Wednesday, 31 August 2011

Siemens - Data Mining Or Espionage?

Whilst the Bombardier Vs Siemens train debacle continues, serious questions need to be asked of MPs and procurement officers regarding their relationships with Siemens.

In the same week the Bombardier issue broke into the news, it was revealed that £500m had vanished in Edinburgh on a new Tram system. The contractors were Bilfinger Berger & SIEMENS.

One of countless scandals in Greece involves millions of euros smuggled under the table by Siemens and siphoned to the leading Greek political parties of New Democracy and pasok as ‘commissions’ or direct bribes for winning certain contracts worth billions. The key person (a Siemens top executive of Greek origin and German citizenship) involved in the plot escaped arrest and trial in Greece and currently shelters in Germany where he is protected by German law.

Siemens has paid out E1.3 BN in bribes between 2000 and 2006. Their track record is truely shocking;

GERMANY: Anonymous allegations were made against Siemens for 'bribery, preferential treatment and unacceptable agreements' in an E6 billion contract for the German Ministry of Defence. In the 2004 German affair over MNCs financing politicians, it was revealed that Siemens paid E60,000 per year to the MP Ulrike Flach (it was claimed these payments were in exchange for her translation work for Siemens).

Siemens employees in Greece and Germany allegedly embezzled over U.S. $550 million to pay bribes outside Germany via shell companies throughout Europe.
Until 2007, German firms could legally claim tax deductions on bribes paid overseas as "business expenses."

Austria: In 2009 a former associate of the Austrian Federal Agency for State Protection and Counter-Terrorism (BVT) in Vienna was appointed the head of the Siemens security department. Next, there were allegations that Gert-René Polli leaked a strictly confidential dossier of the German Federal Intelligence Service (BND) to Iranian authorities. The Prosecutor’s Office in Vienna is conducting investiations over charges of betrayal of secrets. Siemens also supply mobile communications spying equipment, for the Iranian regime to spy on it's citizens.

ITALY: In April 2004, an Italian judge banned Siemens from taking part in any public tenders in Italy for a year following an investigation into alleged bribes made by Siemens to Italian utility company Enel. Siemens was accused of paying £4 million in bribes to Enel executives for a gas turbines contract. 

RUSSIA: In April 2005 the Mail on Sunday newspaper reported that two former employees went public with allegations that Siemens regularly paid bribes in order to win public contracts. The allegations are supported by affidavits and internal Siemens documents and concern events that took place throughout the 1990s. According to Mr. Papernick Siemens secured a £20 million contract in 1999, with an alleged £4.5 million kickback, to supply equipment to the Bourdenko Institute of Neurosurgery in Moscow. The whistleblower alleges that this contract was dropped in 2000 as Siemens prepared to be listed on the New York Stock Exchange and feared it could be vulnerable under the US Foreign Corrupt Practices Act.
Michael Kutschenreuter, the former financial head of Siemens' telecommunications unit, was found guilty in 2010 of breach of trust and abetting bribery.
Kutschenreuter, 55, is the most senior Siemens executive found guilty of corruption so far. He was placed on probation for two years and fined 160,000 euros ($215,300) after admitting that he had covered up slush funds and bribes paid by his employees.
The other defendant, Hans-Werner Hartmann, who was in charge of accounting at the company's telecommunications arm, was placed on probation for 18 months and fined 40,000 euros. According to prosecutors, the funds were used to bribe government officials and business contacts to win lucrative contracts in Russia and Nigeria.

SINGAPORE: In 1996, Siemens and a number of other multinational corporations were banned for five years from Singapore government contracts. A consultant working for those multinational corporations allegedly bribed the Chief Executive of the Public Utilities Board.

SLOVAKIA: In 2001 Siemens was alleged to have offered SKK 1.5 million to the Chair of a tender commission concerning a large IT contract for the Slovak Treasury. However, Siemens Business Services successfully appealed in April 2002 and was able to re-enter bidding for an IT contract in the Slovak Treasury.

SPAIN: In 2001 Spanish judges suggested that Siemens was involved in money laundering, corruption and party financing amounting to DM 19 million in connection with the construction of the Ave rapid rail link between Madrid and Seville.

USA: In December 2008, Siemens agreed to pay $800 million to settle a U.S investigation of allegations it used bribes for years to win contracts.

ARGENTINA: 2008 - According to a recent lawsuit, an Argentine Government investigator uncovered evidence of bribes and kickbacks related to a large Siemens deal for Argentine ID cards. When the investigator continued to press the issue, he was attacked in front of his home, according to the lawsuit. He was punched and kicked about the head, rendering him unconscious and causing permanent damage to his vision and hearing, he said.
His attackers repeatedly called him “whistleblower” as they beat him, according to the lawsuit. Moran claimed one of them was an employee of Siemens Argentina. In 2008, Siemens Argentina pleaded guilty to falsifying its books and records to disguise $31 million in corrupt payments to Argentine officials, in violation of the Foreign Corrupt Practices Act. The payments were made in connection with the identity card project, which was ultimately abandoned.

In 2008, Siemens was fined a record £490million in the US and £346million in Germany on bribery charges.
It was also barred for two years from bidding for contracts from the World Bank. Last month a further potential bribery case was discovered at Siemens’ business unit in Kuwait.

Germany's Federal Intelligence Service, or BND, has a representative on the Siemens management board, Spiegel cited unidentified former managers as saying. The BND used Siemens's communication technology for espionage purposes, while Siemens became the spy agency's top supplier.
The BND's role in Siemens means it has knowledge of access codes the company uses to conduct maintenance work on electronic and communications systems.

The British Government still dealt with Siemens and eventually offered them preferred status for the Thameslink contract.

With all of these practices, Siemens was still awarded;

A £635 million PFI contract in 1999 to take over National Savings - an entire Government department. Virtually all of the 4000 staff were transferred to Siemens Business Services.

Siemens Traffic Controls’ technology was selected by Transport for London (TfL) for the world’s largest Low Emission Zone. Siemens supply and operate the system, which involves installing Automatic Number Plate Recognition (ANPR) cameras at 75 different sites around London to capture details of an estimated four million number plates every day.

Siemens Business Services was awarded an £18 million contract by the Office for National Statistics to digitise 250 million birth, marriage and death certificates from 1837 to the present day.
The UK Passport Service awarded Siemens Business Services a £120 million contract for an IT solution to make passport applications online from 2005.

The provision of many of the BBC’s technology services such as the core business network infrastructure, connectivity, business systems, business servers, telephony and printers is
outsourced to Siemens IT Services and Solutions under the Technology Framework Contract. This involved transferring over a thousand BBC employees to Siemens.

It needs to be understood that many of the above contracts involve hard drives, including the BBC phone system. Consider the data a foreign power can derive from the reports and investigations at the BBC - Political scandals where sources and names are kept out of reporting for security reasons etc.

As Siemens runs the systems, rather than just supplying them, they send a Siemens employee to download the data from the hard drives to 'clear' them monthly.

They do this at Royal Mail for example, where the letter sorting machines are built and maintained by Siemens. These machines photograph and record every item of mail they process, using character recognition software. The data is stored on hard drives which are emptied monthly by Siemens. This provides valuable commercial data for Deutsche Post, Royal Mail's major rival. The software can also track particular addresses including P.O Boxes, even monitoring particular handwriting if the envelope is hand-written.

The data of London vehicle movements, and the family tree of everyone in the UK being given to a foreign power is very concerning. Add the BBC data, and that is all the intelligence sources a foreign power could ever dream of having. Just one example would be that, as Germany has the family tree data of the entire country, any MI6 Officers in Germany (or elsewhere) using cover names could potentially be exposed.

It seems it's ok for Germany to know the vehicle movements of British VIPs, and profile every British Citizen since 1837.
If you doubt the risk to Britain's security posed by these infiltrations, consider whether Berlin would allow a British company such intimate knowledge and tracking abilities of major German infastructure...

Why do you think they bribe?

* In 2011, BAE Systems has signed a contract with Siemens for product lifecycle management (PLM) software, which will be used to develop new Trident nuclear submarines for the Royal Navy.
Under the terms of the deal, announced today, the defence equipment contractor will use Siemens software to develop the new fleet of its next-generation vessels.


  1. That is one serious data collection system!

    How have '5' allowed that?!

  2. Scary suff indeed! This should be known by a lot more people, particularly British people but not only. I'll certainly do what I can.

  3. Interesting article, I have heard about this intelligence collection through other sources regarding Siemens. Do you know if any other German data software enables the BND access to computer systems? For example I know of a US government agency that uses SAP, which is German, for its equipment records. I would assume, based on this article, that SAP permits the BND access to this particular agency's data.