Siemens - bribery case

Former Siemens executive convicted in bribery case

A German court on Monday convicted a former manager at Siemens of misuse of funds, in the first - but probably not the last - verdict stemming from a massive bribery scandal at the giant engineering and electronics company.

A court in Munich fined Reinhard Siekaczek €108,000, or $170,000, and imposed a two-year suspended prison sentence following an eight-week trial in which prosecutors offered extensive testimony and documentation about a company-wide system of slush funds and illicit payments.

Prosecutors had requested a relatively lenient penalty because Siekaczek cooperated extensively with the investigation, they said Friday in the final day of the trial.

A mid-level manager who worked at Siemens's telecommunications equipment division until 2004, Siekaczek oversaw a system that skimmed money out of legitimate company activities and into off-books accounts. The money was then used for bribes.

The conviction is the first resulting from an investigation that became public in late 2007 and that has only gathered steam since then. A law firm hired by Siemens has since identified €1.3 billion in "suspicious payments" that may have been bribes to win business.

Prosecutors say they are investigating over 300 other past and present Siemens employees on suspicion of wrongdoing, and that they are still sorting through millions of documents in their inquiry.

So far, prosecutors have not filed criminal indictments against any senior Siemens executive over the scandal, but neither have they ruled them out. They have charged Klaus Kleinfeld, the former chief executive, and Heinrich von Pierer, the former chairman, with failing to effectively supervise the company, a minor charge that under German law could result in only a fine.

However, Siemens itself is expected to announce lawsuits Tuesday against both executives over their failure to detect and clean up the network of slush funds and bribes, a person briefed on the matter said.

Though common in the United States, charges against former executives in Germany are relatively rare, and appear to signal the intent of Siemens's new chief executive, Peter Löscher, to mount an aggressive cleanup effort. Both Kleinfeld and von Pierer resigned last year as the scandal grew.