Daimler scandal

A case of Bribery and Corruption

Daimler was accused of bribing foreign officials for a period of 10 years (1998-2008) now, in order to secure government contracts with the states in question. On 1st of April this year, the German and Russian Daimler subsidiaries admitted to the accusations, which resulted in them being fined with the sum of $185 million for their illegal activities


By ROXANA CIUPARIU (roxana.ciupariu@wavemagazine.net)
from Bucharest, ROMANIA


In the beginning of April 2010 Daimler has been brought to court by US prosecutors under the accusation of having paid millions of dollars under the form of bribery to about 22 governments across the world. The German and Russian Daimler subsidiaries admitted to the accusations and are supposed to pay a large sum of money, being also under monitoring for a trial period of two years, with the threat of facing even harsher penalties if they do not comply with the terms of the court order.

Daimler was accused of bribing foreign officials for a period of 10 years (1998-2008) now, in order to secure government contracts with the states in question. On 1st of April this year, the German and Russian Daimler subsidiaries admitted to the accusations, which resulted in them being fined with the sum of $185 million for their illegal activities. Furthermore, the big corporation will be under surveillance, with the threat of facing even harsher penalties if it does not comply with the terms of the 2-year agreement according to Court ruling. Also, "former FBI Director Louis Freeh will serve as the independent monitor to oversee Daimler's compliance with anti-bribery laws", informs Reuters.

However, in the end of April, the Russian Defence Minister dismisses the 'corruption' reports, while Russian authorities are investigating the situation. In the same time, Russia is asking the German auto giant to refute the allegations regarding the involvement of several high-class Russian officials into the whole corruption-bribery story.

All this inquiry into bribery and corruption ended up making the Daimler case one of the most extensive cases carried against a foreign corporation. And with the admission of fault by two of its subsidiaries, high-ranking Daimler officials started to express their opinions and their repentance. "We have learned a lot from past experience," stated Dieter Zetsche, chairman of Daimler's board. "Today, we are a better and stronger company, and we will continue to do everything we can to maintain the highest compliance standards", quotes him Reuters.

A Peek into the Story

Although Daimler was being suspected for a while now, the entire story burst into flames when an auditor, David Bazzetta, found himself unemployed after asking about some bank accounts, which were later proven to be held for bribery money. When he wanted to sue in court the dislodging decision, Daimler tried to buy his silence by offering him a generous compensation for his demission. Nonetheless, the U. S. Securities and Exchange Commission (SEC) was already investigating the financial characteristic of Daimler, and intervened in time to create a case for US Courts.

The bribery consisted of diverse "incentives", from and overloaded payment into the bank accounts of some top government officials from countries such as China, Russia, Greece, Thailand, etc, to luxurious cars and quite expensive and extravagant vacations, according to France 24. One additional detail is the discovery made by investigators that Daimler not only subjected to bribery, but also violated UN's Oil for Food Programme with Iraq by paying 10% kickbacks to Iraqi officials so it could sell them vehicles.



(Published: 10.05.2010.)