Hoping to quell recent waves of criticism about its conduct and frequent failure for charging executives in large Foreign Corrupt Practices Act (FCPA) cases, the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) charged individuals in the prominent Siemens case with bribery, the agencies announced Tuesday.
According to the SEC complaint, six former executives of Siemens and two alleged intermediaries have been charged with three counts: conspiracy to violate the FCPA and wire fraud statute, money laundering conspiracy and wire fraud. The men, including former member of the central executive committee of Siemens AG Uriel Sharef, allegedly conspired to pay more than $100 million in bribes to “high-level Argentine officials,” with about $60 million in bribes paid.
“Today’s indictment alleges a shocking level of deception and corruption,” Assistant Attorney General Lanny Breuer told the Washington Post. “Business should be won or lost on the merits of a company’s products and services, not the amount of bribes paid to government officials.”
The Siemens case had resulted in a settlement in 2008 of $1.6 billion in penalties, but not one company executive was charged in the U.S. for violating the FCPA, which prohibits bribery of foreign officials.
This prompted then Sen. Arlen Specter (D-Pa.) to criticize the DOJ at a congressional hearing in November 2010, where Butler University business law professor Michael Koehler of the FCPA Professor blog also accused the department of using a “two-tiered system.” Koehler said large corporations were fined for their misconduct, while executives at small companies face prosecution.
“The lack of individual prosecutions in the most high-profile egregious instances of corporate bribery causes one to legitimately wonder whether the conduct was engaged in by ghosts,” Koehler said at the hearing.
Though the agencies will inevitably continue to face critics, Tuesday’s charges help them quiet some accusations, as other recent FCPA prosecutions take the spotlight.
