Report: Siemens Said to Pay Hush Money in Bribe Case

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The German government is investigating bribery allegations against Siemens. If true, the allegations are more bad news for the engineering company.

MUNICH (Reuters) - German prosecutors are investigating whether engineering group Siemens AG (SIEGn.DE: Quote, Profile, Research) paid millions of dollars in hush money to cover up bribes it used to win business contracts, a newspaper reported.

Several suspects have made this allegation to investigators, the Sueddeutsche Zeitung said on Wednesday without giving a source for its information.

"We are checking whether criminally relevant facts exist," a spokesman for the Munich prosecutor's office said in response to the report, declining to elaborate.

A Siemens spokesman said he could not discuss a case that is still under investigation.

The paper said the group paid consultants sums of up to 18 million marks - the case dates from before the introduction of the euro - and then added more money later to buy their silence over extensive bribes. At times payments flowed as a result of threats to go public with the information.

If true, the allegations are more bad news for Siemens, which has acknowledged making 1.3 billion euros ($2.03 billion) in dubious payments from 1999 to 2006. A German court has already fined it 201 million euros in the case.

The scandal has cost Siemens 1.6 billion euros in all so far in fines, writedowns and legal fees.

Siemens also faces drastic sanctions from the U.S. Securities and Exchange Commission (SEC), which could go as far as banning Siemens from bidding for U.S. contracts.

Chairman Gerhard Cromme is seeking a settlement in discussions with the SEC.

"We are in the process of entering talks" with the U.S. regulator, a company spokesman said.

(Reporting by Jens Hack; Editing by Paul Bolding)

This article was originally published on 2008-04-02
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