Daimler Pleads Guilty to Bribing Foreign Governments

Daimler has settled with the SEC for $185 million after being charged with bribery in 22 countries between 1998-2008. The BBC has the story:

(Daimler employees) were said to have given money and lavish gifts to help win contracts in countries including China, Russia, Thailand, Greece, and Iraq.

The Justice Department said that by “using offshore bank accounts, third-party agents and deceptive pricing practices, these companies saw foreign bribery as a way of doing business”. Daimler has since fired 45 employees implicated in the bribery.

Daimler’s agreement to pay $185m is broken down into $93.6m to end the US Justice Department investigation, and a payment of $91.4m to settle the civil case from the Securities and Exchange Commission, the US financial watchdog.

Back in 2008, German industrial group Siemens paid $800m to settle a US investigation into bribes paid to government officials in Argentina, Bangladesh, Iraq and Venezuela.

Seen in a certain light, the SEC itself is demanding a payoff in exchange for letting Daimler continue to do business in the States. If international bribery is truly a common way of doing business, then what’s stopping American companies from being involved (let alone implicated) as well?

The SEC used Daimler files marked “N.A.” (n├╝tzliche aufwendung, a kind of German code word for bribe) as proof that the company was involved in systemic bribes. One Daimler Nigeria executive even committed suicide after being questioned by the SEC. The Times Live has more on what this case could imply about Germany, one of the biggest exporters in the world:

The case raises many questions. How could a respected global corporation like Daimler apparently have violated German and international law for years by paying bribes in at least 22 countries? Could it be that the Daimler case is, in fact, typical for Germany, which until recently was the world’s largest exporter? Are German companies as good at corruption as they are at exporting?

The most interesting question, though, is whether abandoning bribery will mean that sales decrease at Siemens, MAN and Daimler. There are countries in which it is virtually impossible to conduct business, or at least win major contracts, without paying kickbacks to key decision-makers. In those cases, it remains to be seen whether the SEC will be just as quick to look into suspicions of corruption among US companies.

Two other German companies, electronics giant Siemens and the industrial group MAN, were found to have engaged in bribery on a large scale. On March 24, prosecutors searched the headquarters of industrial services provider Ferrostaal. The company is suspected of having used secret payments to promote the sale of submarines and tugs, and of having managed bribes for other companies.

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