PREVIEW-Prime suspect stands trial in Siemens bribe scandal
By Nicola Leske
FRANKFURT, May 23 (Reuters) - One of the prime suspects in a worldwide corruption and bribery scandal that shook German engineering group Siemens (SIEGn.DE) is due to stand trial on Monday at a Munich court on charges of embezzlement.
Reinhard Siekaczek, who worked at Siemens for almost four decades, is accused of expanding a system of slush funds for bribes to win contracts worldwide and setting up a network of front firms to allow for the transfer of cash.
The court has allocated 15 days for the trial so far. Former Siemens Chief Executive Heinrich von Pierer and Thomas Ganswindt, who used to run Siemens' telecoms business, are expected to testify next month.
Siekaczek was an executive in the company's telecoms equipment unit COM, the division which investigators have focused on in their probe.
Siekaczek has said he would cooperate with investigators and has already testified as a witness in a previous trial concerning bribery activities at the COM unit.
In his witness statement at the time, he said he was asked to set up slush funds for bribes in 1999 or 2000 and told prosecutors that he knew of bribery schemes earlier this decade in more than a dozen countries.
Siemens, which makes everything from medical scanners and high-speed trains to wind turbines and light bulbs, is being investigated around the world on allegations that it bribed customers to win contracts.
The U.S. Securities and Exchange Commission is also looking into the matter. The company faces the possibility of large fines or even U.S. sanctions that could exclude it from bidding for certain contracts as a result of the SEC investigation. In October, German prosecutors fined the conglomerate 201 million euros ($316.8 million) after tracing millions in bribes to Nigeria, Russia and Libya.
Siemens has said it has identified 1.3 billion euros in suspicious transactions worldwide between 2000 and 2006.
SLUSH FUND NETWORK
The scandal first became public when German police raided Siemens' offices in November 2006.
The investigation quickly mushroomed into what may be the world's biggest bribery case, triggering high-level arrests including that of Siekaczek and the resignations of Siemens Chairman von Pierer and Chief Executive Klaus Kleinfeld last year. Neither has been accused of any wrongdoing. Siekaczek is accused of taking over an existing slush fund system for bribes at the end of the 1990s and expanding it with a few colleagues and the knowledge of his direct supervisor, according to the indictment.
He is also accused of setting up a network of front companies in the Middle East, the Caribbean and the Channel Islands. Through a branched out system of slush funds and bogus consultancy contracts, millions flowed into telecommunications projects in Egypt, Saudi-Arabia, Indonesia, Vietnam and the Olympic Games in Athens, the indictment says.
The accused had been aware of the fact that the company would not have tolerated the behaviour of those involved, the indictment added.
His direct supervisor had ensured that the division head and the executive committee had no knowledge of the bribery system, according to the indictment, a point that exonerates large parts of Siemens' top management.
Earlier this month prosecutors investigating suspected bribery at the engineering group said they had found no evidence to warrant criminal charges against von Pierer.
However, he and other former company officials are being investigated for the administrative offence of breaching their corporate supervision duties, Munich prosecutors said. (Additional reporting by Jens Hack; Editing by Louise Ireland)
