Siemens exec says company has told federal authorities all that it knows
President of Siemens in Brazil, Paulo Ricardo Stark, gave a statement yesterday to the Federal Police in São Paulo as part of an investigation focusing on a cartel of multinationals that allegedly committed fraud during the bidding process for million-dollar contracts in the subway and commuter rail sector.
Stark claimed that the facts cited in the plea agreement reached on March 22 with the antitrust regulator CADE occurred before his nomination as chief executive in October 2011. According to the executive, the company has furnished CADE with all the information it has on the case.
Accompanied by attorneys, Stark argued that he is not a beneficiary of the leniency accord, that is to say, he is not one of the executives of the German multinational who agreed to collaborate with Brazilian authorities in exchange for legal incentives that would shield them from legal sanctions.
Four other Brazilian citizens (Everton Rheinheimer, Nelson Branco Marchetti, Newton José Leme Duarte and Peter Andreas Gölitz) and two Germans (Daniel Mischa Leibold and Jan-Malte Hans Jochen Orthmann) are signatories to the plea agreement, along with Siemens in Brazil and its German headquarters.
The cartel allegedly operated between 1998 and 2008 under state governments of the PSDB in São Paulo and the Federal District. According to the whistleblowers, the violations consisted in “discussions and meetings about projects involving subway, commuter rail, trains and auxiliary systems, for the purpose of exchanging information and determine the prices to be quoted.”
Twenty companies cited as participants in “various anticompetition deals and accords involving state contracts” are being investigated by CADE, the state prosecutor (MPE-SP) and the federal prosecutor (PGR) “These companies tended to organize themselves into consortia,” according to the plea agreement.
Evidence. The witnesses for the prosecution have agreed to identify “all relevant facts and evidence to assist the investigation of the infraction and its effects on Brazil, relating to anticompetitive conduct involving subway and commuter rail and auxiliary system for the purpose of obtaining illicit benefits.”
Paulo Ricardo Stark, who has worked at Siemens headquarters and the company’s Mexican affiliate, was tapped to head the company’s Brazilian subsidiary after the exit of Adilson Primo, dismissed two years ago due to suspicions that he had diverted company funds to an account in Luxembourg.
Primo resigned his post as municipal secretary of management and general coordination of Itajubá, in southern Minas Gerais.
Primo chose resignation because he believes his presence in the city government and the press attention he receives are creating difficulties for mayor Rodrigo Riera (PMDB) …
Primo headed Siemens between 2001 and 2011 and returned to the headlines based on information that his company had formed a cartel and rigged bids … between 1998 and 2007. Last week, Primo gave a statement to the MPE-SP in which he said he did not engage in these illegal practices.
Siemens would only say that the decision to fire Primo was the result of “the discovery of serious wrongdoing by Siemens executives at the company’s Brazilian headquarters.”.
But back to the most recent Siemens testimony — sparse as it may be.
Stark told the PF that he had come forward as a witness and not as an investigation target. He reiterated that he had little to declare and few ways in which he could collaborate, and that he cannot speak for the persons who supposedly engaged in the conduct in question.
Audit. The president of SIemens in Brazil told the PF that the company continues its internal investigation and that the results of this audit will be reported to the PF, CADE and the MPF.
The investigation by the PF and the MPF will not confine itself to contracts signed by the government of São Paulo — They are examining subway and commuter rail contracts. Yesterday, the MPF distributed data to its anticartel group regarding contracts of the CBTU, an agency with ties to the Ministry of the Cities, in the amount of R$ 420 million and destined for the renovation of trains in Porto Alegre and Belo Horizonte. In these cases, the cartel was alleged formed by Alstom and CAF.
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