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  The World from Berlin: Something's Rotten in Germany, Inc.

The World from Berlin Something's Rotten in Germany, Inc.

The Siemens scandal just keeps getting deeper. Authorities on Tuesday took a board member into custody on suspicion of irregular payments. The case, say German commentators, shows that corruption is systemic at one of Germany's biggest companies.

The corruption scandal surrounding German industry giant Siemens just refuses to go away. Already under investigation for paying bribes around the world to secure lucrative contracts -- and for paying millions to its workers' council to ensure pliability -- the company took a further blow on Tuesday. Top manager Johannes Feldmayer was arrested and taken into custody for his alleged role in the corruption.

Feldmayer, in charge of Siemen's IT business, is the first acting management board member to be arrested in the ongoing corruption investigations. So far, it had only been former managers who had taken the fall for the company's misdeeds. The arrest has put increased pressure on Siemens CEO Klaus Kleinfeld to take immediate action to clear up the corruption allegations. German commentators on Wednesday are appalled.

Business daily Handelsblatt pronounces on Wednesday that Siemens this week has become irrevocably a "scandal company."

"It has become increasingly difficult to avoid the impression that (the corruption revelations) are part of a system. Slush funds in the telecommunications division, anonymous accounts in the generator manufacturing branch, dubious payments made to workers' council members: The suspicion is difficult to avoid that Siemens managers used the tool of bribery."

"The arrest of Feldmayer shakes Siemens to its foundations. He is known as a manager with integrity and was once seen as a possible (future Siemens CEO)…. When someone like him has to go to prison, then something has gone seriously wrong in the organization."

The center-left daily Süddeutsche Zeitung -- based, like Siemens, in Munich -- agrees that corruption at the industrial giant appears to be systemic.

"The scandal has now reached such dimensions that the company management under Klaus Kleinfeld can't ignore it anymore. And the investigators should increasingly direct their questions toward those who were responsible for the company prior to Kleinfeld. Who gave the instructions to pay off the workers' council in order to create a counterbalance to the IG Metall trade union?"

"The damage to Siemens's image is already immense. Kleinfeld is fond of saying that the company now has a zero tolerance policy on corruption. Cooperating with investigators, he says, is compulsory. But that's not enough: the Siemens boss has to take drastic steps if he wants to remain credible."

The Financial Times Deutschland says investigators are becoming more rigorous in their investigation of corporate corruption:

"A closer look reveals that Feldmayer's arrest is not only a sign of the depths to which Siemens has sunk. It's not only that the arrest has nothing to do with the telecommunications division slush funds into which hundreds of millions were paid. The suspicions leveled against Feldmayer would until recently never have led to the spectacular steps now taken by the state prosecutors: Because of barely €15 million that Feldmayer may have misappropriated … years ago, no investigator would have dared take a Siemens board member into custody.

"But since Peter Hartz, everything has changed. Since it was revealed that the former Volkswagen board member bribed the workers' council and was convicted for it, the relationships have shifted. Investigators have become braver and are taking action in cases that used to be regarded only as minor infringements."

"For Siemens itself, as well as for all large German companies, there is a lesson from the newest scandal: The risk connected to corruption has become much greater because prosecutors are more vigorous and the public more critical. Simply put, it's not worth it for company management to try to make their jobs easier via crooked deals with their workers' councils."

Left-leaning Die Tageszeitung isn't at all sure that the arrest had to do with the bribes paid to the workers' council.

"Siemens is also being investigated for bribes paid abroad. In this case, former management board members have been arrested -- and corruption at high levels is by no means limited to the oh-so-honorable company from Munich. But in all cases, the phenomenon is the same: The gentlemen claim to know nothing. After all, they say, they were acting at the behest of their company. It was important to get the contracts and it's common practice anyway. This disregard for the law has to be challenged -- and it is here that a spectacular arrest can help, even if the justification doesn't quite hold water."

"Only after a couple of arrests make it clear ... that the law has teeth, will anything change. So far, though, managers have been mostly either found not guilty or given mild penalties, even in cases that are apparently well documented. We'll have to see where the Siemens management ends up."

-- Charles Hawley, 3:15 p.m. CET