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DOJ accuses Daimler AG of paying bribes overseas

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WASHINGTON -- The Justice Department has accused car manufacturer Daimler AG of paying tens of millions of dollars in bribes to officials of at least 22 foreign governments over the course of a decade.

A case filed in federal court in Washington said the German-based company engaged in the conduct from 1998 to 2008 in countries that included China, Russia, Egypt and Greece.

The payments were allegedly aimed at helping secure contracts with government customers for the purchase of Daimler vehicles valued at hundreds of millions of dollars.

Daimler AG and three of its subsidiaries were charged with conspiracy and with violating the Foreign Corrupt Practices Act, which prohibits improper payments to officials of other countries.

The charges came in a court filing called an "information," a document which typically signifies that the person or company charged is preparing to enter a guilty plea as part of a deal with the government to avoid trial.

Daimler spokesmen in New York did not immediately respond to a request for comment Tuesday.

Under a previous name in the late 1990s, Daimler AG merged with U.S.-based Chrysler Corp. DaimlerChrysler several years ago sold Chrysler to private equity firm Cerberus Capital Management.

Daimler engaged in a long-standing practice of paying bribes through the use of offshore bank accounts, deceptive pricing arrangements and third-party intermediaries, according to the court filing. It said that the bribe payments often were described inside the company as commissions, special discounts or "necessary payments."

Daimler wired the improper payments to U.S. bank accounts or to the foreign bank accounts of U.S. shell companies in order to transmit the bribe, the Justice Department asserted in the court papers filed Monday.

The papers said that in at least one instance, a U.S. shell company was incorporated for the specific purpose of entering into a sham consulting agreement with Daimler in order to conceal improper payments routed through the shell company to foreign government officials.

Among the other countries in which Daimler AG allegedly made improper payments were Croatia, Hungary, Indonesia, Iraq, Ivory Coast, Latvia, Nigeria, Russia, Serbia, Montenegro, Thailand, Turkey, Turkmenistan, Uzbekistan and Vietnam.

The subsidiaries of Daimler AG that were charged are Daimler Export and Trade Finance GmbH, DaimlerChrysler China Ltd. and DaimlerChrysler Automotive Russia SAO.

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