The First Annual Bernie Madoff Award for Global Business Chutzpah goes to Siemens, Europe’s largest engineering firm which just copped a plea to bribery and corruption charges involving public officials and politicians on 4 continents.

The multinational agreed to pay $800 million worth of fines in America and another $540 million in Germany. That was in addition to the $280 million it coughed up to settle an earlier, similar charge.

But the size of the fines wouldn’t have, by itself, put Siemens over the top for the Madoff Award. It was the perverse sense of openness with which the process unfolded, as if people throughout the organization knew and accepted this was the way to do business.

According to the Economist, Siemens set up in full view 3 “cash desks” in its offices. Everyone knew employees could tote empty suitcases there and have them filled with cash to be used in paying off public officials for awarding contracts to Siemens.

Managers could pull out as much as $1.3 million at a time in support of efforts to secure contracts for the company’s telecoms-equipment division, according to the US Department of Justice.

Between 2001 and 2004, nearly $67 million was withdrawn in those suitcases, and all tolled according to Justice, Siemens paid foreign officials $805 million over a 6-year period.

No questions were asked, little documentation was required and managers needing money could approve their own requests.

Until 1999 Siemens actually claimed tax deductions for the bribes, booking them as “useful expenditure.”

“There was no complex financial structuring such as you would find among drug smugglers or money launderers,” Mark Pieth, chairman of OECD’s working group on bribery told the Economist. “People felt confident they were doing nothing wrong.”

Now that’s chutzpah!

Every winter it seems, Russia and Ukraine get into a spat about Russian gas supplies, but this year the squabble ballooned into an energy emergency for the entire European Union. 

The EU receives 25% of its gas from Russian gas conglomerate Gazprom via a pipeline coursing through Ukraine.

Ukraine is itself a Gazprom customer and for years it paid less than half the market price for gas. In the fall, the 2 countries agreed that Ukraine would transition slowly to market prices but Ukraine wanted to increase is transit fees on gas headed for the EU in return.

Gazprom made an insulting offer in this regard. Ukraine responded with an outlandish counter. The parties then stopped talks just as Vlad the Impaler sniffed for the umpteenth time that his feelings got hurt when the Ukrainians supplied arms to the Georgians during last summer’s dance party in Tbilisi.

Who knows what happened over the holidays but just after new year a shady court ruling in Kiev voided the pricing agreement and hours later the Impaler ordered Gazprom to cut supplies to Europe through Ukraine by an amount it accused Ukraine of siphoning off for internal use.

“Ukraine had neither the need nor the intention to steal Russian gas,” Hryhory Nemyria, Ukraine’s deputy prime minister told the Economist. And he added that Russia’s crass act in the dead of winter exposes it as an energy bully.

To which Gazprom’s Alexander Medvedev retorted that Ukraine “is responsible for everything that has happened.”

The squabble has hit Bulgaria, Hungary, Romania, Poland and Slovakia the hardest. It has impacted France, Germany and Italy as well.

Then over the weekend, Russia noticed its gas reservoirs were topped off meaning if it didn’t resume pumping soon, it would have to start burning gas.

Seeing the folly in that, the sides just agreed to get the gas flowing again and have neutral observers monitor the pipeline. There are also plans to have both boys stand in a corner for 5 minutes.

While US lawmakers are busy bailing out banks, insurance giants and we’ll see about car companies, the Italians have rushed to bail out Parmesan cheese makers.

What’s next, buffalo mozzarella?

And how could it come to this for the iconic pasta-topper when demand remains strong in Italy and abroad?

It’s simple. Producers can’t cover their costs.

Marco Iemmi and his 7 employees for example produce 15 thousand 77-pound Parmesan wheels a year. Last year he sold them at 7.4 Euros per kilogram, but he spent 8 Euros per kilo to produce them.

“It’s a tragic situation,” Iemmi told the Wall Street Journal. “I’ll have to close up shop unless things improve.”

So thank heavens for the Italian government which announced it will subsidize Parmesan makers by purchasing 100,000 wheels and donating them to charity.

Most Italians on ‘Strada Principale’ support the bailout.

“Parmigiano is almost indispensable,” Antonio Piermani told the Journal. The Rome wine-bar owner buys 3 kilos per month and swears that any substitute “would compromise the taste of the dish.”

Italy’s cheese crisis is the product of a fragmented producer sector. The world’s supply of Parmesan comes from about 400 tiny, family-owned businesses located near Parma in northern Italy. They understand economies of scale, but refuse to consolidate.

“We have an ancient mind-set,” Iemmi explained. “Each one of us wants to take care of his own little business.”

Meaning producers have no leverage with wholesalers, and not even the Pope would dare to mess with the meticulous Parmesan production process that has remained unchanged for several hundred years.

There’s even price competition, at least in Italy where 80% of the world’s Parmesan is consumed. Grana Padano, another grated cheese has a similar taste and costs less to produce.

Was that Big Pharma sighing relief or did the wind pick up a bit?

Back in January the European Commission began investigating potentially anticompetitive behavior by raiding the European corporate offices of every player in the space from Astra to Zeneca.

There followed months of extensive investigations and more raids all of which culminated in the release of a report last Friday.

The 400 page document detailed unseemly practices and suggested they might have cost European health care systems $4 billion between 2000 and 2007.

It was accompanied by threats to take down the first company that crosses any lines, but no criminal charges were filed.

In fact no company was accused of anything.

The report decried the way Big Pharma creates legal minefields for generic competitors by filing hundreds of ridiculous patents for its drugs, lobbing frivolous lawsuits in their path, and even paying-off the generics makers to shelve their products.

“These practices delay generic entry and lead to health care systems and consumers paying more than they would otherwise have done for medicines,” noted the Commission.

But the best line of the day belonged to Bayer’s CEO Arthur Higgins, who scoffed “there is nothing in this report that is unlawful.”

Well maybe not. But the Commission’s report is only preliminary. It’s got few more months to dig before the final report is released, and it you know it wants to fry some fish.

The northern bluefin tuna is native to the Atlantic Ocean and the Mediterranean Sea. The source of nearly all the tuna used in sushi, it is particularly revered in Japan where a large specimen can command $100,000 in Tokyo fish markets.

The fish live in deep ocean waters where no country has jurisdiction, and as a result they have been subject to decades of overfishing.

The problem is approaching crisis stage. Brian MacKenzie and colleagues at the Technical University of Denmark reported in particular that even if all bluefin fishing were halted immediately, bluefin populations in both the Atlantic and the Mediterranean will likely collapse within a decade.

Not that the current plan comes anywhere close to an outright ban. In theory, the organization that sets bluefin fishing policies is the Madrid-based International Commission for the Conservation of Atlantic Tunas (ICCAT). Its performance has prompted the Economist to propose that ICCAT actually stands for International Conspiracy to Catch All Tunas.

ICCAT had set a quota of 30,000 metric tons per year even though scientists suggest this is 2-4 times the sustainable amount. In response to the outcry from the scientific community (which must have been tough to hear amid the din arising from sushi restaurants on 6 continents), ICCAT reduced its quota to 25,000 metric tons. Whoop-de-damn-do!

Let’s not even start on the fact that at least 50,000 metric tons are actually landed each year due to illegal fishing and non-existent monitoring.

Oh, and even if ICCAT set a properly aggressive limit and became empowered to enforce it, there’s the problem of how the 46 participating countries would divvy up the catch.

Lots of people woke up with headaches the day after Barack Obama’s historic victory, including the Big O himself. Had Malia upped her negotiation stance to a Great Dane?

It wasn’t that bad, but it was an Excedrin moment nonetheless when those intemperate Russians announced just hours after the polls closed that they’ll deploy Iskander tactical missiles close to the Polish border if the Obama administration proceeds with plans to build a missile defense system in Western Europe.

Talk about raining on the parade!

To an extent, we can cut Russian President Dmitry Medvedev a break here. The poor guy feels put-out because his nation’s 75% stock market tumble in the last 6 weeks has completely extinguished the adrenaline rush he got from his moment in the Georgian sun last summer.

But did he have to go on national TV and say that right then?

Whatever, it presents an early test for the Big O, who during the campaign provided lukewarm support for a US-built European missile defense system designed to protect Western Europe from rogue states like Iran.

Moscow believes the missile defense system threatens its national security, to which the lame duck US president responded that the system would be no match for an all-out Russian nuclear attack so why worry?

Oy vey! January 20th cannot come fast enough.

Meanwhile, Medvedev was quoted by the Washington Post as saying, “I want to stress that these are forced measures. We want positive cooperation…we want to act together against common threats. But they unfortunately, don’t want to listen to us.”

Obama had no comment on the matter. He’s got to deal with Puppygate first.

A wealthy Norwegian dot-com boss turned fish farming entrepreneur thinks he can transform the country’s famous fjords into cod hatcheries just as human consumption of farmed fish is set to exceed that of wild fish for the first time.

Harald Dahl has already convinced Morgan Stanley and J. P. Morgan Chase to back his new company, Codfarmers. His backers apparently believe Dahl can overcome outbreaks of disease and finicky eating habits that have thwarted previous efforts to farm the iconic fish.

Today’s Atlantic cod market is worth about $1 billion, a fraction of its value before frightfully irresponsible overfishing slashed the global annual take from 1.8 million tons to 137,000 tons in just 40 years.

Codfarmers believes Norway’s deep fjords will facilitate waste disposal and lower exposure to fecal pathogens, the main reason why farmed cod hadn’t thrived in the past. Codfarmers has also developed techniques that increase reproductive efficiency and reduce harvesting costs.

At the moment, hearty, omnivorous salmon is by far the most widely farmed fish. But farmed salmon is not as tasty and contains fewer beneficial omega-3 fats than wild salmon, so it sells at a discount.

The economics are reversed for cod. Wild cod spends days in the hull of a boat before reaching shore, so it is not as fresh as the farmed variety. It sells for 20% less than farmed cod.

“Salmon used to be the party fish. Now it’s become an everyday fish. We want to make cod the party fish,” Dahl told the Wall Street Journal.

Seems like just yesterday when British Prime Minister Gordon Brown had sunk below the Mendoza Line. Criticism had morphed to ridicule. The man had been skewered as the anti-Midas of politics-everything he touched had turned to stone.

But things turned on a dime for Mr. Brown. Now we see him as a global savior. The European media sings his praises daily and even newly canonized Nobel economist Paul Krugman lauds the dour Scotsman as the guy who got it right with his plan to inject cash directly into UK banks, a plan soon copied around the world. All hail the laser-like antidote that saved us from the abyss!

How are we to explain the transformation? Did the lights just go on, was it dumb luck, or did circumstances simply play to his strengths?

The Economist suggests it’s mostly the latter. Brown was smart enough to recognize a good idea when he saw one. Thus, his plan borrowed from Sweden’s 1992 bank-rescue strategy for example, and it incorporated good ideas put forward by David Cameron’s Conservatives.

Beyond this, his austere personality and the experience he gained as economic grand master for the Blair administration positioned him to think clearly at the moment others were counting life preservers (including a certain Treasury Secretary who cut his teeth during flamboyant times on Wall Street).

But the phoenix act may be short-lived for Mr. Brown. A lot rides on whether his plan actually works and whether folks in the UK blame him for the deep recession they (and we) still must face.

One thing we know on this side of the pond is that the Brits will not give Mr. Brown a long leash. We’re still trying to figure out why they soured so completely on Tony Blair.

For 5 years beginning in 2010, US astronauts looking for a lift into space will have to hitch a ride on a Russian Soyuz rocket.

That’s because NASA plans to shelve the space shuttle program in 2010, but the next generation of US spacecraft won’t lift-off until 2015, the earliest.

The gap will be associated with thousands of layoffs in Florida. Meanwhile, recent US-Russian antagonism following Russia’s romp in Georgia has highlighted potential risks associated with Russia as a sole-source taxi service to the International Space Station. And of course, China’s space program is moving ahead to a point where it is now likely that the next person to walk on the Moon will be Chinese.

The Bush administration implemented this gap strategy in 2004 to maintain NASA’s annual budget at $17 billion while accelerating development of its new launching program known as Constellation. The goal of Constellation is to return astronauts to the Moon and perhaps Mars and near-Earth asteroids, but none of this will happen before 2020.

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Early in the economic crisis, US exports grew because the dollar was weak, and that propped up our economy enough to fend off a (unmentionable R-word).

More recently the Pound and Euro have weakened, and US exports will surely decrease as a result. Oh well, now that European banks are experiencing the same troubles as their US counterparts at least we can say America still exports something.

Germany, Belgium and Italy, welcome to your very own credit crisis!

The events in Europe the last several days have been stunning. On Sunday, Germany announced it was guaranteeing all consumer bank deposits. It then bailed out Hypo Real Estate Holding AG, a huge property lender that nearly collapsed after private lenders pulled out of a $48 billion loan last week.

Later that same day, sacre bleu, Luxembourg and Belgium allowed the French bank BNP Paribas to acquire Fortis NV, the banking and insurance colossus for $22 billion. The hastily arranged take-over came days after customers began pulling big money out of Fortis and the Netherlands nationalized its branch of the company.

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