MANHATTAN (CN) - PEMEX, Mexico's national oil company, claims in court that Siemens bribed PEMEX officers, including a Mexican senator, to get millions of dollars in extra payments for a refinery modernization.
Petroleos Mexicanos and its subsidiary Pemex-Refinacion (PREF) sued Siemens and South Korean conglomerate SK Engineering & Construction Co., in Federal Court.
The SEC sued Siemens in December 2008, claiming it had "made three separate illicit payments totaling approximately $2.6 million to a politically connected business consultant to assist in settling cost overrun claims in connection with three refinery modernization projects in Mexico," PEMEX says in the complaint.
Siemens pleaded guilty to conspiring to violate the Foreign Corrupt Practices Act, and "agreed to pay a precedent-setting $1.6 billion penalty to U.S. and European authorities to settle charges that it routinely used bribes and slush funds to secure massive public works contracts around the world, including refinery modernization projects in Mexico," the complaint states.
Siemens, a giant German conglomerate, formed a joint venture, CONPROCA, with South Korea-based SK Engineering & Construction Co. to bid on a refinery modernization project in Cadereyta, Mexico. PEMEX awarded the contract to CONPROCA in 1997.
PEMEX claims that instead of completing the work by July 2000, as agreed in the original contract, CONPROCA asked for a new deadline and for millions of dollars in change orders to cover alleged cost overruns.
Siemens and its partner blamed the extra expenses on construction site access problems, weather, toxic leaks and interference from PREF, according to the complaint.
PEMEX transferred millions of dollars for additional invoices to CONPROCA's bank account in New York after the defendants bribed several PEMEX officials, the complaint states.
The bribed officials, who are not named as defendants, include Siemens consultant Jaime Federico Said Camil Garza, PREF project managers Eduardo Vergara Cabrera and Maximo Tellez Rosas, PREF counsel Luis Enrique Bouchot, and Cesar Nava Vazquez, general counsel at PEMEX, according to the complaint.
Vergara Cabrera, Tellez Rosas and Bouchot were removed and banned from public employment for several years, but they appealed the order, which was reversed. An appeal of the reversal is pending, according to the complaint.
Several SKEC officers were imprisoned in Korea due to irregularities in managing the company, including corruption, the lawsuit states.
"In order to obtain the Cadereyta project, Siemens and SKEC, working through CONPROCA, presented a significantly lower economic proposal than their only other remaining competitor," the complaint states. "Notably, CONPROCA's financing plan described that CONPROCA would issue five tranches of debt in the aggregate principal amount of $1,521,115,210, through several agreements with financial institutions and the issuance of bonds registered with the SEC. The financing plan was transmitted via facsimile, i.e. using the wires, from New York to PEMEX in order to induce PEMEX to perform under the contract, which was conditioned to CONPROCA obtaining financing for the Cadereyta project.
"Having won the project, defendants devised a plan to manufacture a series of cost overruns, the payment of which would allow them to make up the financial shortfall incurred by submitting an economically unrealistic bid. As part of their scheme to defraud, upon information and belief, defendants bribed several individuals at PEMEX, such as a former PEMEX official who was a senator in Mexico.