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. Last Updated: 07/27/2016

Magazine Says Siemens Paid Bribes for Russian Contract

A former Siemens executive has accused the company's medical division of paying bribes to Russian officials to secure a deal with a leading Moscow neurosurgery institute, German weekly newsmagazine Der Stern says in its issue published Thursday.

Sam Tsekhman, a former sales manager at Siemens Medical Solutions, says he was regularly handed large sums of cash -- sometimes as much as $1 million -- intended as bribes to grease a deal, the magazine says, citing a sworn affidavit by Tsekhman.

Ulrich Krips, spokesman for Siemens Medical Solutions, denied the report on Wednesday.

"What the magazine is saying is absolutely not true," he said by telephone from Erlangen, Germany.

In the article, Tsekhman is cited as saying that until April 2000, Siemens employees negotiated bribes with Russian officials to help facilitate a 28.2 million euro ($34.6 million) contract with Moscow's Burdenko Institute. In all, the company budgeted 7 million euros in payoffs for the deal, Der Stern reports.

The magazine says that Tsekhman in 2003 personally complained to Siemens board chairman Heinrich von Pierer about the case. As result, Siemens initiated an internal investigation, Der Stern says, citing a company spokesman.

Since 1999, German companies can be prosecuted at home for giving or offering bribes to foreign officials.

Kirill Kabanov, chairman of the National Anti-Corruption Committee, said the practice of paying bribes for contracts went back to the Soviet era, when officials held a monopoly on doing business with foreigners. "Unfortunately, too many companies are still working under that scheme ... and officials are getting greedier."

Seventy-one percent of foreign companies polled in March called corruption the top barrier to investment, according to a survey commissioned by the Foreign Investment Advisory Committee.