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Global Economy

New lead in the Siemens bribe scandal

Munich, spring 2007. The biggest bribery scandal in German history shook the republic. Investigators had stormed the Siemens headquarters, securing evidence that the company had paid bribes to politicians and officials around the world for years in order to get lucrative orders. Group CEO Klaus Kleinfeld had to vacate his post, as did Supervisory Board Chairman Heinrich von Pierer. During these turbulent days, a suspect turned himself in to the investigating public prosecutor, Hildegard Bäumler-Hösl.

A repentant "King of Nigeria"

The former boss of Siemens in Nigeria, Eduard Seidel, it seemed, had come to confess. The man, whom colleagues dubbed the "King of Nigeria," admitted to bribing Nigerian officials on 22 counts. He told adventurous stories, such as suitcases full of cash and money orders by fax.

In December 2008, Seidel received a criminal order for "bribery of foreign officials", was sentenced to one year's imprisonment on probation and had to pay 240,000 euros. The extremely mild sentence was also due to the fact that Seidel always assured that he had never put any money into his own pocket – neither "directly nor indirectly".

Tens of millions in Swiss accounts

The name Eduard Seidel, as the owner of a total of six Swiss accounts. These accounts were opened between 1985 and 2005, in part during the period when Seidel distributed bribes for Siemens in Nigeria. In the spring of 2006, a year before he turned himself in to the Munich public prosecutor's office, one of his accounts had assets of around 54 million Swiss francs, according to the leaked bank data.

Eduard Seidel's great fortune is surprising. Because in the interrogation with the public prosecutor's office, Seidel stated that he only lived in "orderly" financial circumstances. As assets, he listed a few properties in Germany, a property in Portugal, a house in Bruchsal, which he signed over to his daughter – he did not tell the public prosecutor anything about Swiss accounts. Before leaving in 2004, he earned 300,000 euros a year at Siemens – a lot of money, but no explanation for the enormous assets in his Swiss bank account.

Siemens denies knowledge of accounts

Siemens itself says that Seidel's accounts are not known. And so the question of where the millions come from remains unresolved. The mysterious accounts should definitely arouse the interest of the Munich criminal investigators. Because in the past several cases had become known in which Siemens managers had diverted bribes. The Panama Papers recently revealed such a case.

When asked, a lawyer for Eduard Seidel explained that his client "resolutely denied the allegation that he stole money from Siemens or received money as a result of corrupt or criminal behavior in Nigeria." Seidel was always loyal to his employer and his former colleagues. "Insofar as he is guilty of misconduct, he has incriminated himself considerably towards the Munich public prosecutor's office and has also come clean with Siemens." However, the lawyer's letter does not provide an answer to the question of where the money in the Swiss accounts came from.

Have the funds been reported?

Questions are raised not only by Seidel's game of hide-and-seek, but also by the behavior of Credit Suisse and its former subsidiary Claridien Leu. The Swiss Money Laundering Act, which came into force in 1998, requires banks to report the accounts of suspicious customers.

The fact that Seidel was an important figure in the Siemens bribery scandal was also easy to understand beyond the Alps. International media reported on the case and also mentioned the name of Eduard Seidel. What's more, Seidel appeared in an international database from 2007 that financial institutions use to assess the risk of their customers. But according to Suisse Secrets, Seidel still had around ten million Swiss francs in the bank in 2016.

Prosecutors were not informed

To date, the Munich public prosecutor's office has received no indication of the suspicious assets. "It is perfectly clear that the bank must report suspected money laundering if it has any indication that funds are available that could have come from a criminal offense," says public prosecutor Bäumler-Hösl, who was investigating the case at the time.

Didn't Credit Suisse report the Seidel millions as required? The bank does not want to comment on individual customers when asked. In a multi-page letter, however, the money house states that it is "absurd to assume that Credit Suisse would tolerate illegal activities or support them in any way". In addition, the bank would comply with its reporting obligations for money laundering and comply with all legal requirements.

Luxury real estate acquired through letterbox company

Another leak could provide clues as to where the millions may have ended up. Under the keyword "Pandora Papers", the International Consortium for Investigative Journalists (ICIJ) published information from another data set last year together with NDR, WDR and SZ, among others.

Here, too, Eduard Seidel plays a role: as the owner of an anonymous shell company in the British Virgin Islands, which he acquired in 2008. According to the documents, this letterbox company apparently bought four properties in Dubai for Seidel in 2009, including a villa on the legendary palm island "The Palm Jumeirah". The "King of Nigeria" also left unanswered questions about this stately residence.

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