Former Siemens Manager Admits Slush Funds

Former Siemens AG executive Reinhard Siekaczek told a Munich court on Monday that he built a system of slush funds at the company in a bid to disguise that cash was used to bribe customers.

Reinhard Siekaczek, 57, is charged with 58 counts of breach of trust. Prosecutors allege that he set up a complex network of shell corporations that he used to siphon off company money over several years. The money allegedly was used as bribes to help secure contracts abroad by paying off would-be suppliers, government officials, potential customers.

“The whole sectoral management was naturally informed that this function was carried out by me,” he told the Munich state court. “Naturally it was known to me and everyone that we pay commissions to secure orders,” he said.

Siekaczek said he used a system of phony consultant contracts in order to generate money for commissions. “I saw no other possibility,” he said.

The defendant said he did not receive bonus payments for his actions.

Breach of trust carries a maximum possible sentence of five years in prison. The trial is scheduled to last through July.

Siemens has acknowledged dubious payments of up to $2 billion in the wider corruption case uncovered last year.

The company, which makes everything from wind turbines to trams, agreed in October to pay a $317 million fine to bring an end to some legal proceedings in Germany related to the scandal.

Siemens’ own investigation has found evidence of violations across the company and in several countries.