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Daimler Agrees to Bribery Charges, Pays $200 million

Gill March 26, 2010

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Last week, Daimler AG has been charged with violating U.S. bribery laws. According to the charges, the company executives have bribed foreign officials with millions of dollars and luxury cars in order to win business deals.

The documents presented in the court further accuse Daimler AG of engaging “in a long-standing practice of paying bribes”. It states that bribes were being paid to win business deals in various countries including Russia, China, Turkey, Egypt, Nigeria, Iraq from 1998 to as recently as 2008.

Report reveals that hundreds of third party accounts were used to transfer the illegal payments.  It is said that in February 2000, Daimler AG gave an unknown Turkmenistan official a staggering sum of $450,000 and an armored Mercedes-Benz passenger car on his birthday. This ‘showering’ was done to help secure a deal to sell vehicles to the Turkmenistan government.

Another similar incident is reported to have occurred in Liberia in 1999. Daimler is also accused of breaking United Nations ‘Oil for Food Program’ by paying 10% as bribe to corrupt Iraqi government officials to sell them its vehicles.

The whole scandal was exposed in 2004 when an auditor protested against secret bank accounts being used to pay foreign officials. The auditor was later fired for his deed. In return, the auditor filed a complaint against the company which bought the issue in to light.

Nonetheless, Daimler is making efforts to have a swift end to the whole issue. The German company plans to settle all charges by paying $200 million to the U.S. Justice Department and Securities and Exchange Commission. Moreover, company’s Russian and German units will also plead guilty to the criminal charges.

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