Saturday, December 27, 2008
Siemens bribes paid through ex-VP's wife's US account- US SEC

By Adeyeye Joseph

The United States' Security Exchange Commission, which investigated global telecommunications giant, Siemens, for using huge bribes to win multi-billion dollar contracts in over 16 countries, has revealed that the bribes were paid into the US bank acoount of a former Vice President's wife.






It also reveals that a former Nigerian President, the former vice-president and his wife were some of the recipients of these bribes.

The SEC said that Siemens, accused of running an "annual bribery budget of about $40 million to $50 million" in 16 countries, gave at least $12.7 million in bribes to Nigerian officials between 2001 and 2006.

These revelations were contained in a US SEC complaint document made public last week when the settlement that the US Justice Department and the SEC reached with Siemens was announced. To reach the settlement, Siemens had to plead guilty to violating accounting provisions of the US Foreign Corrupt Practices Act, which outlaws bribery abroad, and agree to pay a fine of more than $2.6 billion. The amount includes $1.6bn in fines and fees to Germany and the United States and more than $1bn for internal investigations and reforms.

However, the SEC complaint, which Saturday Punch obtained from www. sec.gov only describes the recipients of the bribes. It does not mention their names. The document, which was submitted to Judge Richard Leon of the United States District Court for the District of Columbia on December 15, has the US SEC as the Plaintiff and Siemens as the Defendant.

Officials of the US Justice Department explained, in a statement, that the names, which were given to the judge in a sealed envelope, could not be made public because of what they described as 'privacy laws in several countries' and for the sake of 'the integrity of continuing investigations'. But Lori Weinstein, the prosecutor, said the documents were deliberately left with clues to provide "sufficient clarity" for the court to figure out who was who. For example, the recipient of the bribes that Siemens officials reportedly gave to highly-placed Argentine officials during an identity-card contract is described as a "president of Argentina who left office in 1999;" an indication that former President Carlos Menem, who ruled Argentina from 1989 to 1999, is the recipient.

In Nigeria, in particular, Siemens, the complaint says, made approximately $12.7m in suspicious payments in connection with four projects, with at least $4.5m paid as bribes in projects involving the Nigeria Telecommunications Limited and the Ministry of Communications. According to the SEC, the total value of the four contracts was about $130m.

The portion of the complaint, which gave the recipients of the bribes, says that approximately $2.8m of the bribe payments was routed through a bank account in Potomac, Maryland, in the name of the wife of a former Nigerian vice-president.

"The Vice President's wife, a dual U.S. Nigerian citizen living in the United States, served as the representative of a business consultant that entered into fictitious business consultant agreements to perform 'supply, installation, and commissioning' services but did no actual work for Siemens. The purpose of these payments was to bribe government officials. Other corrupt payments included the purchase of approximately $172,000 (N17.3m) watches for Nigerian officials designated in internal Siemens records as "P." and "V.P.," likely referring to the President and Vice-President of Nigeria."

It says, "The practice of paying bribes by Siemens COM in Nigeria was long-standing and systematic. According to a high ranking official within Siemens Limited Nigeria, a regional company, corrupt payments in 2000 and 2001 commonly reached 15 to 30% of the contracts' value. Bribe payments were typically documented using fictitious business consultant agreements under which no actual services were performed. The CEO of Siemens Limited Nigeria forwarded requests for 'commission' payments to Siemens headquarters in Germany.

"The illicit payments were then made through a number of means, frequently including large cash withdrawals from cash desks that were then hand-carried in suitcases to Nigeria."

The complaint accuses Siemens of creating elaborate payment schemes to conceal at least 4,283 payments, totalling approximately $1.4bn.

"Among the transactions on which Siemens paid bribes were those to design and build metro transit lines in Venezuela; metro trains and signalling devices in China; power plants in Israel; high voltage transmission lines in China; mobile telephone networks in Bangladesh; telecommunications projects in Nigeria; national identity cards in Argentina; medical devices in Vietnam, China, and Russia; traffic control systems in Russia; refineries in Mexico; and mobile communications networks in Vietnam," the document says.

The Siemens bribery scandal caused a stir in Nigeria in October 2007, after a Munich court had found the company guilty of bribing government officials in several countries and fined it 201 million Euros. The court also released some of the names of these officials, including Nigeria's, while blacking out others.

Subsequently, the Federal Government suspended dealings with the telecommunications firm and the Economic and Financial Crimes Commission commenced investigations, but the progress of this probe has not been made public. nothing has been heard of the investigations, while the Federal Government has since gone back into doing business with Siemens without the firm being fined, as was done in the US and Germany.


http://odili.net/news/source/2008/dec/27/411.html

It also reveals that a former Nigerian President, the former vice-president and his wife were some of the recipients of these bribes.

This may be an attempt to dent Obasanjo's image. What is he doing with Siemens bribe when the nation's account was at his beck and call?

Monday, December 29, 2008
Bribery: Yar'Adua under pressure to revoke Siemens contract

By Chiawo Nwankwo, Semiu Okanlawon, Ayo Olesin and Ihuoma Chiedozie

Indications emerged on Sunday that intense pressure was being mounted on President Umaru Yar'Adua to revoke a new contract for the rejuvenation of the nation's power sector which was signed with a German company, Siemens.




The pressure, according to sources, is from some new ministers and special advisers to the President who were said to be striving to maintain a public image that shuns corruption.

This was the fallout of the detailed revelations by SATURDAY PUNCH on how the company allegedly bribed a former Nigerian President, Vice-President, and some other top government officials to secure plum contracts.

The revelation is believed to have sent jitters down the spines of those allegedly mentioned in the deals.

"Although, it happened on a weekend, when the Christmas break had shut down government activities; however, a strong representation was made to the President on Saturday night on the need for the government to revisit the new Siemens power contract, in the light of the new revelations on the Siemens bribery scandal," a source told our correspondent on Sunday.

The source, who is very close to the government, said a number of the new ministers and top aides of the President were concerned about the image of the government and how its profile might be further damaged if it was seen to be unbothered about the adverse effect that courting Siemens might portend.

The Federal Government had, on August 19, 2008 signed the power contract, though it had earlier suspended dealings with the German firm.

The suspension followed the cancellation of a supply contract with the firm based on allegations that it gave more than $14m in bribes to Nigerian officials.

The alleged pressure came just as the Economic and Financial Crimes Commission told our correspondents on Sunday that it was on top of the case.

The commission's Spokesman, Mr. Femi Babafemi, said, "We have never stopped investigating it for a moment. For a matter with such international dimension, we have reached an advanced stage."

The company was found guilty in Germany and fined over $100m. It later tendered an apology to President Umaru Yar'Adua.

Before the apology, however, the Attorney-General of the Federation and Minister of Justice, Mr. Michael Aondoakaa, had said he would go to Germany for assistance on the case file to enable him prosecute the Nigerian officials involved, adding that the entire episode was embarrassing to the government.

Another source told one of our correspondents that the EFCC had, three weeks ago, recorded a breakthrough when a top operations director of the commission travelled outside the country and returned with useful information that could nail the suspected beneficiaries of the bribery.

The director, our correspondents reliably learnt on Sunday, had been instructed to update his files and turn them in this week.

However, before the Federal Government changed its mind on Siemens, nothing indicated that it had lifted its suspension on the German firm.

The contract to Siemens came after talks between the President and German Chancellor, Angela Merkel, were held in 2007.

The projects are expected to inject about 6,500 megawatts of electricity into the national grid between 2008 and 2020.

According to the Presidency, the scope of the power projects covers rehabilitation and implementation to supply water ; problem solving assistance; and capacity building.

Apart from Siemens, other German firms involved in the partnership are EVONIK, ArGe, E.ON and KfW Ipex Bank.

Under the rehabilitation and implementation to supply water category, Siemens is the project lead for the provision of about six units of Small Bonny Light Crude Oil/HFO turbines in Kaduna State by 2010.

The company is also the project lead in the project to add three new turbines and waste recovery boilers/steam turbines at Geregu by 2011 and 2014 respectively.

However, another German firm, ArGe is to serve as the project lead in majority of the projects, including audit and expansion planning at Kainji by 2013.

Other projects to be led by ArGe include feasibility study for small hydro power and engineering projects at Obudu by 2011; feasibility study, planning and implementation for a waste to power project at Kano ; and preparation and tendering/investment and construction for photovoltaic power supply in rural areas at Sokoto by 2010.

ArGe will also conduct a feasibility study for a pilot wind-power plant at Katsina by 2010 as well as solar thermal power at Maiduguri by 2012.

In the same vein, Evonik is the project lead for a grid connection and extension project at Ikot Abasi, as well as audit and rehabilitation study on thermal power stations at Egbin, Sapele, Delta and Afam.

Evonik is also the project lead for a coal-fired power station in Gombe State by 2015.

Another German firm, E.ON is the project lead for the construction of an LNG plant with IPP and gas gathering for domestic use in Akwa-Ibom State by 2014.

Projects under the problem solving category, which are to be led by ArGe and KfW Ipex Bank includes audit of substations, grid bottlenecks and requirements of automatic grid operation in all power stations across the nation between 2008 and 2014.

Also included in this category are projects for the introduction of power communication networks for PHCN and advisory mandates on IPP workshops.

In the capacity building category, EVONIK is to serve as the project lead for implementation of dual vocational training centres and work shops for power plant staff at Geregu, Port Harcourt and Abuja .

The German Ambassador to Nigeria, Mr. Joachim Christoph Schmilliue, and the Nigerian Ambassador to Germany, Alhaji Abdul Rindap, signed the Memorandum of understanding for the partnership on behalf of the two countries.

Yar'Adua had explained that the "original objective of the partnership" was to "address Nigeria's energy challenge while guaranteeing Germany short and long term energy security."

According to him, government's action was informed by its "unwavering commitment to evolving those requisite deliberate, structured policy choices that will enable us rapidly rebuild, upgrade, and expand our critical infrastructure."

The MOU, the President stressed, would be implemented immediately so that the partnership could commence in earnest.

He had said, "I assure you that the Nigerian Government will ensure the speedy implementation of the agreed terms of the MOU.

"I expect that our Energy Council would, in collaboration with our Partners, establish a Joint Secretariat to work out the modalities for operationalising the partnership."

However, reacting to the latest development, the President of the Manufacturers Association of Nigeria, Mr. Bashir Borodo, said that the decision to continue to do business with Seimens was a contradiction of the government's anti-corruption stance.

"It is a contradiction, but we also understand that they apologised and they said they were turning a new leaf. There is also the issue of technology and know-how, but I personally think that maybe the apology may have been a factor.

"We also have to consider that maybe the company is deeply involved in the power sector and government may have paid for services that are yet to be delivered, but the most important thing is that these allegations must be proved and the people involved prosecuted."

Borodo said that in order to avoid situations in future where government paid for hugely inflated contracts due to the culture of graft and kickbacks in the contracts awards process, it must insist on value for money.

He said, "Government must insist on value for money. Contract information should be checked, after all you cannot hide these things. The prices of good and services are well known. You can get everything on the Internet. Even if the information is not readily available, you can contact multilateral agencies such as the World Bank and several United Nations agencies, which can supply the information and tell us how it was done elsewhere and how much was paid."

He said a situation where government officials allowed loopholes in the contract awards process must be addressed.

"If you feign ignorance or allow all these loopholes, then you are also a culprit and should be treated as such," he said.

Efforts to speak with the Minister of Information and Communications, Prof. Dora Akunyili, were unsuccessful as one of her aides told one of our correspondents on Sunday afternoon that she could only be available for comments at 8pm. But repeated calls to her telephone at 8pm were not picked. A text message sent at 8.30pm to her phone was also not replied.

Similarly, the Special Adviser to Yar'Adua on Communications, Mr. Segun Adeniyi could not be reached for comments.

http://odili.net/news/source/2008/dec/29/414.html