Toyota isn't the only powerhouse auto firm that likes to get involved in shady business practices. The Detroit News reports that Mercedes-Benz's parent company Daimler AG has paid a lot of cash - "tens of millions" in the form of bribes - to governments and/or officials of twenty-two (yes, that's 22!) countries. That's a lot.
The Justice Department has officially charged the manufacturer with violating the Foreign Corrupt Practices Act, which prevents U.S. firms from paying off (or offering "gifts" to) foreign officials (for an explanation on how this affects Germany, scroll down for an excerpt from FCPA Enforcement).
Between 1998 and 2008, Daimler is said to have been "investing" in China, Croatia, Egypt, Greece, Hungary, Indonesia, Iraq, Ivory Coast, Latvia, Nigeria, Russia, Serbia and Montenegro, Thailand, Turkey, Turkmenistan, Uzbekistan, and Vietnam (and more!) with the intent of "securing contracts with government customers for the purchase of Daimler vehicles valued at hundreds of millions of dollars."
It's believed that Daimler earned upwards of $50 million by distributing bribes "through shell companies and in one case, Daimler created a specific U.S. shell company to pay bribes."
And now, a chance for fans of 'Amurrica' and freedom to get pissed off: Daimler scored contracts that American car builders were going after! Those sneaky rascals; it's like a double-whammy.
Other examples include Russia (between 2000-2005), where $5 million was paid to government officials, and Turkmenistan (2000), where a $300,000+ armored S-Class was awarded as a birthday present to a "high-level executive [government] official".
"Investigators reportedly traveled to 25 countries and interviewed dozens of people, including former Daimler chairman Juergen Schrempp and other executives. Investigators also uncovered evidence of secret bank accounts."
All this is not to say Daimler hasn't tried to rectify some of the problems; they cut net income down by $84.5 million and operating profit by $21 million for financial year 2005 - and released executives - when it was discovered that some "'improper payments' were made in Asia, Africa and Eastern Europe."
Reuters reports, "The charges consist of two counts: conspiracy, and falsifying books and records under the Foreign Corrupt Practices Act."
It's been speculated that Daimler (more like CRIME-ler) will be slapped with a $185 - 200 million fine. Ouch.
- By Phil Alex
From FCPA Enforcement:
In 1988, Congress directed the Executive Branch actively to seek to level the playing field by encouraging our trading partners to enact legislation similar to the FCPA. These efforts eventually culminated in the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the "OECD Convention").
On November 21, 1997, the 29 member nations of the Organization for Economic Cooperation and Development ("OECD") and five non-member nations adopted the "Convention on Combating Bribery of Foreign Public Officials in International Business Transactions." The OECD Convention, which was signed on December 17, 1997, and ratified by the U.S. Senate on July 1, 1998, sets forth the essential elements of a foreign corrupt practices statute that each signatory county is obligated to enact into law.
