Report: Siemens Said to Pay Hush Money in Bribe Case

MUNICH (Reuters) – German prosecutors are investigatingwhether engineering group Siemens AG (SIEGn.DE: Quote, Profile, Research) paid millionsof dollars in hush money to cover up bribes it used to winbusiness contracts, a newspaper reported.

Several suspects have made this allegation toinvestigators, the Sueddeutsche Zeitung said on Wednesdaywithout giving a source for its information.

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

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

The paper said the group paid consultants sums of up to 18million marks – the case dates from before the introduction ofthe euro – and then added more money later to buy their silenceover extensive bribes. At times payments flowed as a result ofthreats 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 hasalready fined it 201 million euros in the case.

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

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

Chairman Gerhard Cromme is seeking a settlement indiscussions 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)