From Caijing Online

Engineering giant Siemens pleaded guilty in a corruption case and agreed to pay a total of US$ 1.6 billion in fines to American and European authorities, which is the most severe punishment for business bribery to date.

The U.S. Department of Justice announced December 15 that Siemens had admitted that it had bribed government officials to get contracts for more than 290 projects around the world from the 1990s to 2007.

Several divisions of Siemens in China were found to have been involved in the unprecedented corruption case, including the transportation systems (TS), power transmission and distribution (PTD) and medical solutions (MED) divisions.

According to information revealed by the U.S. court, Siemens’ misconduct in China started years earlier with the bribing of officials to secure huge public contracts for urban subway projects and medical and power transmission equipment.

Between 2002 and 2007, Siemens’ TS division paid US$ 22 million to its business consultants in order to facilitate the bribery of seven officials involved in a US$ 1 billion subway project.

According to the indictment of the U.S. Securities and Exchange Commission (SEC), Siemens’ business consultants helped the company to use slush funds to pay officials, rather than provide any legal services.

Between 2002 and 2003, the PTD division of Siemens paid US$ 25 million to win a US$ 838 million power transmission project in Southern China. And between 2003 and 2007, the MED division bribed officials and doctors a total of US$ 29.5 million to obtain government projects. It also offered luxury trips to doctors in order to obtain sales contracts worth US$ 235 million from state-owned hospitals.

In March 2008, director of the Songyuan city central hospital in Jilin Province was sentenced 14 years in prison for receiving huge bribe, which includes US$ 60,000 from Siemens.

Another two Siemens subsidiaries – Oncology Care Solutions and Molecular Imaging – were also found to have bribed customers a total of US$ 650,000 between 1998 and 2004.

So far no statements have been issued regarding the Chinese authorities involvement in the case.

The SEC report: http://img.caijing.com.cn/2008-12-18/110040245.pdf

Excerpt from the SEC complaint concerning China: