UPDATE 2-Pentagon searches U.S. offices of Siemens unit

Wed Apr 22, 2009 10:01pm BST

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* Search linked to Pentagon contract

* Search to go on "as long as it takes"

* Siemens says cooperating fully (Recasts with details from company statement, background on previous settlement, byline)

By Andrea Shalal-Esa

WASHINGTON, April 22 (Reuters) - Pentagon investigators searched the Pennsylvania offices of a unit of Germany's Siemens AG (SIEGn.DE) on Wednesday as part of an investigation of a Siemens contract with the U.S. military, a company spokesman said.

"Investigators from the Defense Criminal Investigative Service (DCIS) of the U.S. Defense Department today conducted a limited search of Siemens Medical Solutions USA, Inc's Malvern facility," said spokesman Lance Longwell.

"The search was in connection with an investigation of a Siemens contract with the Department of Defense," Longwell said. He did not identify which contract was in question.

Ed Bradley, DCIS special agent in charge, said the search of the Siemens facility in Malvern, a suburb of Philadelphia, began early on Wednesday and continued throughout the day. He gave no details on the nature of the investigation.

"It started this morning ... it will go on as long as it takes," Bradley told Reuters. He declined to say how many agents of the DCIS, the criminal investigative arm of the Pentagon Inspector General's office, were involved.

Longwell said Siemens Medical was cooperating fully with the investigation. He said the search focused on one floor of one building of the Malvern facility, its U.S. headquarters.

He said employees working near that area were asked to leave for the day and return Thursday.

The German engineering conglomerate in December agreed to pay more than $1.3 billion to settle corruption probes in the United States and Germany, ending a mammoth two-year corporate corruption investigation that cost two top Siemens officials their jobs.

U.S. authorities said Siemens made almost $1.8 billion in improper payments to government officials and third parties from March 2001 through 2007 in elaborate schemes involving employees at all levels.

Bradley said DCIS investigators were still executing the search warrant at the company headquarters in the Philadelphia suburb at 4 p.m., and would remain until their work was done.

The company won a Pentagon contract valued at up to $267 million on April 1 for radiology systems and components to be used by all the military services and other federal civilian agencies.

Bradley declined comment on whether the search was in any way related to the recent contract award. (Reporting by Andrea Shalal-Esa; editing by Carol Bishopric, Bernard Orr)

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