Corruption in Greece (I)

ATHENS/BERLIN (Own report) – The Greek government does not exclude the eventuality of indictments of German companies on charges of corruption, according to recent reports, on a contingency plan Athens has prepared for the event that Berlin forces it into state bankruptcy (“Grexit”). According to this plan, Athens would try to bring German companies to court – who have not or have only partially been subject of bribery investigations – to have them pay at least part of the restitution for damages caused by the alleged corruption, officially estimated in the billions. Siemens is the most famous example. A Greek parliamentary investigating committee estimated that, through systematic bribery, this Munich-based company has caused damages of two billion Euros in Greece. However, Siemens got off cheap in an out-of-court settlement and had to pay only 270 million Euros – hardly one fifth of its current quarterly profit. A court in Munich gave a Siemens manager a suspended sentence – significantly less than what he could have expected from a trial in Athens. Already in the fall of 2014, new legal proceedings had been opened in Athens to comprehensively investigate this systematic corruption.

Contingency Plan

The Greek government does not exclude new corruption indictments targeting German companies, according to recent reports on a contingency plan Athens has prepared for the event of state bankruptcy. The plan includes investigations targeting German companies such as Siemens, Lidl or Hochtief.[1] For years, German companies’ corruption in Greece has been notorious, even though only some cases have ended in trials, sentencing and out-of-court settlements. The plan to initiate new legal proceedings is based on the hopes that German companies will pay at least selective reparations for the billions in damages caused in Greece by alleged bribery.

At the Expense of Taxpayers

The case involving Siemens is probably the largest among Greece’s cases of corruption by German companies. It has been discovered that since the late 1990s, Siemens has used bribes to secure lucrative contracts, including the digitalization of the Greek telephone network and the establishment of a monitoring system for the Athens Olympics in 2004. This monitoring system was aimed at testing a new type of “anti-terror” technology. Even though it was not operative on time, it flushed considerable profits into the company’s coffers.[2] The telecommunication contracts had been particularly attractive because Greece did not ask to renegotiate prices, although the prices in this sector were halved every three to four years, experts estimated. Therefore the telecommunication company OTE had at least €57.4 million in damages.[3] As in similar cases, Greek taxpayers had to pay for the bribes. “Whoever uses bribes for government contracts, can add a couple million more to his margin,” explained an investigator of these procedures. “It’s at the expense of taxpayers, who have to pay for the excessive prices.”[4] In 2010, a 2,000-page report by a Greek parliamentary investigation committee estimated the damages caused to the Greek population by Siemens to be at €2 billion.[5]

“The Greeks only Want Money”

In Greece, anger is still livid over how cheap Siemens and its manager could escape the consequences of the affair. Critics, for example, point out that the German company – unlike the stipulations of the 2012 out-of-court settlement – had not invested the 100 million Euros in Greece, to help stimulate the economy of that country, but rather used the money for the recapitalization of its existing Greek companies. Notwithstanding, in November 2014, the prosecutor’s office in Athens brought indictments on 64 individuals, including numerous managers of Siemens, such as the former board director Heinrich von Pierer. They are being charged with bribery, and money laundering in transactions with the Greek OTE telecomunication company. Siemens circles have reacted with indignation. “That is illegitimate,” complained a Siemens defense counsel. “The Greeks only want money.”[8] As a matter of fact, not the Greeks, but the managers of Siemens are the ones, who only wanted money, when they used bribes to obtain the lucrative double-digit million Euro contracts in Greece.

Full article: Corruption in Greece (I) (German Foreign Policy)

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