Siemens AG’s agreement to pay $800 million to settle civil and criminal bribery charges leveled by U.S. authorities, after a long-running probe, brings the global total of fines paid by the company and its subsidiaries to a staggering $1.6 billion.
The latest amount is the largest penalty collected under the U.S. Foreign Corrupt Practices Act, which was passed more than 30 years ago.
Siemens will pay the U.S. Department of Justice $450 million and the Securities and Exchange Commission $350 million. The company and its subsidiaries in Argentina, Bangladesh, and Venezuela pleaded guilty in federal court for charges related to violations of the FCPA’s internal controls and books and records provisions.
Also announced today was the German conglomerate’s agreement to pay a fine of about $569 million to Munich officials, lifting the full-year total to the $1.6 billion mark due from Siemens AG and the three subsidiaries, and covering alleged acceptance of bribes by former managers earlier in the decade. Last year, Siemens paid German authorities a $285 million fine.
In November, Siemens put $1.3 billion in reserves last month to end the corruption charges.
U.S. regulators said today that former managers at Siemens falsified corporate books and records and bypassed internal controls between 2001 and 2007. The company allegedly used bribes worth more than $1.4 billion and kickbacks to garner work in various countries for subways, power plants, refineries, and telephone networks. Siemens is accused of hiding its “corrupt payments” through slush funds, cash moved by suitcases across borders, and off-the-books record-keeping. Regulators said Siemens made at least 4,283 payments to bribe government officials.
Without admitting wrongdoing to the SEC’s charges, Siemens will pay $350 million in disgorgement of what the SEC considers “wrongful profits.” The company will be overseen by an independent monitor for four years.
The U.S., Switzerland, Italy, Greece, China, Hungary, Israel, Russia, Norway, and Indonesia have all been investigating whether Siemens violated their compliance regulations.
U.S. authorities noted that Siemens has turned itself around since its own internal investigations uncovered potential wrongdoings. It has since restructured and made changes to its compliance program.
In a statement today, the company acknowledged that the U.S. and German probes are over. “We regret what happened in the past. But we have learned from it and taken appropriate measures,” said Peter Loscher, Siemens’ president and CEO.