Just Bribin'- Siemens

This week we tackle a German giant in industrial engineering, Siemens (yes there is more than a few jokes about it). Siemens has survived through two world wars on the losing side, and still managed to keep the scandal alive into the early 2000s when the entire company was finally outed for its decades long practice of bribing government officials. Find out all the dirty details in this episode!

Episode Transcript

(00:02):
Wall Street veteran Bernard Madoff has been arrested and
charged with running a $50 billion Ponzi scheme.
Congress wants to know what caused the Enron meltdown, and
while the collective rage currently is focused on low
comp. Tyco CEO Dennis Koslowski was
convicted of looting hundreds ofmillions of dollars.
This is one of the biggest fraudcases ever.

(00:23):
Their president's a crook. Well, I'm not a crook.
Find out more on this week's episode of White Collars Red
Hands. Siemens is a German company
founded over 150 years ago in a place that doesn't even exist
anymore, the Kingdom of Prussia.Nevertheless, she persisted.

(00:44):
Today, Siemens is a multinational conglomerate that
does business in 191 countries and employs hundreds of
thousands of people. Their expertise is wide but
focuses mainly on engineering applications.
But their business has a checkered past the likes of
which can only be attained by a German based company that
operated throughout the 1940s. On top of that, they carried a

(01:08):
corporate structure based in large part on corruption in
whatever foreign markets would allow it today.
We discussed their history from humble beginnings through two
world wars and finally being embroiled in a scandal in the
early 2000s that saw them slapped with one of the largest
fines in world history at the time.

(01:28):
So join us for a large dose of Vertshop de Scheferbrekin.
I got it. I hope we don't have too many
German listeners on this week's episode of White Collar's Red
Hands. And what is that, Kashan?
It is. Economic crimes.
If you Google what is the Germanword for white collar crime, it

(01:50):
is that is the result say. It again.
I don't think they would say theWest would be vert vert shaft
sheva brecken. Work.
Good job workshops for Brecken. Good job Froyline.
Oh fuck, I had it for a second. You know what, I have it once

(02:10):
later in the in the script. You can practice.
Again, right. So keep that in mind and maybe I
can hit it better next time. All right.
Welcome back, everybody. You mean guten tag?
Oh yes, Guten Tag everyone, welcome back to another episode
of White White Collar's Red Hands.
So I mean, that is, you know, White Collar, White Collar's red

(02:31):
hands. I'm Kashawn.
And I'm Nina. Yeah.
And today we're talking about. Deutschland.
Siemens, which I, you know, I thought, I thought, you know,
OK, maybe it's not pronounced like that.
Maybe maybe it's like the Uranus, Uranus kind of thing.
Yeah, yeah, yeah. Where it's like Siemens.
Yeah, it's like, maybe it's not pronounced the funny way.
It's just everyone's always doneit that way.
No, no, it's pressed. No, no, no.

(02:52):
It's definitely it's. 100% pronounced Siemens.
Siemens originally had two names.
Like my baloney? What?
I just saw coming and I thought you were gonna say that was the
name before Siemens. Oh no, this is AI.

(03:13):
Just put those in a. Little pun.
I put I put headers in here thatare usually jokes just for
myself. Yeah.
So this is Siemens in Origin is coming.
I'll let you decide how I spelled coming.
Siemens originally had two names, like my baloney Oscar
Mayer buried just down the road from here.
RIP. And it was founded in 1847 by

(03:34):
Werner von Siemens and a man named Johan George Halsk under
the name. It would be gay gay org.
It is not gay org. Yes, it.
Is. No, it is not.
Have you never watched The Soundof Music?
No, I fall asleep halfway through, I've told.
His name is Gay Org are you? Serious.
Yes. Oh my God, fine Johann Gay Org

(03:57):
Halsk under the name Siemens andHalsk.
Both were engineers that startedthe company to manufacture
electrical telegraphs, which were all the rage at the time.
Their corner on the market was they were using the newly
patented Telegraph design by Charles Wheatstone.
That was a needle Telegraph. You know, mostly telegraphs

(04:19):
today are represented in the form of Morse telegraphs, which
obviously use the Morse code series of dots and dashes to
send messages. But the needle Telegraph instead
transmitted an electrical signalthat would move a needle across
a printed sheet with all of the letters and characters to point
out the symbols instead. Why did that one not survive

(04:41):
time but the the? Worst one did.
Hard to say. Yeah, don't know.
The Telegraph is one of the first instances of electrical
engineering, which meant that Siemens and Halsk was one of the
first electrical engineering companies and they did some big
things immediately as just one year after their founding in
1848, they built the first long distance Telegraph line in

(05:03):
Europe, which stretched over 300miles from Berlin to Frankfurt.
After this, Werner von Siemens got all of his brothers involved
on the deal, with William Siemens opening a London branch
of the business and Karl Heinrich von Siemens opening one
in Saint Petersburg, Russia. In the 1850s, the Siemens family
became so involved with Siemens and Halsk that in 1867 Johann

(05:26):
Halsk left the business due to adifference of business
perspective with the Siemens brothers.
However, he did remain friends with them and had close ties
until his death. He was a very large player in
the the like Siemens and Halsk pension fund or something.
I don't know, I don't. So I don't know why he.
So their Siemens fund pension fund was full and strong and

(05:50):
robust, Yeah, filled to the brimin plentiful.
Yeah, the Siemens bank was doingvery good the year that Johann
Halsk left. They actually had their largest
achievement to date though, whenthey completed the 6800 mile
Indo European Telegraph Line, The 6800 mile Indo European

(06:12):
Telegraph Line stretching from London to Calcutta, which now is
spelled differently and I think pronounced differently, Kolkata.
Oh. Interesting.
Then Siemens expanded beyond theTelegraph.
The same year they completed theIndo European Telegraph line.
Werner von Siemens developed oneof the first electrical
generators without permanent magnets, known as a Dynamo, and

(06:36):
although others had independently developed this in
parallel, including Wheatstone himself, the person who did the
patent on the needle Telegraph, Werner and his company were the
first to manufacture them 'causethey already had all the ability
to do so. This allowed them to bring
electrical St. lighting to the UK town of Godalming, the 1st.
I'm probably also butchering that, so sorry if you're from

(06:58):
there. The first ever instance of
electrical streetlights ever. Interesting.
Yeah, from here it was nothing but up.
Siemens brought innovations to electric trolleys, light bulbs
and airplanes, and throughout the late 1800s they expanded to
having offices in Japan and doing business in Australia, and

(07:19):
they were well set up to continue the run when Wernher
von Siemens retired from the company in 1890, leaving control
to Carl and his sons. Throughout the years, the
Siemens family has remained in alarge position of power of the
company even to this day, Although although it is a public
company, the Siemens family holds the largest share of stock

(07:42):
at 6.9% a 170 years. Wow, that general generational
wealth BB. Really got handed down there.
There is a there's some Siemens heirs and heiresses out there.
It's funny 'cause I always thought people said that you
wanted to avoid getting Siemens in your air.
Listen, beggars can't be choosers.

(08:03):
Siemens in your air. I hear it.
I hear you. Yeah.
Well, I thought that was I thought that was funny.
That's fine. Moving on in 1897, they.
Combined. They combined with Schuchert and
company to become Siemens Schuchert.
These names have just as much creativity as you would expect

(08:24):
from Germans and by nineteen O 7they employed 34,000 people,
which was the 7th largest company by employment rate in
Germany at the time. Then war came to the world in
one of those rare instances where the sequel is talked about
more than the original, like TheGodfather Part 2.
Like Shrek 2, a lot of people like Shrek two more than Shrek

(08:45):
one. Wrong.
That's so wrong, I've never heard that before.
A lot of people like Shrek. Two, I disagree.
I like both of them. The world Wars?
OK, we're not. During World War One, Siemens,
like many other businesses, shifted their manufacturing
capabilities to assist the war effort and began to pump out
Rotary engines, airplanes and even machine guns for the

(09:08):
Germans. They also found themselves in
our first scandal of the day. So in January of 1914, just
months before the start of WorldWar One, the london-based
newspaper The Daily Telegraph published an article breaking a
huge load of seaman scandal thatwould forever change the face of
Japan. A former employee of the Siemens

(09:31):
Tokyo office had absconded with some incriminating documents on
his way out of the door and soldthem to the news.
These documents detailed that Siemens had been paying large
sums of money to leading membersof the Japanese Navy in the form
of kickbacks to receive government contracts.
So Siemens was giving money to the Japanese seamen in order to

(09:53):
get contracts for Siemens to build infrastructure for the
seamen of Japan. Siemens got the contract and
threw 15% of its total value to the powers that be that arranged
them to get it. This allowed Siemens to maintain
a near monopoly on any contract handed out by the Japanese Navy
and at one point they had paid £1000 sterling, or over $150,000

(10:18):
adjusted for today's inflation, to obtain just one
communications contract. That was until Vickers, a
British based competitor, decided to outbid Siemens bribes
by offering 25% of the total contract value as a bribe back
to them. However, when Carl Richter
leaked the story, the Japanese people were very upset with the

(10:39):
corruption displayed by their government and the country
erupted into protest which drew large participation with some
region greater than 50,000 protesters in attendance.
They were not happy. About that, they were mad about
that semen. The Japanese Navy got their
budget denied. They had asked for like a, a
ridiculous amount of money that year and they were like, no.

(11:00):
And then high level officials inthe Navy were court martialed
and even the Prime Minister, Yamamoto Ginojo, was ousted.
Carl Richter was arrested when he returned to Germany, but he
was charged with stealing the papers that he had sold to the
media and was sentenced to two years after conviction.

(11:21):
Leaders at Siemens faced some public scrutiny.
But we're never actually chargedwith anything.
So is this just run-of-the-mill apathy in the face of Vert,
Schaufsberg, Brecken though? Not necessarily.
Throughout most of German history, paying bribes to
foreign officials was actually not illegal for companies to do,

(11:44):
as long as the bribes were to foreign political leaders.
I don't think they could bribe people in Germany, but if you
were bribing foreign political leaders.
And say OK. That's fine.
In fact, until 1999, these bribes were even tax deductible
business expenses. Yo what?
Often on Siemens cost sheets there were line items listed as

(12:07):
nuts, lyche ottwendungen, nuts lyche ottwendungen, or Nas.
That literally just translates to useful expenditures.
But was was just always used to to say bribe.
So it was just business as usual.
But their bribery between the Japanese scandal in 1999 was not

(12:28):
really the controversy they're known for during this time.
So after the First World War, Siemens continued to branch out,
started to manufacture radios, televisions, electron
microscopes, and continued to build electrical infrastructure
such as hydroelectric plants in places.

(12:51):
And then Hitler came to power inGermany and Siemens was on the
wrong side of history. Shocking.
They made trucks that served as the public address systems for
the Nazis on their Wikipedia page.
It's just like a Siemens truck with like Nazi propaganda on the
side and like a like a speaker on top that they could drive

(13:11):
around and act, act like a, yeah, propaganda Nazi ice cream
machine. Great.
Ice cream truck, not ice cream machine.
I knew what you meant. Yeah.
And they were also one of the main companies that were
utilizing forced labor in their factories.
Oh wow, yeah, really on the wrong side of history here,
buds. Yeah.
From those being held in concentration camps, they owned

(13:33):
and operated plants both at the Ravensbrook concentration camp
just north of Berlin and at the quite infamous Auschwitz
concentration camp in Poland. And at least 80,000 forced
workers walk through their doors.
Their website says that they employed 80,000 forced workers
during that time. And I was like.
I employed 80,000. OK, That's like when, shoot,

(13:57):
what's that? That's like when Ben Carson was
like, and some slaves wanted to be here or some like, you know,
remember when he was like, they offered themselves to be here
and I was like, no, they didn't shut up.
No, no, it's not how that worked.
Yeah, I was like, I don't know if I agree with the wording on
that. I don't know if you could say
employed if they were like indentured servants, right.

(14:23):
And that was between 1940 and 1945.
So they had 80,000 workers that were forced workers in
concentration camps during this time.
They got a bit of recompense, atleast a little bit for these
atrocities when most of their manufacturing plants were
destroyed by bombing in the latestages of the war.
They went through a period of rebuilding like the rest of
Germany, but they continued on largely because electronics were

(14:47):
something that, you know, they, they were continuing to pop off
the electronics and they got more and more needed and wanted
by people all over the world. And they were one of the leaders
in electrical engineering in theworld.
So they didn't get killed by theby all of this.
But it's definitely, you know, they they have to, they have a
website. They have a page on their

(15:07):
website that talks about like, hey, this happens.
Yeah, also. Well, I feel like you do got to
address it. Some people.
Don't Yeah, I think I do think it's the right thing to address
it though, when you're like, hey, I fucked up and it's.
Like Celestial T Google it. Siemens on that same web page
though does say that since the war they have donated over 150

(15:30):
million to support victims of the war, but it will always be
obviously a stain on their. Reputation.
That they were complicit in this.
In the 1950s, they got into the computer craze, manufacturing
semiconductors. They also started to produce
more home electronics such as washing machines, and they even

(15:52):
branched out into medical devices at this time, producing
pacemakers. They got in early on Advanced
Micro Devices, also known as AMD, which is one of the main
producers of the computer equipment or of computer
equipment, including CPUs and GPUs.
And they've even been beating Intel recently, who has kind of
dominated that space for a while.

(16:13):
I think in like 1977, Siemens bought like a 20% stake or
something in AMD, and I'm sure they made a lot of money from
that. They truly expanded into so many
areas that it is impossible to list what they do today, but
they're primarily known for making electric trains,

(16:33):
industrial energy components, industrial automation, building
the like machines for industrialautomation, as well as medical
devices such as CT scanners. They do that as well.
They kind of do a lot of very wide-ranging industrial medical
devices. All of this is what allowed them
to grow to that peak in the early 2000s of employing more

(16:55):
than 400,000 people and operating in 191 countries.
But when foreign bribery became illegal in Germany in 1999.
All good things have to come to an end.
I know, right? Come on.
Also 1999 is. So late is really late.
Most other people had like anti bribery legislation by the 70s.

(17:18):
Yeah, they're at least 20 years late.
And after the Siemens was listedon the New York Stock Exchange
in America, they moved from the German, I think the Frankfurt
Stock Exchange to the New York Stock Exchange in 2001.
This meant they were going to beheld to a higher standard of
financial operation. And this got doubled after

(17:39):
Enron's collapse. And the fallout of that
generated the Sarbanes-Oxley Act, which we talked about in
our Enron episode. But you can't teach old company
new tricks, all right? And they were soon smack dab in
the middle of today's meat and potatoes scandal of the episode,

(17:59):
I guess like worst in sauerkrautscandal, whatever German
equivalent of meat and potatoes is.
They like meat and potatoes. That's like their whole thing.
They. Got potatoes too, yeah?
Do German potato salad. Why do you say that?
Like it Like I would be like, oh, you know what you're.
Right, you've never had it. I don't know, maybe I haven't

(18:22):
didn't. Notice.
God, German potato salad is so good.
I thought German food is very just bland.
It is but most German. Most white people food.
Is just bland, but German potatosalad is very good and they have
good strudel. The Germans.
OK, strudel that slap. That's true.
Yeah, Cherry strudel. Oh fuck me up.
It is good. So you may or may not remember

(18:42):
that the 2004 Summer Olympics returned to their hometown of
Athens, Greece. Yeah.
What you'll definitely remember is that 2004 is after 1999.
Yeah, which means that Siemens would be in a lot of trouble if
allegations that they bribed Greek officials to gain

(19:03):
contracts related to the Olympics were true.
Supposedly up to €100 million worth of money changed hands so
that Siemens Telecommunications Security Systems were purchased
leading up to the Games in the late 1990s.
As they got ready for the 2004 Summer Games, the Greek
prosecution started an investigation after rumors were

(19:25):
circling. And after two years, in 2008,
they brought charges, not against any like 1 entity for
the crime at large of not against anyone entity, but for
the crime at large of money laundering and bribery, which is
apparently something you can do in the Greek justice system.
They can just bring the charges and then say anyone who was
involved in this can now go to trial because we deemed that

(19:48):
this happened. It was weird.
I don't know. In the end, 64 individuals were
accused of taking part in the scandal, including Tasos
Mantelis, the. That just sounds like a child of
Elon Musk. Tasos Mantelis?
I think it's just Greek dude. Anyway, no, Tasos Mantelis was
the former minister for Transportation and
Communications for Greece who received donations of almost

(20:11):
half a million German marks put into his bank account in the
late 1990s, although he said only 200,000 were from Siemens
and purely for political donations to his campaign.
Who else is sending you hundredsof thousands of German marks to
your bank? Account not in the math.
Not math. After they already sent you
some, you have another German company that's coming in, that's

(20:34):
getting into your bank DMS and sending you hundreds of
thousands of German marks. Yeah, I don't think so.
All right, so Siemens, it also did not look any more innocent
when their chief executive in the country fled to avoid arrest
in 2009 either. So doesn't look good for you.
Siemens did settle with Greece in 2012, agreeing to fork over

(20:55):
€330 million in relation to the bribery scandal, but Greece went
ahead with a trial against the individuals.
Five years later. I I don't know what's going on
in their justice system, but thetrial did.
Not start pushed back all the time, yeah.
It didn't start until 2017 I. Was like wait for for what
happened in 2004. It was the 2004 Olympics, and

(21:18):
then they did like. Oh, then they did it.
Took a little bit to come out and then they did a two year
investigation. So in 2008 they did the OR yeah,
2008 they did the charges. 2009 The chief executive in Greece
for Siemens fled, and then the trial didn't start until 2017.
Jesus. So yeah, I don't know.
Mantelis was sentenced to an 8 year suspended sentence, so I

(21:42):
don't think he ever actually went to prison for his part.
But the Siemens official who fled has not faced any
repercussions in Germany. He didn't get charged with
anything in Germany and they have continued to refuse to
extradite him to Greece to face trial there.
But they've been trying to get him back.
They're like, no, we want to tryhim.
And they're like, Nah. They won't extradite him.

(22:04):
Interesting. This example, though, is only
part of the large operation of foreign bribery that was going
on at Siemens, but it was the one that brought the company
under scrutiny in many countriesacross the world.
The governing body of Siemens was a group of nine individuals
comprising the corporate executive committee known as the
ZV, which is short for two German words.

(22:26):
I won't subject you to because I've already subjected you a
bunch of other very mispronounced German words.
And they had known that policiesregarding bribing foreign
officials had changed in Germany, and that their listing
on the New York Stock Exchange also made them subject to
America's Foreign Corrupt Practices Act, which expressly

(22:47):
prohibits public companies in America from bribing foreign
officials. They knew this, so the ZV did
their due diligence and they released multiple memos to the
company that I'm sure everyone read thoroughly and also took
very seriously. You know when you get a a memo
in your? Outlook septic terms and
conditions. Yes, I read the memo.

(23:09):
You got a memo in your outlook and you're like, yeah, sure.
I don't even use Outlook. Especially because it just
reiterated that everyone workingat Siemens must abide by laws
and regulations. It's basically just like, hey,
those laws and regulations that.You're subject to.
Make sure you do that. But they never really put
company wide restrictions on or rules on relations of their

(23:32):
businesses or their subsidiarieswith other businesses and
business dealings with foreign officials.
They just said abide by laws. You guys know what that means?
And they were like, well, business is different in every
single we're multinational, it'sdifferent everywhere we work.
But they want it hand down just rules that say like do not take,

(23:54):
do not bribe officials. They would not do that.
They just said abide with laws. And many people would say that
this this lack of making definitive rules for bribing
foreign officials was on purposeso that they could continue
bribing their way into favorablegovernment contracts.

(24:14):
And by some people, I mean the SEC and the Department of
Justice. After the Greek bribery scandal
broke, German officials started looking into the business
practices of Siemens a little more carefully and in November
2006 they conducted multiple raids on Siemens offices and the
homes of their employees. After the raids happened, the ZV

(24:37):
kind of knew they were going to be cooked and pulled an
incredible move of announcing a large scale internal
investigation into the affairs of their business subsidiaries
and they even hired an external third party to conduct it.
Siemens then used these reports to both comply and actually
provide more evidence to the SECand Department of Justice

(25:00):
regarding quite a few instances of large scale bribery that was
going on. Siemens was funneling money to
government officials in multiplecountries, including but not
limited to Iraq, Nigeria, Argentina, Venezuela,
Bangladesh, and Italy. It was such a common practice to

(25:24):
bribe officials that multiple locations actually had a cash
desk in their office where employees who needed cash for a
bribe would just go down to the cash desk and they would pull
out up to $1 million of off bookcash that was that was obscured
through a variety of means on their balance sheet.

(25:47):
So we won't go into all of thesebribery scandals, but I do.
I've collected some of the hits for ya.
All right, hit #1 Siemens exploited the oil for food
program that was set up to allowthe Iraqi government to sell oil
only to raise money for humanitarian expenses that

(26:09):
benefit average Iraqi citizens. This policy was set up by the
Clinton administration in 1990, in 1995, and was set up in
response to criticism that U.S. sanctions imposed on Iraq were
inordinately affecting average citizens and making their lives
worse just because we were having issues with the country
as a whole. But the oil for Food program was

(26:33):
largely used as a vehicle for corruption until it was
discontinued in 2003. The Iraqi government didn't want
to sell or didn't want all of the money from their oil to go
to food and medicine for their impoverished citizens.
No. Why wouldn't?
They needed to buy Lambos, so they asked for a 15% kickback on

(26:56):
all deals done through the program.
But since a lot of the deals were subsidized by the US, the
companies doing the deals, including Siemens, just tacked
on the 15% to the invoice falsely and presented that to
the government and they had Uncle Sam pay that extra 50%
bribe to Iraq. Then they funneled that 15% cut

(27:19):
through consultancy fees to Iraqi government consultants and
officials who got them the contract in the 1st place.
Overall, Siemens was allotted $80 million worth of contracts
through this program and paid atleast just under $1.8 million in
the form of kickbacks and earnedA hefty profit, somewhere around

(27:43):
$38 million if I remember correctly.
OK. Well, that's a good return on
investment, yeah. They're only going to bribe
people if they're making a lot of money.
Right, right. They won.
That's hit number one hit #2 they won a $1 billion contract
with the Argentinian government to help replace their identity
booklets with ID cards in 1998 and paid just under $16,000,000

(28:09):
to government officials for the opportunity.
And in total, just under $90,000,000 were sent to
Argentinian consulting groups for unknown reasons.
Between 1997 and 2007, hit #3 Siemens was awarded multiple
contracts to design and build rail transit systems in
Venezuela. And between 2001 to 2007, the

(28:32):
local branch paid at least just under 19,000,000 to more
consulting firms in Venezuela. They also were found to be using
post it notes like so they wouldhave to sign approvals for these
payments to be made. And instead of assigning the
like signing the actual paper and leaving a paper trail of who

(28:54):
approved it, they would sign a post it note and it'd slap it on
there, post it note on there. And they'd be like, all right,
it's approved. And then they'd take the post it
note off. Oh my God, that's funny.
So they found them doing that ona lot of these to get them to
go. And that would allow these
payments to either go out sometimes directly to government

(29:15):
officials. They were like using offshore
like slush fund accounts in Liechtenstein and like, I think
also Switzerland, like those places that you have those
offshore accounts and they wouldsend them directly to the
government officials or they would send them to like, like
governments usually have like government consulting firms.

(29:37):
They send it there and then the consulting firm would just
funnel it to whoever. Also Venezuela and Argentina.
Very famous, very corrupt. Yes, very much so.
Very much so. So, yeah.
Another hit that helped sink theship actually is that the
Financial Times reported in 2003that Siemens had paid €6 million

(29:57):
through off book accounts once again in Liechtenstein to Milan
based Italian energy company Enel.
This report is what initially sparked the German investigation
and the subsequent raids. In an internal meeting, a
Siemens executive made this statement in the Enel case.
The investigation Frankfurt chief prosecutor said to a

(30:20):
counsel for the defense of the former Siemens employees that he
considered the Siemens compliance program to exist only
on paper. I think I kind of feel like
we've all worked a job where thecompliance really was just on
paper, like nothing else was followed, especially at a
restaurant. Yeah, like there was a document
that said not to do something. Yeah, they told us not to smack

(30:42):
each other's butts, but we all did it.
I asked you to stop so often. You liked it?
Liked it when I got a whole handful and just squeezed it a
little bit. Too real.
Too real, because you know I'm carrying fucking cake back.
There you are got a cause. Sean's got a dumpy.

(31:03):
He is dragging that wagon. I.
Was known for it. I had a nickname, So what?
Was your nickname. Not a Grande, It means big ass
cheeks in Spanish. Oh yeah, it was his nickname at
the restaurant we worked at. Hell yeah, bro.
So I was, I could throw it back.I'm like the I'm like the Nicki
Minaj of white guys. Yes, you are.

(31:24):
You can put that, you can put that on my gravestone.
In the Nicki Minaj of white men.Put it on my gravestone.
Overall, the investigation concluded that between 2001 to
2007, Siemens had made a bit under $1.4 billion in payments,
805.5 million of which were for corrupt payments to foreign

(31:47):
government officials, which is more than half.
It's like 57% Reinhardt Sikashek.
I think that's a Polish name, soI'm really sorry.
Who was an executive in the telecommunications team, came
forward in the investigation andsaid that he personally managed
A bribery budget of $50,000,000 in a year up to $50,000,000 in a

(32:10):
year, just just for bribes. They're like, this is the
allotted bribery budget. So, you know, don't spend it all
in one place. You know what's so crazy?
I do know some friends who work for some companies who have
something like this in place. We've increased our, our
bribery, our bribery budget 11% year over year, you know,
aligned with inflation, so. We've got to.

(32:32):
You've got to work with inflation.
My God. Some executives, however, did
did face music in the courts forthis, which is nice, including
two that were convicted related to the the an old bribery case.
But largely the fallout was hundreds of millions of dollars
in fines from multiple differentgovernments.

(32:54):
In the wake of the investigation, the Department of
Justice personally slapped them with a $450 million fine, which
was far less actually than they proposed a multi billion dollar
fine they originally going for. They originally mentioned fines
of $5 billion. I mean with what they made and
like, you know, over time and everything, I mean, 400, I know

(33:16):
450 million's a lot of money, but it really isn't like like
they could pay it. Well, that's the thing.
They had actually drastically reduced it because Siemens had
cooperated so much with the authorities by the time the
sentence was handed down in 2008that they were kind of like
honestly, they they hired A corruption executive and they

(33:37):
said that they were going to retain the the corruption, the
anti corruption team for at least the next four years.
They pretty much fired all of their upper level management.
They, we implemented these like amnesty programs where if people
in the company came forward and gave them the evidence and told
them what was happening, that they wouldn't face immediate

(33:58):
expulsion from the company because they were like, it's
kind of like our fault. It's like an over we didn't have
oversight kind of thing. So they they get, they get a lot
of hype in this for being like they did kind of.
All right, You guys followed therules.
They. Did kind of a good job, but
between all of the fines they racked up between multiple
different governments, they owed$1.6 billion, which at the time

(34:22):
was the largest fine of any company at the time.
This barely slowed down Siemens though, as they reported a net
revenue of almost €76 million last year, net income of €9
billion and still employ 327,000people.
Although they did delist their stocking their stock from the

(34:45):
New York Stock Exchange in 2017,moving back home to Frankfurt,
citing low trading volume and wants to simplify their
reporting requirements. Siemens continues to be one of
the largest companies in Europe,still in the top 50.
So Siemens is a really good example of what to do when

(35:09):
you've done something you shouldn't do.
Although their motivation, although their motivation behind
launching the internal investigation into their
practices is questionable because it was already after
they were under pressure, they still did it.
I wish more companies would own up to their actions and face the

(35:29):
music rather than pointing fingers and denying in a face of
mountains of evidence like we'veseen time and time again.
Siemens has an incredibly checkered past littered with
bribery and war crimes, but at least you can say that they put
a decent foot forward into the future.

(35:51):
So I'm just putting it out there.
I don't want to hear anything else about Siemens moving
forward on this podcast. Stay in your lane, keep walking
the line so I can keep your nameout my God damn mouth.
You hear me? I don't want Siemens in my mouth
anymore. No more Siemens in my mouth.
Speak for yourself, OK? Speak for yourself.

(36:13):
If you want to talk about it more on the podcast, that's
fine. I will talk about Siemens in my
mouth any day of the week anyway.
That's it for this week. About as much flair in what they
were doing as you would expect from a German accounting
scandal. That's actually not true because
when we did wire card that, thatstory was actually crazy.
And that story. That was that was a German

(36:35):
accounting scandal. So sometimes they, you know,
they know how to do it with flair.
But this one, it just bribed people a lot.
It was crazy to learn like how OK Germany was with it for a
while, though. They're like.
Yeah, they did not care. Oh.
Yeah, who cares? We've bribed some foreign
officials. That's fine.
They're like, it's OK, it's not a big deal.
As long as it gives us an advantage, yeah.

(36:57):
So yeah. Yeah, so thank you guys so much
for listening. If you liked what you heard,
right? And you're like, damn, I want to
hear more, more, more German accounting scandals, please.
You can go ahead and support us by leaving us a review.
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(37:18):
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That's cool. Like 56% I.

(37:40):
Was like, I did not know that, that's cool.
Hell yeah, Crush. Hell yeah.
Women power. Girl power.
Nevertheless, she persisted. You like my feminist reference
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So Deshawn supports the 19th. You can also leave a review on
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We're not ignoring you guys. We know you're there.

(38:01):
We also love you. But you can leave a star review
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And if you're on any of those other satellites, look at you
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(38:23):
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(38:46):
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And while you're there, why don't you click that button that
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(39:08):
'S got. Someone's got our logo on it.
Please do Me and Nina acted in ashort film.
We did. That's going to come out on May
9th on Pixquid. We sure did.
PIXQUID, you can go on there. I don't know how much it's going
to cost to watch. I think you have to pay like a
dollar or something to watch it.A dollar to see me be pregnant

(39:31):
by Keshawn. And me look about as pregnant as
I normally do so. Keshawn got me pregnant in this.
Yeah. So it's fiction, obviously, but
yeah, feel free go. Might as well shut that out.
Shut that shout out. Shout.
I said chat like 3 times in a row I'm.

(39:52):
Gonna shut that out. Yeah, just shut that out
whenever you can. But yeah, feel free.
Go watch that. It's called Freudian Slip.
Tell a friend. There we go.
There's another one. The best way to spread the good
word of the podcast is to hit the ground like a Mormon
missionary. Go knock on doors in your
neighborhood and say, excuse me,have you heard the good word

(40:13):
that is white Collar's red hands?
They're not the Messiah, but I'mnot.
But gosh, are they entertaining.So here is it cool if I play you
someone this beat speaker I carried around with me.
Let's listen to just the first 3episodes and we'll see if you
feel free go do that. Spread the spread the good word.

(40:34):
And I think that's. I think that's it.
That's it. All right, Well, I love how we
end every episode. That's it, that's it.
So fucking trophy. Anyway, thank you guys so much
for listening, and we'll see younext week on another episode of
White Collars. Red hands.