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Investors urge Siemens to quit U.S. Chamber of Commerce over FCPA stances

Thu, 19 Jan 2012 16:20 GMT

Source: trustlaw // Lisa Anderson

A shareholder arrives for Siemens annual shareholders meeting in Munich January 25, 2011. REUTERS/Michaela Rehle

By Lisa Anderson

NEW YORK (TrustLaw) - An investor group has urged Siemens AG to cut ties with the U.S. Chamber of Commerce, citing conflict beween the industrial company's efforts to comply with the Foreign Corrupt Practices Act (FCPA) and the  chamber’s attempts to weaken the act.

In a letter released late on Tuesday Washington DC-based CtW Investment Group, which said it manages $200 billion in assets including substantial shares held in Siemens, urged the firm to sever its ties with the Chamber, cease making contributions to it and relinquish the chamber board seat held by Siemens USA chief executive Eric A. Spiegel.

Siemens paid a record $1.6 billion in fines and fees to American and German regulators in 2008 after admitting violations of the FCPA, which is designed to reduce corruption by banning companies from paying bribes to foreign officials. In addition, it embarked on a costly program to bring its business units into FCPA compliance.

In the past year, the U.S. Chamber of Commerce said the FCPA has a chilling effect on firms doing business abroad.

The chamber launched an intense lobbying effort to blunt some aspects of the FCPA. This included asking for a clarification of the definition of “foreign official,” removing liability from firms if they can demonstrate adoption of anti-bribery measures, reducing penalties for firms that voluntarily disclose violations and limiting the government’s ability to levy fines on companies for FCPA transgressions by firms they acquire.

“It is alarming that with the company still on probation from one of the largest corporate bribery scandals in history and aiming to double its business with the U.S. federal government over the next few years, Siemens is actively part of an organisation intent on weakening the FCPA,” said the letter. 

“Only last month, eight former Siemens executives were charged with paying more than $100 million in bribes to win Argentina business for the company.”

The letter, signed by CtW executive director William Patterson, was sent to Siemens chief executive Peter Loscher and Supervisory Board Chair Gerhard Cromme. It was copied to Theo Waigel, a former German finance minister who was charged with monitoring Siemens for four years after it paid its penalty in December 2008.

CtW previously criticised Siemens for the “profound disconnect between Siemens’ environmental business model and the Chamber’s aggressive campaign to derail the United States government’s efforts to curb greenhouse gas emissions.”

It said that Siemens’ relationship with the U.S. Chamber of Commerce threatened the firm’s financial future and ill-serves its shareholders,

Siemens USA and the U.S. Chamber of Commerce did not respond to TrustLaw’s requests for comment.

(Editing by Rebekah Curtis)