The Senate Judiciary Committee and the House both have made moves to restrain wiretapping legislation and possibly as important to remove provisions that would forgive telecom companies that enabled the US Government to tap phone conversations for all Americans.

Its a class action lawyer’s dream case.  The federal government legislature preventing the exclusion of some of the largest corporations in the country from prosecution for illegally aiding in the wire tapping of every person in the country.  The corporations have deep pockets and the legislature wants to make a point about the abuse of power by the Executive Branch without actually having to fight directly against the Executive Branch. 

So instead by default they can allow trial lawyers to gather up a grass roots group of all Americans and file against all the major phone companies (excluding Qwest, the only phone company that apparently did not cooperate after they did a legal review of the request.)

Panel Drops Immunity From Eavesdropping Bill - New York Times

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Yesterday the Wall Street Journal came out with an article that alleged that the current CFO of Siemens and one or more members of the board of directors at Siemens may have known about the corrupt practices taking place in both the wired and wireless divisions of Siemens for multiple years.

Today, the CFO and the board members mentioned came out to deny that they had any previous knowledge of the payoffs that were provided via fictional consultants.

Several employees of Siemens were arrested last fall and a few have agreed to cooperate with authorities and according to the WSJ article fingered current CFO Joe Kaeser.

German investigators have previously announced that Heinz-Joachim Neuburger, the former CFO and Kaeser’s predecessor, is a suspect.

The cooperative witnesses indicated that Mr. Kaeser saw some of their corrupt practices while he was involved in the wireless-telecom-equipment unit where he was an executive manager.

Tomorrow shareholders convene for an annual meeting where they will vote on Senior management’s actions. Those shareholders are not likely to be happy with the situation that has revealed that about $544 million of suspicious transactions had been found, which could result in writing those previously expensed items back on the books for tax purposes.

You can’t deduct a bribe.

Technorati tags: Siemens investigation, can’t deduct a bribe on your taxes, wireless industry corruption, telecom corruption

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Siemens has big problems with slush and we’re not talking about the kind of slush that results from snow and ice turning mushy as it converts back into water. No we’re talking about the type of slush that results when a company pays cash to a intermediary, who then proceeds to pay that cash to a partner, customer or some other stakeholder of the company in the form of bribes, kickbacks, hush money or a number of other possibilities.

Siemens has been investigating a slush fund scandal within its company that dates back to the mid to late 1990’s and has grown from tens of millions of euros in pay offs to 200 and now 420 million euros.

The company is being investigated in multiple countries throughout Europe and over a half dozen former employees including the chief financial officer of the telecommunications unit, Michael Kutschenreuter, who was working as the head of Siemen’s real-estate division at the time of his arrest in mid-November.

The scandal is based on some simple and unfortunately classic uses of dummy corporations. Siemens paid money allegedly to dummy companies that held the funds in secret Swiss bank accounts and then funneled that money off to pay non-existent consulting contracts with funds going through the Caribbean just for good measure.

Siemens is cooperating with the investigation but the troubles threaten to unravel a deal with Nokia as the potential financial burdens from wrong doing threatened to torpedo the deal.

KPMG, Siemens’ auditor of record, has indicated that they did not notice any of the wrong doing. The tip off came to investigators when a whistleblower contacted the Swiss Money Laundering Authority. This prompted a Swiss, Austrian and German investigation and shortly there after it came to light that Italian were also investigating and thought that the corruption went back to the mid-90’s.

Siemens current CFO, Joe Kaeser, indicated that 420 million euros in illegal payments dating back to 1999 have been identified coupled with an additional 168 million euros in tax charges. This has resulted in a temporary restatement from 3.11 billion down to 3.03 billion euros, but if the recipients of the payments are not identified, then the payments can not be deducted from their tax liability and that liability will increase.

This investigation is not over and its like much more information will come out in the weeks to come.

Additional reading

• www.techworld.com/…/NewsID=7411
• www.techworld.com/…/newsid=7571

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Gridlock News provides links to source documents published today by Wired Magazine. The documents detail (down to the wiring detail) how the NSA & AT&T rigged up a ’secret room’ in multiple locations around the country to read internet traffic including messages, emails and surfing activity.

Whistleblower Mark Klein, not covered by the Gag order impacting the EFF, AT&T and the NSA provided copies of the evidence he gave to the Electronic Frontier Foundation (EFF), which can be read by you now!

click here ->Gridlock News: Read NSA Spying Documents from Whistleblower

here’s a picture of one of the previously secret rooms

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The uproar today out of Washington comes from the revelation that the NSA has been collecting phone records of every day Americans since shortly after September 11th without anyone’s public knowledge as the event has been highly classified.

ABC Channel 7 in Chicago describes the information provided with the following analogy, “That printout of your phone calls that many Chicago area consumers get each month is the same one that also goes to the government in a database that has charted hundreds of millions of calls. ”

The NSA appears to be working under a potential legal loophole. A court order would be required to allow the NSA to listen to the actual phone conversation, however a court order is not required for them to request phone records.

Reports describe Billions of phone records turned over to the government for “tens of millions” of customers in some reports and “over 200 million” customers in other reports. These are domestic phone bills of US Citizens and businesses.
ABC7Chicago.com: NSA collection of billions of phone records sparks uproar

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