MOSCOW. (RIA Novosti political commentator Vladimir Simonov)
Two events coincided this Wednesday, as if giving new meaning to each other. Thomas Ganswindt, a former executive and member of the board of Siemens, Europe's biggest multi-profile company, was arrested in Germany. Jeffrey Skilling, ex-CEO of Enron, was sentenced in the United States to 24 years in prison. At one time, his former energy company was America's seventh largest.
For Enron, this was an ignominious end to its corporate history. For Siemens, this was just a prelude to a monumental scandal, which is likely to be very similar to the trials faced by the American company. Put together, these two events create a gloomy picture of a global corruption epidemic, against which no effective cure has yet been found.
First, the Enron case. Like Enron's late ex-chairman of the board, Kenneth Lay, Jeffrey Skilling was indicted on dozens of charges. He was accused of swindling, conspiring to commit wire and securities fraud, making false statements to auditors, insider trading, etc. For more than 15 years, Enron's top managers lived like kings - building villas from Corinthian marble, multiplying their fleet of corporate jets, and replacing Maseratis with Lamborghinis. But in 2001, everything came tumbling down like a house of cards.
That year, auditors found hundreds of millions of dollars missing in Enron's accounting reports. The cornered Enron admitted having a hidden debt of $31.8 billion and declared bankruptcy, resulting in 21,000 job losses. A drop in the value of its securities affected hundreds of thousands of shareholders, and the American business community has still not been able to overcome the shock.
Europe seems to be catching up with the United States in this relay race of high profile corruption. The credit for this goes to Siemens, or to be more precise, its top managers.
Until September, Thomas Ganswindt was president and CEO of Siemens Information and Communications Networks. Very few at the company knew that his tacit responsibility was to set up secret bank accounts in different countries for bribing foreign officials to win large orders for Siemens.
The German prosecutor's office estimates the value of these kickback funds at about 200 million Euros. However, Joe Kaeser, Siemens ex-financial director, who is cooperating with the investigators, has put the figure at 420 million Euros. This is the sum that could have been transferred from Siemens' revenues to secret accounts to be used for bribery by its top managers.
The Russian media have recently given extensive coverage to a similar scandal which has been going on in Russia in the last few weeks. It involves two government social funds - one dealing with compulsory medical insurance, and the other with pensions.
In the first case, contracts for medical equipment and drugs were given to "friendly" companies without any tenders. Accounts Chamber Auditor Valery Goreglyad believes that in certain cases the cost of purchases was inflated by 20 times. In this way, top managers at supplier companies embezzled funds earmarked for the national health project.
In the second case, the Ministry of the Interior's investigating committee suspects a conspiracy between the heads of the Pension Fund, go-between companies, and equipment producers. Siemens is not one of the latter, but the United States' IBM is. Computers were bought for sums that exceeded market prices many-fold, and the difference was divvied up between the participants in the deal.
These clone scandals that have rocked America, Western Europe and Russia suggest that corruption is inherent in a market economy. No matter how developed the market culture is, it is still vulnerable to swindling on an increasingly high level, because both a top officer at Siemens and a modest manager at a computer company involved with Russia's Pension Fund are programmed to move up the corporate ladder, and both have to show indicators of success - be these share prices, profitable contracts, or the number of computers sold.
If they cannot build their careers honestly, they either have to falsify these indicators or obtain them for a bribe. Corruption is probably as immortal as the mafia.
There is, however, a difference in the zeal, consistency and honesty with which different countries are fighting corruption.
When a Russian schemer occupying a position comparable to CEO of Enron or financial director of Siemens knows that he or she will not escape a punishment similar to the ones they received, Russia's corruption rating may go down. At least, I would hope so.
