Ometz demands explanation for $20m. in Seimens bribes

Anti-corruption watchdog group asks High Court to probe alleged bribes paid to chief officials at the Israel Electric Corporation.

By RON FRIEDMAN
Money 311 (photo credit: Bloomberg)
Money 311
(photo credit: Bloomberg)
Anti-corruption watchdog group Ometz submitted a petition to the High Court on Monday requesting the court order Israel’s law enforcement agencies to explain why they have yet to investigate chief officials at Siemens and the Israel Electric Corporation over the alleged payment of $20 million in bribes to the company’s board members and others captains of industry.
The petition asks the court to order Justice Minister Yaakov Neeman, Attorney-General Yehuda Weinstein, State Attorney Moshe Lador, Police Insp.- Gen. Yohanan Danino and others in the police and the Israel Securities Authority, to justify their failure to prosecute people involved in the large scale bribery affair, in which Siemens is suspected of having paid some $20m. in bribes to people at the Israel Electric Corporation between the years 2002-2005 to promote its business with the company.
According to the indictment filed in Israel, about 1m. euros of that sum went to former district court judge Dan Cohen.
At the beginning of the millennium, Cohen was a director at Israel Electric Corporation.
According to the indictment, he had received the bribe to encourage him to influence a decision to buy turbines from Siemens.
Cohen left the country to Peru and the state has been battling ever since to have him extradited and brought before the Israeli courts. Ometz however believes that justice demands the investigation go beyond Cohen and account for the remainder of the money that Siemens allegedly paid.
“The entire focus of the affair has shifted to the extradition from Peru of former judge Dan Cohen, but what about everybody else involved,” asked Aryeh Avneri, Ometz’s director.
“We don’t understand why the investigation was halted. There are $18m. that are just wandering around. We want to know where the money went and to what purpose.”
Ometz claims that the investigation into Cohen, which started in 2003, revealed the mechanism through which Siemens transferred bribes.
According to the indictment, the money went through a straw business consultancy firm owned and managed by the brother-in-law of the CEO of Siemens Israel Limited.
“It appears that the bribery mechanism and the use of the straw company was established by Siemens before the payments of bribes to Cohen and was used to bribe other figures in the Israeli market,” reads the petition.
The petition highlights repeated requests by Ometz, starting from 2010, to the various law enforcement agencies, to explain the reasons for not launching criminal investigations into Siemens and its managers.
The only answer Ometz ever received was from the State Attorney’s Office, which in a letter wrote that “In light of the complexity of the case, it was unable to disclose its actions to bring to justice others involved in the affair.”
In the petition, Ometz charges that the law enforcement agencies have failed in their job to protect the rule of law by failing to take action against the company, in what they describe as an unprecedented corruption scandal.
“In light of the respondents’ behavior, the petitioners will argue that the respondents’ failures are not due to negligence, but are rather deliberate and even declared,” read the petition. “The behavior of the respondents bears witness to complete collapse of the rule of law when it comes to the highest echelons of the Israeli market.”
Ometz said they were turning to the court because the statute of limitations on bribery charges, which lasts for 10 years, is about to pass.
Avneri said that Siemens officials were convicted in many other countries, and that only in Israel they seemed to be protected.
Weinstein himself represented Cohen as a private lawyer in the initial extradition process. In January, Peru decided not to extradite Cohen.
The Justice Ministry declined to comment on the petition’s claims, answering only that they had received the petition and would respond to it before the court.