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Siemens Scandal

DW staff / AFP (sac)March 27, 2007

Prosecutors in Munich have arrested a top management board member at Siemens in an investigation into alleged bribery. The move marks yet another dimension to the ongoing scandals at the German engineering giant.

Siemens is facing a string of corruption allegationsImage: AP

Johannes Feldmayer is the most senior Siemens manager to be arrested in a series of different probes into allegations of widespread corruption and embezzlement which have rocked the company in recent months.

According to a company spokeswoman, Feldmayer's arrest was connected to a separate investigation into alleged payments made by the company to the head of the AUB labor organization, Wilhelm Schelsky. In the other main high-profile slush-fund scandal, prosecutors allege that company managers siphoned off hundreds of millions of euros in Siemens money to obtain foreign contracts.

"Siemens is cooperating fully with the investigators," the spokeswoman said on Tuesday. It would continue to do so, she added.

Siemens hires outside consultants to find the facts

Siemens Vorstandsmitglied verhaftet Johannes Feldmayer ist nach Angaben des Konzerns am Dienstag, 27. Maerz 2007, verhaftet worden.
Feldmayer is the first top Siemens manager to be arrestedImage: AP

The 50-year-old Feldmayer has been on the management board since 2003. He is responsible among other things for the Siemens subsidiary IT Solutions and Services. His arrest came after prosecutors raided Siemens offices in Munich, Erlangen and Nuremberg, the district attorney's office in Nuremberg said.

Schelsky, a former works council member at Siemens, was arrested last month.

Siemens has been plagued by separate corruption allegations in recent months, prompting chief executive Klaus Kleinfeld to hire an outside anti-corruption expert and a law firm to examine and revise the company's safeguards.

Employees held for questioning

In November, German prosecutors launched a massive probe at Siemens, raiding the offices and homes of a number of Siemens employees amid suspicions of embezzlement, bribery and tax evasion.

500-Euro-Schein, Symbolbild Bestechung, Schmiergeld, Korruption
A number of Siemens employees are suspected of briberyImage: picture-alliance/dpa

A number of current and former employees at the fixed networks division, including top-ranking managers, have been held for questioning on the matter. Prosecutors allege that the employees concerned are suspected of collaborating to open slush fund accounts abroad and of operating a system to embezzle company money.

Prosecutors put the sum held in the accounts at 200 million euros ($266 million). Some of that money may have been used as bribes to obtain contracts abroad.

Siemens itself said that it had uncovered as much as 420 million euros in suspicious payments as part of the probe.