Harder to Hide

The massive Siemens bribery scandal — involving alleged payments to government officials around the world — continues to ensnare company officials. The latest victim is the new CFO of the company's industry division, whose appointment was revoked after company officials reviewed prosecution documents.

The Siemens case, which spans many jurisdictions, signals a clear trend in enforcement, says Lesli Ligorner, a partner with law firm Paul, Hastings in Shanghai: closer cooperation among governments, which are more readily sharing information. This makes it easier for them to prosecute corporate crime, says Ligorner. "Over the last two years, I've seen a flood of work in this area [as a result]."

This is particularly evident in China, where officials are providing more assistance to other governments in the interest of combating that country's own corruption problems.

The closer attention to bribery has netted several companies recently. In October, Schnitzer Steel, a U.S. metals recycler, received a criminal fine of US$7.5 million and other penalties exceeding another US$7.5 million stemming from kickbacks in China and Korea. Last September Paragon, a Netherlands- based company, reached a deferred prosecution agreement with prosecutors for bribes made in China, Kazakhstan, Mexico, and Nigeria.

Then there's Siemens, which was fined 201 million euros in October. A U.S. investigation is underway, too. "If the SEC investigation leads to enforcement, that case could break all records," says John Bray, a director with consulting firm Control Risks.