Siemens Corruption Scandal Deepens | Business| Economy and finance news from a German perspective | DW | 22.12.2006
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Siemens Corruption Scandal Deepens

Although Munich State prosecutors have freed a group of men accused of running slush funds at the engineering giant Siemens, they announced on Friday that the case was growing in strength.

Prosecutors first raided Siemens' offices in November

Prosecutors first raided Siemens' offices in November

At a press conference in Munich on Friday, prosecutors said the last of the five men in custody had now been conditionally released.

The weight of evidence against them had grown thanks to the "comprehensive testimony" obtained during their detention, said prosecutor Christian Schmidt-Sommerfeld.

He added that the investigation was proceeding, and the suspects as well as Siemens were cooperating in the ongoing probe.

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About a dozen former Siemens executives are expected to face breach of trust charges for the misappropriation of funds involving more than 200 million euros ($264 million).

The cash was allegedly deposited in hidden accounts and used as bribes in return for receiving lucrative contracts for the Munich-based electronics and engineering firm.

Bribery investigation widens

Friday's online edition of the weekly Stern magazine reports that prosecutors in Wuppertal, a city in Germany's west, are also investigating Siemens on suspicion of bribery.

The prosecutors suspect a contract obtained by Siemens to construct a electricity generating plant in Serbia worth nearly 50 million euros was obtained by bribing a European Union project official.

The kickbacks allegedly took the form of money and a "gift" of a luxury car. Both Siemens and the EU official involved have denied the charges. Stern said the plant suppliers, Siemens Power Generation and the engineering firm Lurgi Lentjes, as well as the project official denied the allegations.

Siemens launches own probe

Meanwhile, an American anti-corruption expert hired by Siemens has arrived in Munich to launch an internal investigation.

Michael Hershman, president of a private intelligence and security company, stressed his independence at a press conference held on Wednesday.

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The slush funds were reportedly used to bribe officials from Italy to Nigeria

"I am not here to represent Siemens," Hershman said. "I am also not here to defend Siemens, or apologize for them. I am completely independent."

Hershman, who was one of the co-founders of the anti-corruption organization Transparency International, said he was sure that "all of the people involved in the scandal will be identified." Siemens had earlier announced it would investigate suspect payments of over 420 million euros.

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