By SIRI SCHUBERT and T.CHRISTIAN MILLER


MUNICH - Reinhard Siekaczek was half asleep when his doorbell rang early one morning two years ago. He peeked out his bedroom window, hurried downstairs and opened the front door. Standing before him were six police officers and a prosecutor. At that moment, Mr.Siekaczek, a former accountant for Siemens A.G., the German engineering giant, knew his secret life had ended.“I have been expecting you,”he told the officers.

To understand how Siemens ended up paying $1.6 billion, the largest fine for bribery in modern corporate history, it’s worth delving into the story of Mr.Siekaczek, one of several people who arranged a torrent of payments to well-placed officials around the globe.

From 2002 to 2006, he says, he oversaw an annual bribery budget of $40 million to $50 million. The payments, he says, were vital to maintaining Siemens’s competitiveness overseas, particularly in his subsidiary, which sold telecommunications equipment.

Siemens is hardly the only corporate giant under scrutiny by prosecutors. Three decades after the United States enacted a law barring American companies from paying bribes overseas, authorities around the world are bearing down on major enterprises like Daimler and Johnson & Johnson. But the Siemens case is notable for its breadth, the sums of money involved and the organizational zeal with which the company used bribes to secure contracts.

It is also a model of something that was once extremely rare: cross-border cooperation among law enforcement officials. German prosecutors opened the case in 2005. American authorities became involved in 2006 because Siemens shares are traded on the New York Stock Exchange. In its settlement with the United States government, Siemens pleaded guilty to violating the Foreign Corrupt Practices Act, which outlaws bribery abroad.

Mr.Siekaczek’s unit paid more than $800 million of the $1.4 billion in illegal payments that Siemens made from 2001 to 2007, including $5 million to win a mobile phone contract in Bangladesh and $12.7 million in Nigeria.

In Argentina, a different Siemens subsidiary paid at least $40 million in bribes to win a $1 billion contract to produce national identity cards. In Israel, the company provided $20 million to senior government officials to build power plants. In Venezuela, it was $16 million for urban rail lines. And in Iraq, $1.7 million to Saddam Hussein and his cronies.

Siemens began paying bribes long before Mr.Siekaczek applied his accounting skills to the task of organizing the payments. After World War II left the company shattered, it turned to markets in less developed countries, and bribery became a reliable sales technique.“Bribery was Siemens’s business model,”said Uwe Dolata, the spokesman for the association of federal criminal investigators in Germany.

Once, paying off a foreign official was not a criminal offense in Germany. In February 1999, Germany joined the international convention banning foreign bribery. Rather than comply with the law, Siemens created a toothless internal system that did little to punish wrongdoers, according to court documents. Inside Siemens, bribes were referred to as “NA” - an abbreviation for “nutzliche Aufwendungen,” which means “useful money.”

Managers in the telecommunications group decided to deal with the possibility of a crackdown by making its bribes more difficult to detect. They turned to Mr.Siekaczek, a man known for his personal honesty and deep company loyalty.“It had nothing to do with being law-abiding, because we all knew what we did was unlawful,”he said. “What mattered was that the person put in charge was stable and wouldn’t go astray.”

Mr.Siekaczek set things in motion by moving money to Liechtenstein and Switzerland, where bank secrecy laws provided greater cover. He also reached out to a trustee in Switzerland who set up front companies to conceal money trails from Siemens.

The scheme began to collapse when investigators in several countries began examining suspicious transactions. Prosecutors in Italy, Liechtenstein and Switzerland asked their German counterparts for help. German officials then decided to act. On November 15, 2006, the day the police knocked on Mr.Siekaczek’s door, other officers swept across Germany, into Siemens’s headquarters and several executives’homes.

All told, Siemens will pay more than $2.6 billion: $1.6 billion in fines and fees and more than $1 billion for internal investigations and reforms. But it still faces legal uncertainties. American and German officials said investigations were continuing.

Mr.Siekaczek has been sentenced to two years’probation and a $150,000 fine. He is uncertain about the impact of the Siemens case. After all, he noted, bribery and corruption are still widespread.

“People will only say about Siemens that they were unlucky and that they broke the 11th Commandment,”he said.“The 11th Commandment is:‘Don’t get caught.’”