The Multinational Monitor


G L O B A L   N E W S W A T C H

ITT and Siemens' Officials Convicted in Austrian Bribe Scam

Senior officials of ITT and Siemens, the giant West German electrical firm, were convicted in Vienna on November 27 at the end of the largest corruption trial in Austria's history.

The case revolved around charges that ITT and Siemens paid bribes to win contracts for the construction of a 2,100-bed hospital in Vienna, yet to be completed.

Testimony at the trial, which created a national stir in Austria, alleged that ITT laundered $770,000 and Siemens $1 million into two dummy companies in Lichtenstein owned by Adolphe Winter, the director of the hospital construction project.

Four top executives from ITT-Austria were convicted in connection with the bribes, including Fritz. Mayer, former chairman of ITT-Austria's executive committee and former leader of the Confederation of Austrian Industry. Mayer was sentenced to three years in jail. Also convicted from ITTAustria was Edmund Hainisch, chief executive of the subsidiary, who was also sentenced to three years in jail, and two ITT-Austria managers.

Siemens also saw four of its senior management staff convicted.

The sentences "were very stiff" and unusual for Austrian courts, says Nicholas Scherke, administrative counsellor at the Austrian embassy in Washington. "A lot of people were shocked." Not so one Vienna newspaper editor who pointed out that Winter, who received $2.7 million in bribes and was sentenced to nine years, still got good value on a per year basis.

Neither ITT nor Siemens would comment on the trial.

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