|SEC says Daimler made $56 million in bribe payments
| March 25, 2010
WASHINGTON (Reuters) - Car and truck manufacturer Daimler AG (XETRA:DAIGN.DE - News) allegedly earned $1.9 billion in revenue and at least $91.4 million in illegal profits from transactions tainted by bribes, according to the U.S. Securities and Exchange Commission.
There were more than 200 transactions in which it made at least $56 million in improper payments to foreign officials, the SEC said in its own charges filed this week with a U.S. court, offering new details about the breadth of the deals.
Daimler plans to settle the SEC and Justice Department's allegations by paying $185 million, and the company's Russian and German units will plead guilty to violating U.S. anti-bribery laws, court documents filed this week said.
The company will neither admit nor deny the SEC's charges, according to the proposed consent order. A Daimler spokesman was not immediately available for comment.
The transactions in at least 22 countries spanned almost a decade and involved at least 6,300 commercial vehicles and some 500 passenger cars, including luxury sedans given to senior foreign government officials, according to the SEC charges.
Some of the payments in question were routed to U.S. bank accounts or to foreign bank accounts of shell companies in the United States, the government has alleged.
In an example of the gifts extended, Daimler tried to curry favor to enter the Turkmenistan market by giving two armored vehicles worth at least 550,000 euros to a senior government official, the SEC said. The company also had a book authored by the official translated into German as a gift.
In another instance, Daimler set aside 11,000 euros to pay for a lavish vacation through Europe including Paris and Venice for six Chinese officials, the SEC said, adding that the company paid for 16 such trips in connection with $120 million in vehicle sales to the Chinese government customers.
Additionally, the SEC accused Daimler of paying kickbacks in the United Nations' Oil for Food Program in Iraq that earned the company more than $4 million in profits from contracts involving the sale of vehicles and spare parts.
The securities regulator began its probe in 2004 when an auditor complained he was fired for protesting secret bank accounts used to pay foreign officials.
Daimler has previously acknowledged payments that raised concerns about legal violations and has said the company was cooperating with investigations by the Justice Department and the SEC.
A court hearing is set for April 1 to present the settlement agreement to a U.S. judge who must approve it. If sanctioned, it would be the latest in a series of high-profile bribery cases concluded by the U.S. government.
Earlier this year, BAE Systems Plc settled charges by the United States and Britain, agreeing to pay about $450 million.
(Reporting by Jeremy Pelofsky, editing by Matthew Lewis)