DAIMLER PAYS $185M TO SETTLE BRIBERY CASE
A US court gave the green light on Thursday for Daimler to pay $185m in penalties as part of a deal to settle bribery charges brought by the Justice Department and Securities and Exchange Commission against the German car and truck maker.
The deal, first disclosed last week, also includes guilty pleas by Daimler's German and Russian units to two counts of violating US anti-bribery laws. The Justice Department has agreed not to prosecute the carmaker's Chinese subsidiary subject to fulfilment of various conditions.
Daimler has agreed to the appointment of an independent monitor to oversee compliance with the deal.
The settlement marks the culmination of one of the most extensive anti-bribery cases brought by the US authorities against a foreign company, and is a further example of an intensifying drive by Washington to enforce anti-bribery provisions in the Foreign Corrupt Practices Act. The Daimler investigation began in late 2004.
In the complaint filed last week, the Justice Department attributed Daimler's “long-standing violations” of bribery rules to a lack of central oversight over foreign operations, a “corporate culture that tolerated and/or encouraged bribery” and the involvement of high-ranking executives, including the heads of its overseas sales division, its internal audit office and several subsidiaries and affiliates.
The SEC said in a statement that the carmaker “engaged in a repeated and systematic practice of paying bribes to foreign government officials to secure business in Asia, Africa, Eastern Europe and the Middle East”.
Daimler allegedly paid at least $56m in bribes over more than a decade covering more than 200 transactions in at least 22 countries. Among others, it paid kickbacks to Iraqi ministries to secure sales of motor vehicles and spare parts under the United Nations Oil for Food Programme.
The SEC said that it had also made “tens of millions of dollars in corrupt payments” to government officials in Russia, China, Vietnam, Hungary, Latvia, Croatia and Bosnia.
The settlement includes $91.4m in disgorgement to settle the SEC's charges and $93.6m in fines to settle charges in criminal proceedings.
Dieter Zetsche, Daimler's chairman, said on Thursday that “compliance has high priority at Daimler. We have learnt a lot from past experience. Today, we are a better and stronger company, and we will continue to do everything we can to maintain the highest compliance standards”.
Daimler dismissed about 45 employees and disciplined another 300 in the course of the bribery investigation. It has already put numerous internal measures in place to improve corporate governance, including the appointment of local compliance officers.