Philips in Poland suspected of bribery

Translated from NOS TV in the Netherlands:

Philips in Poland suspected of bribery

Added: Tuesday, May 17, 2011, 6:01

By reporter Gert-Jan Dennekamp and Marc Bessant

Philips employees in Poland are accused of systematically bribing hospital administrators. The coming months three former executives of Philips will be on trial in Poland on charges of bribery. The Polish prosecutor suspects the electronics group of setting up a special fund for bribes. This shows from documents in the possession of the NOS and the Financieele Dagblad daily.

“All profits of Philips in Poland have been obtained by crime,” said a witness for the Polish public prosecutor, Marian Kulig. He worked as a broker and delivered Philips CT scanners and other equipment to hospitals.

Kulig said he had distributed more than one million euros in bribes. That money was partly from the Philips plant in Hamburg, which, according to the Polish prosecutor’s, managed the special fund of bribery money.

Quarrel

Between 2000 and 2007, Kulig bribed hospital managers. The directors then changed the technical requirements in their contracts so that only Philips equipment would fit. The equipment was then delivered through Kulig’s company or by Philips itself.

After he fell out with the Polish Philips bosses, Kulig in 2007 went with his accusations to the Polish public prosecutor’s. On June 13 23 people, including three Philips executives, will stand trial at the court in Katowice.

The bosses now no longer work for Philips. Philips acknowledges the investigation, but does not want to comment with the trial pending.

Investigation in the U.S.

The company also launched its own investigation because the American justice department has asked Philips for clarification on this matter.

The headquarters of the medical department of Philips are in the U.S.A. The past two years the government there has focused mainly on addressing corruption in the medical sector.

This case could have major financial implications for Philips. In investigations into other companies, U.S. Justice has imposed big fines. Thus in 2008, Siemens received a record fine of 600 million U.S. dollars more, according to The Guardian

for bribing public officials. This spring the medical company Johnson & Johnson was fined $ 70,000,000.

According to the New York Times, $81 million.

UPDATE: according to StatCounter, people at the Groenendael Philips Management Training Center in Amsterdam have read this blog post. It is to be hoped that it will stimulate them to do something against this culture of corruption.

UPDATE 18 May 2011: also Philips kickbacks in other east European countries? Here.

Viji Sundaram, New America Media: “U.S. pharmaceutical companies have moved their operations overseas in the past decade, testing their drugs on poor people in such lands as Russia, China, Brazil and Romania… One country that has experienced a boom like no other in this industry is India, with its widely spoken English, an established medical infrastructure and welcoming attitudes towards foreign industry. Most importantly, these pharmaceutical companies are exploiting the country’s vast number of illiterate and poor people who are willing to become guinea pigs”: here.

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