Siemens to pay $100m to fight corruption

WASHINGTON - The World Bank on Thursday announced a comprehensive settlement with German industrial giant Siemens in the wake of the companys acknowledged past misconduct in its global business and a World Bank investigation into corruption in a project in Russia involving a Siemens subsidiary.
The settlement includes a commitment by Siemens to pay 100 million dollars over the next 15 years to support anti-corruption work, an agreement of up to a four-year debarment for Siemens Russian subsidiary, and a voluntary two-year shut-out from bidding on Bank business for Siemens AG and all of its consolidated subsidiaries and affiliates.
As part of the settlement, Siemens has also agreed to cooperate to change industry practices, clean up procurement practices and engage in collective action with the World Bank to fight fraud and corruption, said the World Bank in a statement.
Siemens will also provide information on any additional cases of wrongdoing to the Banks Institutional Integrity Vice Presidency (INT), which investigates fraud and corruption in Bank Group-financed activities.
Siemens two-year voluntary restraint means it loses the right to bid on Bank-financed projects until Dec. 31, 2010. Siemens will now have to withdraw any bids not accepted as of January 2009 when the restraint period takes effect. Siemens commitment to pay 100 million dollars to support global efforts to fight fraud and corruption would include providing funds to organizations and projects aimed at combating corruption through collective action, training and education.
The money will also be directed to helping governments to recover assets stolen by corrupt leaders, and strengthen efforts to identify and crack down on corrupt practices.
The World Bank noted that it would have audit rights over the use of these funds and veto rights over the selection of anti-corruption groups or programs receiving the funds.
Siemens cooperation with the World Bank follows a series of international investigations and legal proceedings in numerous jurisdictions around the world related to fraud or corruption in Siemens operations. Last December, Siemens settled related allegations made by the United States and German authorities including the U.S. Securities and Exchange Commission (SEC).