The names are everyday corporate names in Germany, massive companies controlling huge market shares at home and abroad— Siemens, Daimler, Rheinmetall and all three are under investigation for what is being called “the greatest corporate scandal in Greece’s postwar history.”
No date has been set yet for 19 former executives of German engineering group Siemens to appear in Greek court, but it is expected to be one of the biggest financial trials of the decade in Greece, according to an AFP report.
Dozens of people believed involved both in Greece and Germany are being investigated.
Bavaria-based Siemens, whose links to Greece go back to the 19th century, is suspected of having greased the palms of various officials to clinch one of the country’s most lucrative contracts — the vast upgrade of the Greek telephone network in the late 1990s.
Of course, this is nothing new for the German company which one watchdog group once said “at Siemens, bribery was just a line item” after being slapped with a fine of $1.6 billion by the United States federal government in 2008.
From the Securities and Exchange Commission ruling:
The Securities and Exchange Commission [on December 15, 2008] announced an unprecedented settlement with Siemens AG to resolve SEC charges that the Munich, Germany-based manufacturer of industrial and consumer products violated the Foreign Corrupt Practices Act (FCPA) by engaging in a systematic practice of paying bribes to foreign government officials to obtain business.
Siemens has agreed to pay $350 million in disgorgement to settle the SEC’s charges, and a $450 million fine to the U.S. Department of Justice to settle criminal charges. Siemens also will pay a fine of approximately $569 million to the Office of the Prosecutor General in Munich, to whom the company previously paid an approximately $285 million fine in October 2007.
Greece is just a small part of Siemens’ global web of bribery, but in a small economy such as Greece, the implications are staggering.
Overall, Greek judicial sources claim that Siemens allegedly spent €70 million ($78 million) on bribes in Greece to win lucrative business contracts.
Earlier this year, Greece’s combative parliament speaker Zoe Constantopoulou said the affair smacked of double standards on the part of Berlin.
“This is a question of justice that shows there is doublespeak by Germany,” she told France’s Liberation newspaper in a recent interview.
“German companies have notoriously engaged in corrupt practices in Greece but such cases are only occasionally investigated,” the German Foreign Policy think-tank said in a recent report.
In 2011, at the height of the Greek economic crisis, a parliamentary inquiry estimated the damage to public coffers at two billion euros from inflated contract costs ultimately borne by taxpayers.
Arms procurement has been another lucrative field for German companies, with Greece for years spending the most money proportionately on defense — 2.2 percent of gross domestic product (GDP) in 2014 — among EU members, Sahra Wangenknecht, a lawmaker of Germany’s leftist party Die Linke, told AFP.
“German companies have reaped considerable profit from Greece’s colossal arms purchases,” Wangenknecht said.
For automaker Daimler, Greek justice opened an investigation earlier this year on suspicion of bribery in the award of an €100-million military vehicle contract.
Krauss Maffei Wegmann, the makers of the German Leopard tank, was also placed under investigation in Munich.
Meanwhile, fellow defense contractor Rheinmetall in 2012 was fined 37 million euros by a court in Bremen, Germany, over a bribery case involving the sale of its anti-aircraft defense system for €150 million.
And two former managers at industrial services provider Ferrostaal were also convicted in Munich of shady payments to clinch a Greek submarine order, with the company fined €140 million.
