By Douglas Gillison, 100Reporters
Two years after being charged with participating in a massive bribery scheme, the former chief financial officer in Argentina for the German engineering giant Siemens AG has reached settlement terms with the U.S. Securities and Exchange Commission, according to court papers.
Andres R. Truppel, who served as Chief Financial Officer at Siemens Argentina from 1996 to 2002, was one of a total of nine individuals charged by the SEC and Justice Department in 2011 for their alleged roles in a scheme to bribe top officials in that country to win a $1 billion contract for the sale of national identity cards.
After failing to respond to both the Justice Department and SEC, Truppel has retained attorneys and reached settlement terms in principle with SEC attorneys, the commission said in a Nov. 16 court filing.
Over the life of the scheme, which spanned two Argentine governments, more than $100 million in bribes were paid to Argentine officials “up to and including the President of Argentina and Cabinet ministers,” according to the SEC. Former president Carlos S. Menem has reportedly denied the allegations. His successor, Fernando de la Rúa, stood trial in an unrelated corruption matter this year.
U.S. authorities say Truppel played a key role in relaying Argentine officials’ demands for bribery and in negotiating illicit payments in meetings held in Miami and New York.
The 2011 charges stem from the joint U.S.-German prosecution of Siemens (SI) in 2008 in which the company pleaded guilty to paying bribes in more than 20 countries around the world and paid $1.6 billion in disgorgement and fines to authorities in Munich and Washington — the largest such settlement to date.
The Foreign Corrupt Practices Act provides both criminal and civil penalties for the payment of bribes to foreign officials to win business.
The 2011 charges represented an effort by the U.S. government to hold individuals to account following criticism that corporate prosecutions had primarily resulted in negotiated settlements with companies.
However the individual prosecutions have achieved mixed results. The SEC appears likely to reach three settlements, including Truppel’s, and to win default judgment against two others. A federal judge in February dismissed charges against another defendant on jurisdictional grounds and the SEC withdrew its complaint against a seventh in October.
Truppel, a dual German and Argentine citizen, is so far the only Siemens defendant to retain attorneys in response to the separate criminal charges brought by the Justice Department.
Germany in most cases does not extradite its own citizens but Truppel faces extradition from Argentina, where media reports say he is appealing against a court order for his transfer to the United States.
Truppel has retained former New York prosecutors Arthur D. Middlemiss and David G. Liston, currently in private practice, to represent him in both the SEC and Justice Department matters.
Middlemiss entered private practice earlier this year after serving as the head of anti-corruption compliance at JP Morgan Chase & Co., a company now at the center of a widening U.S. probe of bribery allegations in East Asia. Middlemiss declined to comment on Tuesday.
Since reaching its landmark 2008 settlement with U.S. and German authorities, Siemens has continued to face allegations of corruption.
The company voluntarily notified Brazilian authorities this year that it may have paid bribes to win contracts related for the construction and upkeep of the São Paolo subway system.
Siemens is also facing legal action from Liu Meng-lin, a purported whistleblower in China who alleges that he was fired after internally complaining that the company had knowingly undermined anti-corruption policies — created as a result of the 2008 settlement — to bribe officials in China and North Korea.
The new allegations arose as Siemens touted its new internal compliance controls. As part of the settlement, the company agreed to hire former German Finance Minister Theo Waigel as an independent compliance monitor for four years to evaluate the company’s anti-corruption efforts.
The Justice Department said in December last year that Siemens had satisfied its obligations to cooperate with Waigel, who reviewed the company’s operations 39 countries, including some on-site inspections.
The terms of Truppel’s settlement, which have not yet been disclosed, remain subject to approval by the SEC’s five-member commission and by a federal judge in New York.
100Reporters is a nonprofit investigative news organization that reports on corruption, government and corporate accountability.