Israel Securities Authority Sees Evidence Siemens Bribed Electric Corp. Officials

German industrial group accused of paying off IEC executives to secure contracts.

Reuters
Reuters
A Siemens building in Germany.
A Siemens building in Germany. Credit: AP
Reuters
Reuters

The Israel Securities Authority said on Tuesday it had evidence that German industrial group Siemens paid about $20 million in bribes to officials at state-owned Israel Electric Corporation to win contracts from 2000 to 2005.

After six years of investigations, the ISA passed on its findings to the Tel Aviv District Attorney’s office, which will decide whether to bring charges against a number of former Siemens and IEC executives.

The alleged payments to IEC, intended to help Siemens win a gas turbine tender and other contracts, were part of a broader case in which Siemens handed out $1.4 billion in bribes to advance its business globally, the authority said.

Siemens has sought to recover damages from 11 former top managers and supervisory board members for failing to stop illegal practices and bribery that forced it to pay more than $1.3 billion to settle corruption probes in the United States and Germany in 2008.

In this instance, the money is believed to have passed through a former CEO of Siemens in Israel and his brother-in-law by way of foreign bank accounts and on to at least six former IEC executives, the authority said.

“This is a complex case in which the suspects acted very cleverly and disguised the transfer route of the bribery money through bank accounts in various places around the world,” the ISA said in a statement.

Officials at Siemens could not be reached for immediate comment.

IEC said it has “zero tolerance” for corruption and welcomed progress in the Siemens case. It called on law enforcement authorities to complete the proceedings as quickly as possible.

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