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Wreckage In China From Siemens Case

A friend wrote:

Here is another sad chapter in the Siemens saga. It’s a reminder to me of the unequal enforcement (or lack thereof) between the various jurisdictions.

I wonder if the people paying the bribes thought about the death penalty when they secretly met at coffee shops . . . .

The story he sent from the Want ChinaTimes said a former senior executive with state-owned telecom company China Mobile was sentenced to death this week for taking bribes from Siemens.

The sentence included a a two-year reprieve, which in China usually means the death penalty will be converted into a long jail term.

The Higher People’s Court of Henan Province, the story said, upheld an earlier verdict on Shi Wanzhong, former general manager of China Mobile’s human resources department, for accepting a total of US$5.06 million in bribes.

Tian Qu, a middleman when Shi was head of China Mobile’s Anhui branch from 2002 to 2009, was also convicted of bribery. Tian was jailed for 15 years.

In April last year, we reported that two Siemens employees convicted by a criminal court in Germany of breach of trust and abettting bribery were let off with only probation and fines.

Michael Kutschenreuter, who headed Siemens’ telecoms group, was given probation for two years and fined €160,000. Hans-Werner Hartmann, former accounting chief at the telecoms unit, was given an 18-month suspended sentence and ordered to pay €40,000 to charity.

In December 2008, Siemens AG pleaded guilty to violating the Foreign Corrupt Practices Act, reaching settlements with the DOJ and SEC. It also resolved charges by the Munich Public Prosecutor’s Office based on its corporate failure to supervise its officers and employees.

It paid a criminal fine of $450 million in the DOJ settlement and $350 million in disgorgement of profits under its agreement with the SEC. In the German case, it paid €395 million, on top of the €201 million it had paid in October 2007 to settle a related action brought by the Munich Public Prosecutor.

A few other former Siemens executives have been convicted of bribery in Germany. They were also given suspended sentences of around two years.

Siemens’ global bribery may have topped $1.8 billion. The DOJ’s information charging the company in the biggest FCPA enforcement action ever told of more than 4,000 payments to foreign officials.

No one from Siemens has been charged in the U.S., possibly because American prosecutors haven’t been able to assert jurisdiction over them.

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