Germany Rocked by Damning Report on UN Scandal

On Friday the head of the German unit of Transparency International Hans-Jürgen Elzholtz demanded an investigation not only into the bribe-awarding practices of major companies such as Siemens and DaimlerChrysler, but also into the wrongdoings of smaller firms now unraveled by the Volcker report which has dropped like a bombshell in Germany.

Paul Volcker, a former US Federal Reserve chairman heading an independent panel investigating the United Nations' oil-for-food program for Iraq, said on Thursday that more than 2,000 companies from all over the world pumped 1.8 billion dollars in bribes and illegal surcharges into the coffers of Saddam Hussein.

Among those named in the report were German car-making giant DaimlerChrysler and electrical engineering group Siemens along with 61 other mostly minor German companies.

Siemens denies allegations

DaimlerChrysler, the report says, allegedly paid about $7,000 through a local representative to ensure contracts worth about $5 million. The company said on Friday that it already mentioned the case in one of its previous quarterly reports and that it rejected any further public comments.

The Siemens group is said to have paid about 1.6 million dollars in bribes to Saddam in support of deals involving power plant turbines.

Siemens representatives says the company wouldn’t make any comment at this point in time and have called the report "premature and unjustified."

Fresh debate about business ethics

But, Mark Pieth, an investigator on the Volcker panel, argued that investigators found clear evidence into the wrongdoings of German companies.

"We have documents supporting our allegations," he said. "They are available to everyone and clearly document all traces we’ve found. I’m convinced our report provides enough evidence for legal proceedings against the firms to start immediately."

Paul Volcker’s findings have unleashed a fresh debate about business ethics in Germany.

Hans Jürgen Elzholtz, from the corruption watchdog Transparency International, said the two corporations had adopted anti-corruption strategies long ago. They should now be wondering, he argued, how the system could have been circumvented by individual staff members.

He also urged German prosecutors to start a full investigation into the cases of bribery.

"German laws against bribery are sufficient and appropriate," he said. "They just need to be fully applied. It is now a question of resources in the justice system and enough public pressure to start a full legal proceedings. I hope we’ll see that happening very soon."

Smaller fish shouldn't go unpunished

Elzholtz also expressed the hope that prosecutors wouldn’t just focus on the two high-profile cases involving DaimlerChrysler and Siemens.

The huge number of smaller companies that had given kickbacks to the Saddam regime shouldn’t go unpunished, he said.