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This is Morning Edition from NPR News. Good morning, I'm Renee Montagne. We've heard a lot about dubious financial achievements recently. And here's another one. The German engineering giant Siemens will pay a record fine of $1.6 billion to settle bribery allegations made by U.S. and European authorities. The company was charged with paying out more than a billion dollars in bribes to win contracts all around the world. NPR's Ari Shapiro reports.

ARI SHAPIRO: In an age where money can just be blips on a computer screen, it's almost nostalgic to hear about something as old-fashioned as suitcases full of cash. Linda Thomsen is director of enforcement at the Securities and Exchange Commission and she spoke at a press conference yesterday.

Ms. LINDA THOMSEN (Director of Enforcement, SEC): Employees obtained large amounts of cash from Siemens cash desks. Employees sometimes carried that cash in suitcases across international borders to pay bribes. Payment authorizations were recorded on Post-it notes that were later removed to avoid leaving any permanent record.

SHAPIRO: In other words, Siemens officials knew what they were doing was wrong. Joseph Persichini is in charge of the FBI's Washington field office.

Mr. JOSEPH PERSICHINI (Assistant Director in Charge, FBI Washington Field Office): Their actions were not an anomaly. They were standard operating procedures for corporate executives who viewed bribery as a business strategy.

SHAPIRO: As a result, Siemens won business contracts all over the world to build railroads in Venezuela, cell phone systems in Bangladesh, a national ID project in Argentina. Now, bribing foreign officials to get business violates a law called the Foreign Corrupt Practices Act. And the Justice Department has seriously ramped up its FCPA enforcement lately. In President Bush's first term, prosecutors brought 17 of these cases. In his second term, there have been 42. And other countries are playing a much bigger role than they used to. Matthew Friedrich is the acting head of the Justice Department's Criminal Division.

Mr. MATTHEW FRIEDRICH (Acting Assistant Attorney General of the Criminal Division, Justice Department): We are now working with our foreign law enforcement colleagues in bribery investigations to a degree that we never have previously. In the past, in a case of joint jurisdiction between the United States and another country, it was typically the case that only the U.S. prosecution would succeed. That is now significantly less likely to be the case.

SHAPIRO: In the Siemens case, the company will pay fines in Germany and the U.S. The penalties total $1.6 billion. The American fines alone are 10 times higher than the case that held the previous record.

Mr. DANFORTH NEWCOMB (Defense Lawyer): It is the biggest case around.

SHAPIRO: Danforth Newcomb is a defense lawyer in New York who specializes in FCPA cases. He says Siemens is lucky.

Mr. NEWCOMB: There is a perfectly appropriate calculation of a fine much larger than the amount of the fines that they paid.

SHAPIRO: So you're saying even though this is on the high end of historical fines, based on the sentencing guidelines, this is totally appropriate.

Mr. NEWCOMB: Well, I think it's better than appropriate. I think they got a good deal.

SHAPIRO: Not only because of the dollar amount that they paid, but also because the company technically did not admit to bribery. They admitted to a lesser charge. Now, this may sound like a technicality, but it can make a big difference, says Drew Harker. He's a defense attorney in Washington, D.C., who handles these sorts of cases.

Mr. DREW HARKER (Defense Lawyer): If Siemens, the parent corporation, had pled guilty to bribery, they would have been more at risk of losing access to the U.S. government contract market. They may not have been able to sell goods and services to the U.S. government market.

SHAPIRO: And getting shut out of American contracts could have been a death sentence for Siemens. Harker says that may explain why Siemens agreed to record-setting fines.

Mr. HARKER: It's hard to know what the consequences of debarment or suspension from the U.S. government market would be, but it would certainly dwarf the $1.6 billion that Siemens paid.

SHAPIRO: Harker was in Germany a few weeks ago to talk about legal issues, and he says all anyone wanted to discuss was this case.

Mr. HARKER: And the fact that, you know, Siemens at one time was the most revered and prestigious company in Germany.

SHAPIRO: And you think this changes that?

Mr. HARKER: Yes. I was told that. The Germans that I spoke to said that this was a significant black eye for the company within the public perception.

SHAPIRO: Under the agreement, Siemens will pay an independent monitor to oversee the company's behavior for the next four years. At the press conference yesterday, prosecutors were asked why none of the company's top executives have been charged with crimes. The prosecutors responded, the investigation continues. Ari Shapiro, NPR News, Washington.

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