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Harry Cassin
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FCC fines Siemens for failing to disclose FCPA and obstruction convictions

The Federal Communications Commission fined Siemens Corporation and Siemens Medical Solutions $175,000 Thursday for failing to disclose corporate felony convictions as required by the FCC’s rules.

Several Siemens companies hold FCC wireless licenses and were required to disclose on their applications prior criminal convictions for violations of the Foreign Corrupt Practices Act and, separately, obstruction of justice.

The FCC charged Siemens Corporation and Siemens Medical in an administrative order and didn’t go to court.

Siemens Corporation is a Delaware company and a wholly-owned subsidiary of Germany-based Siemens AG.

In December 2008, Siemens AG paid $450 million in criminal fines to the DOJ and disgorged $350 million to the SEC for violating the Foreign Corrupt Practices Act.

As part of that enforcement action, Siemens AG pleaded guilty to two criminal counts of violating the internal controls and books and records provisions of the FCPA.

Three Siemens AG subsidiaries in Argentina, Bangladesh, and Venezuela each pleaded guilty to one count of conspiracy to violate the antibribery and books and records provisions of the FCPA.

Separately, in 2007, Siemens Medical — a Delaware company ultimately owned 100 percent by Siemens AG — pleaded guilty to a federal charge of obstruction of justice. It paid a $1 million fine and $1.5 million in restitution.

In that case, Siemens Medical admitted it lied to Cook County (Illinois) officials to win a $49 million hospital contract in 2000, and lied again in a civil court action to cover it up.

Siemens Medical told Cook County officials it was setting up a joint venture with a minority business to provide radiology equipment to a local hospital. But the joint venture was a sham deal and the minority business wasn’t a true partner.

Under FCC rules, wireless license holders and some of their subsidiaries are required to disclose any felony convictions in their license applications.

Siemens Corporation and Siemens Medical “failed to meet their statutory and regulatory obligation to timely disclose” felony convictions on applications filed between 2007 and mid-2015, the FCC said.

“A felony conviction is a serious offense that the Commission considers when deciding whether a company is fit to hold a license or other authorization,” the FCC’s Travis LeBlanc said.

“It is our duty to ensure that any person or company that fails to submit candid, complete, and accurate information about their background — criminal or otherwise — will be held accountable,” he said.

In addition to paying the $175,000 fine, Siemens Corporation and Siemens Medical agreed Thursday to “adopt a compliance plan to prevent future failures to disclose the felonies at issue or any other material factual information in future [FCC] license applications.”

The companies must also designate “a senior manager as a compliance officer, develop a comprehensive training program, and report to the [FCC] regularly on compliance,” the agency said.

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The Federal Communications Commission’s order and the consent decree In the Matter of Siemens Corporation et al released September 22, 2016 are here (pdf).


Richard L. Cassin is the publisher and editor of the FCPA Blog. He’ll be the keynote speaker at the FCPA Blog NYC Conference 2016.

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