Page 14 - CORRUPTION LATAM

MONTT GROUP MAGAZINE - 2024
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scandals in the history of global business broke out. Something like a European Lava Jato, but with global ramifications, towards the East and Latin America. Then it was discovered that the electronic giant Siemens organized, for years, international corruption networks to obtain million-dollar contracts in countries such as Argentina, Germany, the United States, Spain, Russia, Iraq, China, Mexico, Vietnam, Nigeria, Israel, Venezuela and Bangladesh. It was so serious that the company, to prevent its executives from going to jail en masse, had to pay large fines of US$2.8 billion.
according to some experts, What happened in argentina is a good exampLe to see hoW three concepts operate in practice: bribes, coLLusion and the coLLoquiaL pantoufLage, or revoLving doors, in the sense that a senior officiaL of the government is Later integrated into the private company With positions of responsibiLity.
The German consortium, with almost half a million employees around the world, went through one of its worst moments during the investigation that was carried out, when some 200 police officers, prosecutors and tax inspectors showed up with search warrants at 30 Siemens headquarters in Germany and Austria, as well as in the private homes of executives in search of evidence about the black boxes that the consortium maintained in several countries to bribe more or less covertly to secure contracts.
Regarding its way of operating in Latin America, specifically in Argentina, in 1991 during the presidency of Carlos Menem, the Government reached a preliminary agreement with a French company So.Fre.Mi, for the renewal of the identity documents of Argentines, for an amount of seven dollars each, which in the end was not executed. Years later, the Argentine Government put out to tender for an amount of US$ 1.3 billion a package that included the printing of these documents and the computerization of border
crossings and electoral rolls. This is how in 1996 three groups participated in this tender: Siemens, Itron and Ivisa.
Two Argentine justice ministers resigned to join Siemens as advisors and, against all odds, this company was awarded the contract in 1998, even though technical assessments had previously been received that highlighted that the company had no experience in bidding and failed to comply with seven of the 16 points of the technical analysis when another of the bidders, Itron, covered all the parameters.
Siemens’ economic offer had a cost of $30 for each document against the seven initials of the French company So.Fre.Mi. It is true that seven years had passed, but, even so, some think that the price increase of more than 400 percent was not justified.
In 1999, Siemens incorporated one of the other companies that participated in the tender into its organizational structure, which exposed a second corruption plot when suppliers had agreed to raise prices and subcontract to provide the service (collusion).
The third bidder in question never challenged the process and Siemens went so far as to buy up to 60 percent of that company for an amount that tripled its market value, as compensation for the non-challenge.
bribery Millionaires
In 2008, Siemens bribed public officials worth US$2 billion in more than 300 contracts in nine countries: Venezuela, China, Israel, Bangladesh, Nigeria, Vietnam, Russia, Mexico and Argentina. The corruption plot was articulated by Siemens issuing invoices to ghost companies in Amsterdam, Switzerland, Dubai, Hong Kong, Miami, Panama, Cayman Islands, Virgin Islands, Bahamas, New York and Uruguay, for services that were never provided and that were executed through intermediaries. Finally, in 2013, the Argentine justice system prosecuted 17 Siemens
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