German car and truck maker Daimler AG was charged on Tuesday with violating US bribery laws by showering foreign officials with millions of dollars and gifts of luxury cars to win business deals.
Daimler plans to pay US$185 million to settle charges by the US Justice Department and Securities and Exchange Commission (SEC), while its German and Russian units plan to plead guilty to the criminal charges, a source familiar with the case said.
US prosecutors accused the maker of Mercedes cars of engaging “in a long-standing practice of paying bribes” to secure deals in Russia, China, Turkey, Egypt, Nigeria, Iraq and at least 16 other countries between 1998 and early 2008, criminal information filed in a US court showed.
Examples in court documents included an armored car given to an official in Turkmenistan and another to a Liberian official.
The US Justice Department charged Daimler with conspiracy and falsifying books and records under the Foreign and Corrupt Practices Act, which makes it illegal to pay bribes to obtain or keep business overseas.
Criminal informations are typically used in plea agreements with the US government.
Daimler owned US automaker Chrysler from 1998 to 2007. The SEC probe began in 2004 when an auditor complained he was fired for protesting secret bank accounts used to pay foreign officials.
A Justice Department spokeswoman declined to comment on the court papers. A Daimler spokeswoman also declined to comment until a hearing scheduled for next Thursday.
If the settlement proceeds, it would mark the latest in a string of recent agreements between the US and major companies to settle foreign bribery allegations. Siemens agreed in December to pay US$1.3 billion to end corruption probes in the US and Germany.
As part of the settlement, Daimler AG will not plead guilty or admit any wrongdoing in the Justice Department and SEC cases, said the source familiar with the case. The company will pay US$93.6 million to resolve the Justice Department probe and US$91.4 million for the SEC case, the source said.
Daimler and its China unit will enter a two-year deferred prosecution agreement, the source said.
The charges filed on Tuesday detailed transactions spanning from 1998 to early 2008 that involved hundreds of payments worth tens of millions of dollars to foreign officials in return for contracts worth hundreds of millions of dollars.
The SEC opened its probe after David Bazzetta, an auditor at DaimlerChrysler Corp, filed a whistle-blower complaint.
Bazzetta alleged that he learned in a July 2001 corporate audit executive committee meeting in Stuttgart that business units “continued to maintain secret bank accounts to bribe foreign government officials,” though the company knew the practice violated US laws.
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