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Siemens scandal deepens

 

Over 100 million euros in Siemens bribes is said to have landed in thepockets of Greek politicians and officials

 

ELAINE GREEN

 

The Siemens scandal: A total of 100 million euros allegedly went into Greek bank accounts during Pasok's reign ahead of the 2004 Olympics

 

THE GOVERNMENT wants to lay the Siemens scandal at the door of Pasok. Bribes for contracts to the tune of 100 million euros are alleged to have been made on Pasok's watch and most intensely in the years preceding the 2004 Olympic Games.

 

The 100m euros allegedly went into Greek bank accounts from 32 different offshore companies, including ones in the Caribbean, Hong Kong, Dubai, Liechtenstein and Switzerland.

 

New Democracy came to power in March 2004, just a few months before the Olympic Games, and while there was plenty of last-minute contracting, the bulk of tenders had been sewn up long before.

 

"The word is that over 90 percent of the 100m euros went to Pasok people. Most of the Olympic projects had been awarded by the time ND got in. But there may have been some gifts to ND people to keep the wheels smooth after it came to power," a Greek businessman at a state-controlled entity told the Athens News.

 

"We were all rather taken by surprise over this in the business community as we imagine only Greece suffers in Europe from bribery, and one doesn't expect it in Germany, too," he said.

 

Senior executives of Siemens Hellas are reportedly in an awkward position as they have been asked to name the Greek politicians and high-ranking state officials who received bribes. If they do not cooperate with the investigation and name the officials, they will reportedly face felony charges against Siemens Germany and could be implicated in accusations of misappropriation of funds.

 

There is bound to be pressure on three members of the Siemens Hellas management team to testify: Dionysis Dendrinos, who was Siemens director for the Olympic security project which was led by San Diego-based Science Applications International Corporation; Prodromos Mavridis, who was in charge of the telecoms division in Athens but reportedly had powerful managerial ties to Siemens' head offices; and the former CEO of Siemens Hellas, Mihalis Christoforakos, who instigated his own inquiries into the scandal and sent the files to the parent company in Germany.

 

Three Greek prosecutors will go to Switzerland at the end of next week and then to Munich as part of the investigation. Those accused are likely to face trial by the summer.

 

OTE named and shamed

 

OTE telecoms is one of the companies whose officials allegedly received bribes prior to 2004.

 

"When OTE first heard of the accusations back in December 2006, it got in touch with lawyers involved in order to try and begin its own investigation," a source familiar with the matter said. "At first, they did not reply, so OTE contacted them again and finally the lawyers investigating said that when their investigation was over they would get in touch with OTE. OTE has requested names and dates."

 

"It is not in the hands of the Greek courts but the German courts and US lawyers for the SEC [Securities and Exchange Commission]," the source noted.

 

"The whole thing appears to have started in the 1990s and ran until early 2004," he added. The contracts from Siemens and Greek telecommunications and technology major Intracom were worth billions, he noted. Siemens and Intracom continue to be OTE suppliers. "Once you have a technology in place, it is difficult to switch to another technology. But there are open tenders now, and the present OTE administration has no connection to the earlier practices," the source said.

 

A market expert echoed these sentiments. "I don't think it will taint OTE's present management... This is more of a Pasok thing," he said, adding some feigned surprise at the idea of Greek politicians accepting bribes.

 

"It should be noted that Intracom and Siemens were very closely linked and that Intracom was a monopolistic supplier in Greece for many years," another source said.

 

On February 2, Pasok submitted an official request for a parliamentary committee to investigate the allegations. However, Interior Minister Prokopis Pavlopoulos said that same day that such an investigation could prejudice Germany's judicial probe.

 

The Siemens scandal has sparked a war of words between two of the Pasok ministers most closely associated with the Olympic Games. Former public order minister Mihalis Chrysohoidis and former defence minister Yannos Papantoniou have both absolved themselves of any responsibility in choosing the US-led consortium that undertook a quarter-million-dollar security system for the Games; Siemens was a part of that consortium.

 

Evangelos Malesios, a former deputy public order minister who lost his job over the Olympic security contract, took a shot at both men. In a statement to the media he said that the ministries were officially jointly responsible for the project.

 

German profits boom

 

A new CEO was appointed last year at Germany's Siemens to try to wipe clean the slate. Peter Loescher, who came to Siemens from pharmaceutical company Merck, was brought in on an anti-corruption ticket. Company profits have been booming under the new administration. But with trials of implicated former executives coming up, the current administration of Siemens, one of Europe's biggest conglomerates, is afraid that the company's popularity will be hit.

 

On January 22 Gerhard Cromme, chairman of Siemens' supervisory board, received a letter from its lawyers, Debevoise & Plimpton, wire services reported. The information "pertains to the conduct and knowledge of a number of individuals who have served on the managing board during the past several years", the letter is understood to have read, without naming those accused.

 

So far, Siemens has found suspicious payments amounting to 1.3bn euros, which were most likely bribes to win contracts. Money was also allegedly paid to individuals in European countries, as well as in the United States and China.

 

Siemens Hellas' press department did not respond to calls.

 

Tougher laws

 

In Greece, a bill submitted to parliament on February 6 aims to upgrade the giving and taking of bribes from the current misdemeanour to a criminal offence.

 

Justice Minister Sotiris Hatzigakis said the new law will be tabled in parliament soon. Members of the public and private sector who have been found guilty of bribery will face criminal charges for bribes exceeding 73,000 euros.

 

A foreign businessman told this newspaper that he was amazed that bribery is treated so lightly in Greece and said such reforms are long overdue.

 

But he questioned the apparently arbitrary figure of 73,000 euros, saying it will allow everyday petty bribery to continue.

 

"It should be outlawed altogether," he said. "A bribe is a bribe, no matter how big or small, and should be against the law."

 

ATHENS NEWS , 08/02/2008, page: A21

Article code: C13273A211

 

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www.athensnews.gr/athweb/nathens.prnt_article?e=C&f=1...

    

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