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BIG MONEY FOR THE BOYS IN ARGENTINA FOR ID CARDS SYSTEM

Eight former Siemens senior executives and agents have been charged with plotting to pay $US100 million ($99.55 million) in bribes to secure a $US1 billion contract to produce national identity cards for Argentine citizens, in a scam involving a ”shocking level of deception and corruption”, an assistant US attorney general says.

An indictment returned late on Monday in US federal court in New York charged the defendants with conspiring together from 1996 to early 2007 when they worked for the German engineering company.

A former member of the central executive committee of Siemens AG, Uriel Sharef, and two former chief executive officers of Siemens Argentina were among those charged with conspiracy to violate the Foreign Corrupt Practices Act and the wire fraud statute, the Justice Department said. They were also charged with money laundering, conspiracy and wire fraud.

”Today’s indictment alleges a shocking level of deception and corruption,” Assistant Attorney General Lanny Breuer said. ”Business should be won or lost on the merits of a company’s products and services, not the amount of bribes paid to government officials.”

The charges against Sharef marked the first time a board member of a Fortune Global 50 company had been charged in a Foreign Corrupt Practices Act case, Breuer said. He was not in custody on Tuesday and it was not immediately clear who might represent him in legal proceedings. None of the bribe recipients were named in the indictment and none of the defendants is in the United States.

Breuer said it was Justice Department policy not to name people who are not indicted and that the US would work with other countries to bring the defendants to justice.

Seven of the defendants were also charged in a civil case in New York in which the Securities and Exchange Commission accused them of violating the Foreign Corrupt Practices Act. It’s the largest action the SEC has ever brought against people accused of bribing foreign officials, said Robert Khuzami, SEC director of enforcement.

Ronald Hosko, the FBI’s agent in charge of the bureau’s Washington field office criminal division, and Khuzami emphasised the complexity of the investigation, which authorities unravelled with what Breuer called ”extraordinary” cooperation from Siemens, the German engineering company.

”The company is not indicted,” said Alexander Becker, a Siemens spokesman. ”We can’t comment on proceedings against individuals.”

The conspirators committed to pay $US100 million in bribes to Argentine officials and actually paid more than $US60 million, including more than $US25 million laundered through the US banking system, Breuer said.

After the identity card project was terminated, the defendants tried to recover profits they would have gotten from the contract that was awarded to them illegitimately, US Attorney Preet Bharara said.

The SEC said bribes were initially paid to secure the contract to produce national identity cards known as Documentos Nacionales de Identidad for Argentine citizens. According to the indictment, the government of Argentina invited bids in 1994 to create state-of-the-art national identity cards to replace manually created national identity booklets that citizens previously received.

The contract issued to a special-purpose subsidiary of Siemens was suspended and then cancelled after a change in Argentine political administrations, the indictment said.


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