Five Former Utility Managers Convicted in for Taking Bribes, Other Offenses in Israel's 'Siemens Affair'

In plea bargain, five will get 24-45 months prison plus fines and forfeiture of property

Yacov (Yasha) Hain
Tomer Appelbaum

Fifteen years after the event, five former state-owned Israel Electric Corporation managers were convicted by a Tel Aviv court on Thursday for taking bribes and other offenses in the so-called “Siemens case.”

The convictions came after the accused reached a plea bargain with prosecutors, presented to Tel Aviv District Court Judge Beni Sagi. In exchange for pleading guilty to an amended indictment that charged them with bribery, fraud, breach of trust and money laundering, they will serve between 24 and 45 months prison time as well as pay fines and hand over assets worth tens of millions of shekels.

In agreeing to a plea bargain, the Tel Aviv District Prosecutor’s Office noted how much time has passed since the offenses were committed and the fact that much of the critical evidence against the defendants only emerged in 2014 because they had concealed the money they earned in overseas bank accounts and had taken other measures to thwart investigators.

Prosecutors said that without a plea bargain the investigation would have had to be extended and involved investigations abroad.

“Ending the case with confessions by the defendants and their taking responsibility for their actions within the framework of the plea bargain constitutes effective and efficient law enforcement, saves the court’s time and sends a message to public servants that the corrupt will be caught, and sent to prison, even after so many years have passed since they committed the crimes,” the prosecutor’s office said in a statement.

The affair in Israel is part of a worldwide bribery scandal involving Siemens, Europe’s largest engineering firm. In Israel, the investigation got under way in secret in 2009. Siemens admitted to paying bribes of $20 million to rig an IEC tender for power station turbines. The utility awarded Siemens contracts for more than 540 million euros ($571 million).

Last May, the German company agreed to pay the Israeli government 160 million shekels ($43 million) and appoint an independent monitor to ensure that its Israel unit doesn’t commit offenses in the future.

The five former IEC managers convicted on Thursday included David Kohn, who had been vice president for generation and transmission and head of IEC’s tenders committee until 2004. He admitted to taking $500,000 in payments, seeking more money and depositing the proceeds in Britain. Under the plea deal, he will serve 45 months, receive a suspended sentence and turn over 1 million shekels of property – although that figure may rise.

Yona Schweitzer, a former head of engineering planning, admitted to taking $200,000 in payments and depositing them in a Swiss bank account. The plea bargain calls for him to serve 29 months prison, receive a suspended sentence and forfeit 200,000 shekels of assets.

Yacov (Yasha) Hain, a former senior vice president for engineering projects, confessed taking $290,000 in bribes from Siemens, which he deposited in Switzerland. He will get 24 months’ time, a suspended sentence, forfeit 850,000 shekels of property and pay 300,000 in fines.

Haim Brenner, a former manager in charge of engineering planning, admitted to accepting $430,000 in payments, depositing it in Switzerland, and seeking more payments. He will be sentenced to 33 months, receive a suspended sentence and turn over 1.7 million shekels in assets.

Tzvi Eyal, a former manager in the utility’s planning division, confessed to taking $260,000 in payments, deposited in Switzerland. He will serve 28 months, receive a suspended sentence, forfeit 470,000 shekels of property and pay another 570,000 in penalties.

A sixth defendant, David Elmakais, a former planning manager, will go to trial.