Things are going from bad to worse for Pierer. After being dropped as technology advisor by German Chancellor Angela Merkel last weeka few days ago, now more accusations that the former Siemens chairman knew more about the system of bribes at the company have emerged. A top executive at the German engineering giant has linked Pierer to a bribe of $10 million connected to a large government project in Argentina. The senior manager with Siemens Business Services (SBS) has told Munich prosecutors that Pierer brushed aside reservations about the payments expressed by Siemens managers.

The bribe was linked to a $2 billion (€1.2 billion) deal made in 1998 to provide the Argentinean Interior Ministry with electronic identity documents. According to another Siemens manager, the company had already paid bribes to the Interior Ministry under the administration of former Argentinean President Carlos Menem.

After Menem left office in 1999 the government cancelled the contract. According to the SBS manager, a Swiss consultancy firm was then paid $10 million by Siemens to revive the deal. The witness said that he and a colleague had discussed the payment with Pierer in person. They were told they should act like "soldiers of Siemens."

The manager says he spoke to two other board members, one of whom, Uriel Sharef, has reportedly also emerged as a suspect in the Siemens bribery scandal, about his concerns.

Pierer made it known through his lawyer that he did not tell the managers in question to acts like "soldiers of Siemens." His lawyer said this was not a turn of phrase Pierer would ever use.

It has been a bad week for the former Siemens boss. Pierer and other executives have long maintained they were unaware of the company's system of slush funds and bribes, but a number of recent media reports would seem to dispute that (more...). On Thursday Chancellor Angela Merkel distanced herself from the former chairman, announcing that she was dispensing with his services as a technology adviser.

Pierer resigned as the head of the Munich-based company in April 2007 as a result of the growing scandal. In 2006 the company discovered that its employees had been using slush funds to bribe clients to the tune of more than a billion euros in order to secure contracts. The scandal also forced the resignation of former Siemens CEO Klaus Kleinfeld.

The company has already been fined by the German authorities and is currently under investigation by the US Securities and Exchange Commission (more...). Meanwhile, Siemens itself is considering filing civil lawsuits (more...) against former top executives.