• Feb 15, 2010
For a number of years Daimler kept secret accounts used by executives specifically for the purpose of making illicit payments to foreign officials – a practice otherwise known as bribing. The "improper payments" were made primarily in Africa, Asia and Eastern Europe from banks in those regions. The bribery itself wasn't Daimler's problem – the fired whistleblower and the U.S. Department of Justice and Securities and Exchange Commission were.

Daimler auditor David J. Bazzetta said he complained about the irregular accounts and payments, and was fired for his actions. He took his case to federal court, as well as doing a bit of whispering to DOJ and SEC officials. That lead the DOJ to investigating whether Daimler contravened the Foreign Corrupt Practices Act of 1977 by bribing government officials, which covers any company with operations in the U.S.

Daimler isn't the only company with slush funds, and Daimler isn't the only one to get caught – Siemens, BAE Systems, Dooney & Bourke and Willbros Group are huge fish to recently end up in the net. And like a few of those others, Daimler is ready to pay to settle the claims against it to the tune of $200 million. Neither the DOJ nor the SEC has stated that the case is closed yet, but if there's one thing we know now it's that crime doesn't pay. Or maybe that it pays double.

[Source: Bloomberg | Image: Andreas Rentz/Getty Images]


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    • 1 Second Ago
  • 10 Comments
      • 4 Years Ago
      So help me understand this. Daimler got caught bribing government officials in other parts of the world, and now the US is gouging them for $200 million? How is this any different? We just do it through our legal system, while in foreign countries it's done under the table.
        • 4 Years Ago
        They owned Chrysler there for a long time. It depends if you can seperate when Daimler was acting in Chrysler's interest or not or if that even matter under the law.
        • 4 Years Ago
        There is a big difference between paying a bribe and being fined. When you pay a bribe it buys direct influence from the person you pay it to, there is a quid pro quo. In the case of being fined what are you getting for your money from the person who is fining you?

        The lobbying of Congress is closer to being like bribery than fines are.
      • 4 Years Ago
      "but if there's one thing we know now it's that crime doesn't pay. Or maybe that it pays double."

      Exactly. where does this $200 million get paid to? to the U.S. Government? So they get in trouble for giving money to government officials, and their punishment is to give more money to another government?

      I don't know what a better punishment would be. But that is like the cop that arrests a kid for having weed, and then takes it home and smokes it.
        • 4 Years Ago
        More like the cop confiscates it and it does into some locker where it is later put destroyed or somehow sold and the money put in the general fund.

        When you pay a fine, you make the check out to the government, and the receiving official doesn't take it home for their own use.
      • 4 Years Ago
      Meh. In some parts of the world this is just the cost of doing business. The reality is that you pay bribes or you don't do business at all. In a perfect world these penalties for bribery are perfectly reasonable, but as it is, they're pretty harsh.
      • 4 Years Ago
      Bribing foreign officials and companies for supplies, projects, etc is one of the reasons Peter Eigen started Transparency International. He found that this and corruption was one of the main reasons why aid to Africa never had the intended effects even after millions of dollars of aid. Correct me if I'm wrong, but lot of European companies do this?
      • 4 Years Ago
      So help me understand this. Daimler got caught bribing government officials in other parts of the world, and now the US is gouging them for $200 million? How is this any different? We just do it through our legal system, while in foreign countries it's done under the table.
      • 4 Years Ago
      I'd love to see records from this 'fund' about the time the "merger of equals" was taking place.
      • 4 Years Ago
      I believe that Daimler probably gained more that 200 million from these bribes so it was definitely worth it to them.