Siemens 2010 Annual Report Download - page 272

6 To our shareholders 21 Corporate Governance 49 Combined management’s discussion and analysis

 – Legal Proceedings
Public corruption proceedings
Governmental and related proceedings
Public prosecutors and other government authorities in juris-
dictions around the world are conducting investigations of
Siemens and certain of our current and former employees re-
garding allegations of public corruption, including criminal
breaches of fiduciary duty such as embezzlement, as well as
bribery, money laundering and tax evasion, among others.
These investigations involve allegations of corruption at a
number of Siemens’ business units.
On December , , Siemens announced that legal pro-
ceedings against it arising from allegations of bribing public
officials were concluded on the same day in Munich, Germany,
and in Washington, DC. The Munich public prosecutor an-
nounced the termination of legal proceedings alleging the
failure of the former Managing Board of Siemens AG to fulfill
its supervisory duties. The investigations of former members
of the Managing Board, employees of the Company and other
individuals remain unaffected by this resolution. In Washing-
ton, DC, Siemens pleaded guilty in federal court to criminal
charges of knowingly circumventing and failing to maintain
adequate internal controls and failing to comply with the
books and records provisions of the U.S. Foreign Corrupt Prac-
tices Act (FCPA). In related cases, three Siemens foreign sub-
sidiaries, Siemens S.A. (Argentina), Siemens Bangladesh Ltd.
and Siemens S.A. (Venezuela), pleaded guilty to individual
counts of conspiracy to violate the FCPA. At the same time,
Siemens settled a civil action against it brought by the U.S.
Securities and Exchange Commission (SEC) for violations of
the FCPA. The agreement reflects the U.S. prosecutors’ express
recognition of Siemens’ extraordinary cooperation as well as
Siemens’ new and comprehensive compliance program and
extensive remediation efforts. Based on these facts, the lead
agency for U.S. federal government contracts, the Defense
Logistics Agency, issued a formal determination that Siemens
remains a responsible contractor for U.S. government business.
Under the terms of the plea and settlement agreements
reached in the United States, Siemens has engaged Dr. Theo
Waigel, former German federal minister of finance, as compli-
ance monitor to evaluate and report, for a period of up to four
years, on the Company ’s progress in implementing and operat-
ing its new compliance program.
In the fourth quarter of fiscal , the Company accrued a
provision in the amount of approximately € billion in connec-
tion with the discussions with the Munich public prosecutor,
the SEC and the United States Department of Justice for the
purpose of resolving their respective investigations. Cash out-
flows relating to the fines and disgorgements referred to above
during the first quarter of fiscal  amounted to €. billion.
As previously reported, in October , the Munich public
prosecutor terminated a similar investigation relating to
Siemens’ former Communications Group. Siemens paid € in
connection with the termination of this investigation. This
brings the total amount paid to authorities in Germany in con-
nection with these legal proceedings to €.
As previously reported, the public prosecutor in Wuppertal,
Germany is conducting an investigation against Siemens em-
ployees regarding allegations that they participated in bribery
related to the awarding of an EU contract for the refurbishment
of a power plant in Serbia in . In April , the public
prosecutor discontinued the investigation.
As previously reported, Siemens Zrt. Hungary and certain of its
employees are being investigated by Hungarian authorities in
connection with allegations concerning suspicious payments
in connection with consulting agreements with a variety of
shell corporations and bribery relating to the awarding of a
contract for the delivery of communication equipment to the
Hungarian Armed Forces.
As previously reported, the Vienna, Austria, public prosecutor
is conducting an investigation into payments between 
and  relating to Siemens AG Austria and its subsidiary
Siemens VAI Metal Technologies GmbH & Co. for which valid
consideration could not be identified.
As previously reported, authorities in Russia are conducting an
investigation into alleged misappropriation of public funds in
connection with the award of contracts to Siemens for the
delivery of medical equipment to public authorities in Yekater-
inburg in the years  to . Siemens is cooperating with
the authorities.
As previously reported, in August , the Nuremberg-Fuerth
public prosecutor began an investigation into possible viola-
tions of law in connection with the United Nations Oil-for-Food
Programme. In December , the public prosecutor discon-
tinued the investigation with respect to all persons accused.
As previously reported, the Sao Paulo, Brazil, public prosecutor
conducted certain investigations of Siemens relating to the use