes repeatedly. In countries such as Algeria, Egypt, and Nigeria, he said it's not easy to do business without bribery. "The same goes for Russia," Vietz said.

Asked about anti-corruption laws in the countries where he does business, he said China even has the death penalty for bribery. "Nevertheless, I have experienced myself that I could only win contracts through bribes. And I also have lost contracts because a competitor paid more."

Vietz said most of the people deciding who wins state contracts are poorly paid and easily bribed. "They're only human," he said. He usually bribes the senior management in purchasing departments -- the people who make the buying decisions. "They are mostly civil servants we are dealing with in these countries, mainly at state firms."

The payments are usually funded by inflating commissions to sales agents, he said, with the money then transferred to accounts in Switzerland and then passed on as bribes. The amounts are usually between 5% and 10% of the total contract value. He said those amounts are added to the prices he charges the customers, so his margins aren't reduced. He said he's always careful in structuring the payments to comply with German tax laws.

U.S. companies, he said, claim to be particularly clean but are actually the worst. The SEC, he said, uses its authority to prosecute foreign competitors, while U.S. companies make themselves world leaders with government protection. Asked for an example, he said three years ago in Moscow, while bidding for a big contract, he knew he was 40% below the offer of his American competitors. "Suddenly, the American ambassador spoke to the customer. I did not get the job."

Handelsblatt pointed out that since Siemens stopped paying bribes, it hasn't lost work or shed jobs because of compliance. Vietz replied, "I can't speak for Siemens. Maybe a large corporation has other possibilities. But I doubt that anyone can build large plants in countries such as Nigeria without making specific contributions."

*     *     *

Special thanks to a reader for sending the link to the August 10, 2010 Handelsblatt interview with Eginhard Vietz. It can be viewed here.