PDP Chairman In € 700,000 Bribery Scandal

Scandal-scarred Siemens AG paid millions of euros in bribes to cabinet ministers and dozens of other officials in Nigeria, Russia and Libya as it sought to win lucrative contracts for telecommunications equipment, according to a court ruling that depicts a pattern of bribery by one manager.

The document, viewed by Street Journal, offers the most detailed picture to date of the scandal that has ensnared one of the world’s biggest conglomerates in investigations across the globe.

The ruling by a Munich court named the current Acting Chairman of the Nigeria’s ruling party, three former Nigerian telecommunications ministers as well as other officials in Nigeria, Libya and Russia as recipients of 77 bribes totaling about €12 million, or about $17.5 million. Siemens accepted responsibility for the misconduct and agreed to pay a €201 million fine decreed by the court, but it has declined to identify those named as bribe givers and takers in the ruling’s text, which was not disclosed.

The court focused on bribes between 2001 and 2004 connected to Reinhard Siekaczek, a former manager in a telecommunications-equipment unit who spent 38 years at Siemens. Mr. Siekaczek has been indicted on embezzlement charges in the Munich court, and his lawyer said he is cooperating with prosecutors in their investigation of bribes at Siemens.

Mr. Siekaczek has told prosecutors that he knows about bribes beyond the three countries that were made with the knowledge of senior managers, according to separate court records. That testimony could serve as a springboard for other criminal investigations and additional fines in countries where Siemens is active, including the U.S.

Siemens, Europe’s largest engineering company with revenue last year of €72 billion, manufactures everything from light bulbs to high-speed trains. When they carried out a dramatic raid on Siemens headquarters about four years ago, German police focused on just €20 million in alleged fraud. The investigation quickly mushroomed into one of the continent’s biggest bribery cases, triggering high-level arrests including Mr. Siekaczek and the resignations of the chairman and chief executive the following year.

Siemens is still being investigated on several continents. The company said last week it has identified €1.3 billion in suspicious transactions world-wide between 2000 and 2006.

The Munich court ruling lists bribes from €2,000 to €2.25 million steered by Mr. Siekaczek and colleagues to dozens of government officials in the three countries. It says most of the money, about €10 million, went to Nigerians, including an immigration official, a senator and four former telecommunications ministers: Bello Mohammed, Tajudeen Olanrewaju, Cornelius Adebayo and Alhaji Aruna Elewi.

An official at Nigeria’s Information and Communications Ministry said the government needed to look into the allegations before commenting. The former ministers couldn’t be located for comment.

Siemens has sold telecommunications equipment in Nigeria, but the ruling did not specify what contracts Siemens was seeking when its employees paid bribes. It also did no’t say what, if anything, the recipients of Siemens’s money did in exchange for it.

The three-judge panel said its ruling was based on information from interviews with Siemens employees and extensive files of documents. Many of those documents were seized in the Nov. 15, 2006, police raids of Siemens offices in Germany.

Anton Winkler, a spokesman for the prosecutors in Munich, said prosecutors have not interviewed those who were named in the court ruling as bribe takers. The prosecutors are not pursuing action against these people because German courts do not usually have jurisdiction if a non-German receives a bribe outside of Germany.

Mr. Winkler declined to discuss the precise nature of the evidence, but said, “The names and other information in the decision were carefully checked for accuracy.”

In Russia, according to the court findings, 38 bribes totaling about €2 million were funneled to senior managers at nearly two dozen regional state-controlled phone companies stretching from Petrozavodsk in the west to Vladivostok in the east. The ruling also listed six bribes totaling about €300,000 to two officials at Libya’s state-run General Post and Telecommunications Co. The two officials named are Ramadan Negita, a general manager at the company, and E. Swei Emhemmed Jamel, a project manager.

The Libyan company did not respond to written questions, and the two managers could not be located. A spokesman for OAO Svyazinvest, the state-controlled parent company of Russia’s regional telecommunications companies, said it won’t comment on a ruling it has not seen.

In some cases, according to the Munich court, bribes were funneled by Mr. Siekaczek to government officials through outside consulting firms. In other cases, Mr. Siekaczek directed the money from company headquarters to other Siemens officials who acted as intermediaries. Sometimes bribes were deposited in recipients’ bank accounts. At other times, the recipients were handed cash.

According to Siemens, many of the €1.3 billion in dubious transactions it has identified lie outside the telecom unit where Mr. Siekaczek was employed. Debevoise & Plimpton LLP, the U.S. law firm hired by Siemens to investigate wrongdoing at the company, flagged 65 countries for scrutiny.

Mr. Siekaczek oversaw sales at a branch of Siemens’s telecom unit earlier this decade, eventually helping oversee 15,000 employees and €4 billion in annual sales. As a Munich-based director, he reported to the unit’s management board, which in turn reported to Siemens’s central executive board. Mr. Siekaczek left his full-time position at Siemens in November 2004, but was retained by the company for several more months as a paid consultant, according to court records. Siemens declined to say why Mr. Siekaczek left.

According to the Munich court ruling, Eduard Seidel, who headed Siemens’s operations in Nigeria earlier this decade, helped deliver many of the bribes to final recipients. The court also said Klaus-Peter Gilbert, Mr. Seidel’s successor, helped deliver bribes in Libya. Mr. Gilbert and Reinhart Stiglmayr, Siemens’s finance chief in Nigeria, were arrested in 2007 by German authorities and then released.

A Siemens spokesman in Munich said Mr. Seidel was no longer with the company. He said Mr. Gilbert is no longer the chief executive in Nigeria, but declined to say whether he remained with the company. Mr. Stiglmayr, listed as one of 11 witnesses in the Munich ruling, has retained his position.

Siemens in Germany and Nigeria declined to make any of the individuals available for comment and they couldn’t be located independently.

Mr. Siekaczek was particularly active in 2003, according to the Munich court ruling. In February, with the help of Mr. Gilbert, an executive in Munich at the time, he steered €153,370 to Mr. Negita, the senior official at Libya’s GPTC, it says. Smaller follow-up payments were made to the official in August and October, according to the court findings.

In August of the same year, according to the court, Mr. Siekaczek and Mr. Seidel funneled a €150,000 bribe to Mr. Mohammed, following a €550,000 payment the year before, when he was still the Nigerian telecommunications minister.

The Munich court estimated that the roughly €12 million in bribes in Nigeria, Russia and Libya produced at least €200 million in “unlawful economic advantages” for Siemens. German law generally doesn’t permit filing criminal charges against a company. Siemens was named by the court as an accessory to Mr. Siekaczek’s alleged crimes. Under German law, prosecutors can fine a company €1 million and force it to surrender profits derived from illegal activity. Siemens said it won’t appeal the fines.

Siemens faces the threat of further fines by authorities and bans on public-sector contracts in several other countries where it already is being investigated, including the U.S.

In police interrogations recently, Mr. Siekaczek told Munich prosecutors about bribery involving Siemens managers in more than a dozen countries, including Brazil, Cameroon, Egypt, Greece, Poland and Spain, according to separate court records in Street Journal’s possession.

Mr. Siekaczek’s lawyer, Wolfgang Kreuzer, says his client will be an important witness in any future German trials of Siemens-linked suspects once Mr. Siekaczek’s own case is closed.

Mr. Kreuzer noted that his client has been charged with embezzlement for the benefit of Siemens, not with bribery. Mr. Kreuzer said he won’t challenge the facts behind the embezzlement charges.

Mr. Siekaczek already is playing an important role in criminal investigations outside Germany, according to people familiar with the matter. Prosecutors in Switzerland and Italy, probing suspicious payments tied to Siemens, have spoken with Mr. Siekaczek. A Greek investigation into possible criminal behavior by a Siemens executive in that country also is linked to Mr. Siekaczek.

As part of the settlement with Siemens, Munich prosecutors have ruled out further fines against the company for any illegal activity tied to its telecom unit, which was dismantled last year. They continue to pursue cases against individuals and could penalize Siemens for wrongdoing at any of the company’s existing business units.

Siemens disclosed last week that company officials are being investigated in China for alleged corruption at several business units, including those specializing in medical equipment, factory automation and information technology. It also cited corruption probes by local authorities in Hungary, Indonesia, Norway and Italy.

Data in Siemens Case

In its Oct. 4, 2007, ruling against Siemens AG, the Munich State Court named the participants in 77 bribes by company officials in three countries. A court spokesman says the information was garnered from witness statements and Siemens documents and carefully fact-checked before presentation in the ruling. The court didn’t interview the alleged bribe recipients before issuing its decision. Below, the information as presented in the decision. (See related article.)

Date Amount Siemens Employee Business Consultant* Recipient Function of Recipient Country
13.02.2003 153,370.00 euros Gilbert / Horngacher Mokhtar Headi Tayeri Ramadan Negita General Manager of State owned Libya Telecom GPTC Libya
15.10.2003 20,000.00 euros Gilbert / Ulsamer Mokhtar Headi Tayeri Ramadan Negita Generalmanager of State owned Libya Telecom GPTC Libya
12.08.2003 5,000.00 euros Horngacher / Ulsamer Ramadan Negita General Manager of state owned Libya Telecom GPTC Libya
09.01.2003 8,250.00 euros Horngacher / Gilbert Ramadan Negita General Manager of state owned Libya Telecom GPTC Libya
21.08.2002 69,561.23 euros Gilbert / Raffelsberger Tasharukiate Altawen E. Swei Emhemmed Jamel . Projekt Manager of State owned Libya Telecom GPTC Libya
20.11.2002 38,954.97 euros Gilbert / Horngacher E. Swei Emhemmed Jamel . Projekt Manager of state owned Libya Telecom GPTC Libya
Unknown time after 2002 500,000.00 euros Seidel /Gilbert Cornelius Adebayo Minister of Telecommunication Nigeria
22.05.2004 70,000.00 euros Seidel Cornelius Adebayo Minister of Telecommunication Nigeria
Shortly after 03.09.2004 70,000.00 euros Seidel Mohamed Project Manager Implementation, with State owned Telecommunication company NITEL Nigeria
Shortly after 10.07.2004 50,000.00 euros Seidel David Osakwe Oyegun State Secretary , Communication Ministry Nigeria
18.02.2004 20,000.00 euros Seidel David Osakwe Oyegun State Secretary , Communication Ministry Nigeria
02.12.2003 20,000.00 euros Seidel David Osakwe Oyegun State Secretary , Communication Ministry Nigeria
25.08.2003 150,000.00 euros Seidel Dr. Bello Mohammed Minister for Telecommunication Nigeria
08.07.2002 550,000.00 euros Seidel Apexpost Ltd. Dr. Bello Mohammed Minister for Telecommunication Nigeria
27.08.2003 102,400.00 euros Mennenga Martjanov Technical Director of Public Communication Net Petrozavodsk Russia
27.09.2002 39,000.00 euros Mennenga Kaspirovitsch General Manager of Public Telecommunication Net Khabarovsk Russia
Shortly after 27.06.2003 21,100.00 euros Mennenga Siljakov General Manager of Public Telecommunication Net Angarsk-Usoliye Russia
20.03.2002 47,000.00 euros Mennenga not specified General Manager of Public Telecommunication Net Cheboksary Russia
18.06.2002 50,000.00 euros Seidel Samsun Olabiyi Legal Advisor of NITEL Nigeria
02.04.2003 50,000.00 euros Seidel Samsun Olabiyi. Legal Advisor of NITEL Nigeria
15.10.2003 10,000.00 euros Seidel Dr. Mamza State Secretary in Nigeria Ministry for Telecommunication Nigeria
25.08.2003 130,000.00 euros Seidel R. Olusanju Secretary in Tenderboard of NITEL Nigeria
27.08.2002 100,000.00 euros Seidel R. Olusanju Secretary in Tenderboard of NITEL Nigeria
03.05.2004 60,000.00 euros Seidel Buba Bajonga Managing Director NITEL Nigeria
19.04.2004 120,000.00 euros Seidel Allahbamulafia Director with NITEL Nigeria
30.04.2003 200,000.00 euros Seidel Aruna Minister for Telecommunication Nigeria
12.08.2002 200,000.00 euros Seidel Aruna. Minister for Telecommunication Nigeria
08.08.2002 5,000.00 euros Seidel General Tajudeen Olanrewaju Telecommunication Minister Nigeria
13.05.2004 20,000.00 euros Seidel Chuka Nwizu Head of Immigration Office Nigeria
18.03.2004 15,000.00 euros Seidel Aliyu Datti Legal Advisor NITEL Nigeria
17.01.2002 1,000,000.00 euros Seidel J.E. Douglas Steradian Co several decision makers among others Tele- communications Minister and others Nigeria
22.01.2002 500,000.00 euros Seidel J.E. Douglas Steradian Co several decision makers among others Telecommunication Minister and others Nigeria
Unknown time after Nov. 29, 2001 2,250,000.00 euros Seidel several decision makers among others Telecommunication Minister and others Nigeria
23.06.2003 350,000.00 euros Seidel C. Woermann GmbH several decision makers political office holders Nigeria
23.06.2003 750,000.00 euros Seidel C. Woermann GmbH several decision makers political office holders Nigeria
25.08.2003 620,000.00 euros Seidel C. Woermann GmbH several decision makers political office holders Nigeria
25.08.2003 380,000.00 euros Seidel C. Woermann GmbH several decision makers political office holders Nigeria
Unknown time after Nov. 29, 2001 1,064,000.00 euros Seidel C. Woermann GmbH several decision makers political office holders Nigeria
Shortly after 31.03.2003 310,100.00 euros Mennenga not further specified General Manager of Public Communication Net Chelyabinsk Russia
Shortly after 31.03.2003 39,500.00 euros Mennenga Viktor Markovich Nazarov General Manager of Public Communication Net Penza Russia
Shortly after 15.07.2002 3,800.00 euros Mennenga Viktor Markovich Nazarov General Manager of Public Communication Net Penza Russia
27.09.2002 3,600.00 euros Mennenga Viktor Markovich Nazarov General Manager of Public Communication Net Penza Russia
01.08.2002 18,200.00 euros Mennenga Viktor Markovich Nazarov General Manager of Public Communication Net Penza Russia
01.08.2002 3,600.00 euros Mennenga Viktor Markovich Nazarov General Manager of Public Communication Net Penza Russia
10.11.2003 50,000.00 euros Seidel Alhadji Haruna Elewi Minister for Telecommunication Nigeria
20.03.2002 52,000.00 euros Mennenga Chaustovitsch General Manager of Public Communication Net Voronezh Russland
Shortly after 31.03.2003 151,000.00 euros Mennenga Melnikov, Malzev and others General Manager of Public Communication Net Vladivostok Russia
27.09.2002 67,700.00 euros Mennenga Melnikov, Malzev and others General Manager of Public Communication Net Vladivostok Russia
01.08.2002 12,000.00 euros Mennenga Melnikov, Mazev and others General Manager of Public Communication Net Vladivostok Russia
20.03.2002 79,000.00 euros Mennenga Melnikov, Malzev and others General Manager of Public Communication Net Vladivostok Russia
12.04.2002 38,100.00 euros Mennenga Solnikov General Manager of Public Communication Net Rostov-on-Don Russia
27.09.2002 148,900.00 euros Mennenga Solnikov General Manager of Public Communication net Rostov-on-Don Russia
12.04.2002 23,300.00 euros Mennenga Kuznenko General Manager of Public Communication Net Belgorod Russia
27.09.2002 2,000.00 euros Mennenga Kuznenko General Manager of Public Communication Net Belgorod Russia
27.09.2002 14,300.00 euros Mennenga Fornitschow, Kalaschnikowa and others . General Manager and Finance Director of Public Communication Net Izhevsk Russia
27.09.2002 2,200.00 euros Mennenga Kolokov, Gense General Manager and Technical Director of Public Communication Net Yaroslavl Russia
20.03.2002 21,100.00 euros Mennenga Kolokov, Gense General Manager and Technical Director of Public Communication Net Jaroslavl Russia
Shortly after 31.03.2003 139,500.00 euros Mennenga Galevko and others General Manager and Technical Director of Public Communication Net Kaluga Russia
27.09.2002 6,400.00 euros Mennenga Galevko and others General Manager and Technical Director of Public Communication Net Kaluga Russia
20.03.2002 1,700.00 euros Mennenga Galevko and others General Manager and Technical Director of Public Communication Net Kaluga Russia
Shortly after 31.03.2003 137,800.00 euros Mennenga Elkin General Manager of Public Communication net Samara Russia
27.09.2002 40,000.00 euros Mennenga Elkin. General Manager of Public Communication Net Samara Russia
01.08.2002 28,000.00 euros Mennenga Elkin General Manager of Public Communication Net Samara Russia
27.09.2002 43,600.00 euros Mennenga name unknown General Manager of Public Communication Net NTK Vladivostok Russia
01.08.2002 33,000.00 euros Mennenga name unknown General Manager of Public Communication Net NTK Vladivostok Russia
01.08.2002 14,400.00 euros Mennenga name unknown General Director of Public Communication Net Tyumen Russia
20.03.2002 10,900.00 euros Mennenga Maslow General Manager of Public Communication et Kursk Russia
12.04.2002 18,600.00 euros Mennenga Melkov Representative General Manager of Public Communication Net Ryazan Russia
Shortly after 31.03.2003 5,100.00 euros Mennenga Melkov. Representative General Manager of Public Communication Net Ryazan Russia
20.03.2002 26,100.00 euros Mennenga Melkov Representative General Manager of Public Communication Net Ryazan Russia
Shortly after 31.03.2003 32,000.00 euros Mennenga Kleschow General Manager of Public Communication Net Kostroma Russia
27.08.2003 102,400.00 euros Mennenga Gornostai, Menkowa General Director and Finance Director of Public Communication Net Petrozavodsk Russia
12.04.2002 28,100.00 euros Mennenga not known by name General Manager and Representative Director of Public Communication net Naberezhniye Russia
11.04.2003 185,000.00 euros Seidel Jubril Aminu and others Senator of governing party Nigeria
18.10.2002 50,000 Swiss francs,
10,000 British pounds
Seidel political decision makers not known by name political office holder Nigeria
22.10.2002 200,000.00 euros Seidel political decision makers not known by name political office holder Nigeria
11.06.2004 10,048 British pounds Seidel political decision makers not known by name political office holder Nigeria 

 

 

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