A Tale of Bribery, Cockroaches and Raid



One of the most fascinating articles I have read in a long while is about the Siemens global bribery scandal where the company spent $1.4 billion on bribes from 2001 to 2007. Of that, get this – telecom accounted for $800 million or 57%! Consider the company also had divisions in industrial, transportation, control systems, healthcare and other areas and you see just how out of whack the telecom bribery spending was.

This leads one to wonder a few things… What would have happened if $800 million in telecom bribes weren’t paid during this time period? Would Nortel, Alcatel-Lucent, Avaya and others have done better? One would imagine they would have.

Would the terms of the Alcatel-Lucent deal have been different? How about Avaya being taken private – would the valuation had been higher if the bribery by Siemens didn’t take place?

Then there is product development. Did it suffer over the past decade? Did Siemens need to innovate if it was selling more product than it should have? Is its innovation behind others?

Furthermore, if other companies were selling less, did they in turn have less money to put back into their own R&D?

Did Siemens in fact cause innovation in global telecom to slow?

Then there are the myriad distressed acquisitions that took place over the past five plus years. Would they have happened if this bribery didn’t take place? What about the problems at Zultys, Comdial and Vodavi for example. All of these companies were more or less wiped out during these years.

Then there is the sheer amount of the bribes. I assume Siemens execs were not stupid and would not spend over a billion on bribes if they didn’t need to. This begs the question – was there competition in the bribing process? One would imagine there had to be as the numbers are so high.

Yesterday I posted my interview with Richard Lowe the President of the Carrier Networks Division of Nortel. He told me in the interview that Nortel has always been above board and fair – even though the competition wasn’t. I didn’t ask – but I should have. Was he referring to Siemens? And if he was and is implying Nortel doesn’t bribe, then what other companies are bribing?

This gets us to the next logical question which is where is the next scandal?

I have no illusions that bribery doesn’t take place but I wonder where this will end. Did this scandal scare other multinationals enough to have them stop this practice? If it has, what of the people who are used to getting bribes in order to buy from a company? Do they automatically stop asking now?


To me, this scandal is the first cockroach you see. We all know there is a nest of


these things somewhere and I imagine once the financial challenges the world is facing are over, there will be more time to focus on spraying RAID on the rest of the world’s corporations.

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