Ex-SAP director: I bribed govt officials to seal the deals on software

Payoff led to $14.5m contract signoff

A former regional director of German enterprise software outfit SAP has pleaded guilty to bribing officials in the Panamanian government to secure a contract for one of the company's resellers.

Vicente Eduardo Garcia, 65, of Miami, Florida, admitted giving $145,000 in bribes to one government official and promising bribes to two more to ensure that the local social security agency bought a technology package worth $14.5m from an SAP reseller – a contract worth $2.1m in software licenses to the German firm.

Garcia agreed to disguise the payments by taking out a phony contract with one official's brother-in-law for "consulting services." Two more officials were in line for larger payouts if the contract went through.

Garcia, a former VP of global and strategic accounts for SAP, admitted to setting up a slush fund by selling SAP software at an 82 per cent discount to a reseller in Panama between 2009 and 2013, which the reseller would then sell at "significantly higher prices" to the Panamanian government. The spare cash went to bribes, and Garcia also took a cut.

The former SAP exec admitted violating the Foreign Corrupt Practices Act (FCPA) and has settled out of court with the Securities and Exchange Commission, agreeing to pay back the $85,965 he took (plus interest of $6,430). He has also pleaded guilty to similar charges from the Department of Justice and will be sentenced in December.

"Garcia attempted to avoid detection by arranging large, illegitimate discounts to a corporate partner in order to generate a cash pot to bribe government officials and win business for SAP," said Kara Brockmeyer, chief of the SEC Enforcement Division's FCPA Unit.

According to the SEC, Garcia lied to his employers about the discounts he was giving to generate the slush fund and, foolishly, used both his personal email account and his SAP internal email to discuss the transactions.

Garcia told the DoJ he believed paying the bribes was the only way to secure the government contract in the first place. Further SAP contracts were expected as a result of the payments. ®

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