Bribery and corruption -- WIKIPEDIA.
On April 1, 2010, Daimler AG's German and Russian subsidiaries each plead guilty to two counts of bribery charges brought by the U.S. Justice Department and the U.S. Securities and Exchange Commission. Daimler itself will pay US$185 million as a settlement, but the company and its Chinese subsidiary remain subject to a two-year deferred prosecution agreement which requires further cooperation with regulators, adherence to internal controls and meeting other terms before they are required to return to the court room. Daimler will face harsher penalties if the company fails to meet the terms of the agreement during the two-year period.
U.S. prosecutors accused key executives of Daimler, Daimler subsidiaries, and Daimler affiliates of illegally showering foreign officials with money and gifts between 1998 and 2008 to secure government contracts around the world. The investigation for the case revealed that Daimler improperly paid some $56 million in bribes related to more than 200 transactions in at least 22 countries (including China, Russia, Turkey, Hungary, Greece, Latvia, Serbia and Montenegro, Egypt and Nigeria, among other places) that, in return, awarded the company $1.9 billion in revenue and at least $91.4 million in illegal profits.
The SEC case was sparked in 2004 after David Bazzetta, a former auditor at then DaimlerChrysler Corp, filed a whistleblower complaint after he was fired for raising questions about bank accounts controlled by Mercedes-Benz units in South America. 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 U.S. laws.
In another attempt to silence Bazzetta, Daimler later offered to settle his termination of employment suit out of court and he eventually accepted a settlement. But Daimler's strategy with Bazzetta proved to be a failure as the U.S. criminal investigation for violating anti-bribery laws was already underway in what is one of the most wide-ranging cases brought against a foreign corporation.
According to the charges, the bribes were frequently made by over-invoicing customers and paying the excess back to top government officials or their proxies. The bribes also took the form of luxury European vacations, armored Mercedes vehicles for high-ranking government officials and a birthday gift to the then notorious dictator of Turkmenistan, Turkmenbashi (Saparmurat Niyazov), including a golden box and 10,000 copies of his personal manifesto, Ruhnama, translated into German. 
Investigators also found that the firm violated the terms of the United Nations' Oil-for-Food Programme with Iraq by giving kickbacks worth 10% of the contract values to officials within the Iraqi government, then led by Saddam Hussein. The SEC said the company made more than $4 million in profit from the sale of vehicles and spare parts in the corrupt Oil-for-Food deals.
U.S. prosecutors further alleged that some bribes were paid through shell companies based in the U.S. "In some cases Daimler wired these 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 court papers said.
Prosecutors said that Daimler engaged in a "long-standing practice" of paying bribes, due in part to a corporate culture that encouraged the practice.
"Using offshore bank accounts, third-party agents and deceptive pricing practices, these companies [Daimler AG, its subsidiaries and affiliates] saw foreign bribery as a way of doing business," said Mythili Raman, a principal deputy in the Justice Department’s criminal division.
"We have learned a lot from past experience," Dieter Zetsche, chairman of Daimler's board, said in a statement.
As per the agreement with prosecutors, the two Daimler subsidiaries admitted to knowingly violating the Foreign Corrupt Practices Act, which bars companies and their officials from paying bribes to foreign officials to win business. The Foreign Corrupt Practices Act applies to any company that lists its shares on U.S. stock exchanges. Daimler AG was listed with the symbol "DAI" on the NYSE, giving the Justice Department jurisdiction over the German car maker's payments in countries around the globe.
The primary case is USA v. Daimler AG, United States District Court for the District of Columbia, No. 10-00063.
Daimler Charged with Bribing Government Officials -- 'Motor Trend'
Daimler “engaged in a long-standing practice of paying bribes to ‘foreign officials,’” according to the court documents filed by the DOJ. “In some cases, Daimler wired these improper payments to U.S. bank accounts or to the foreign bank accounts of U.S. shell companies in order to transmit the bribe.”
Daimler settles US bribery charges -- 'The Guardian'
Bribes and kickbacks were allegedly attached to contracts supplying city buses in Saigon, transport for the world youth soccer championship in Nigeria in 1999, a deal to send fire engines to Croatia and even a supply contract with the Iraqi government that breached the terms of the UN "oil for food" programme.
The alleged bribes were often listed in Daimler's accounts under the German term "nützliche Aufwendungen" meaning "necessary payments" said the US justice department, which added that the term "was understood by certain employees to mean official bribe".
Daimler to settle charges of international bribery -- 'Digital Journal'
A 76-page indictment accuses Daimler of a series of charges including the use of secret bank accounts used to bribe foreign officials, false invoices, and phony price surcharges and disbursements originating from a “cash desk” at a Stuttgart factory.
According to a report in The Wall Street Journal, the SEC investigation began in 2004, shortly after David Bazzetta was fired for questioning South American bank accounts controlled by Mercedes-Benz. Bazzetta, a former auditor with then-DaimlerChrysler filed a complaint, alleging he was fired for raising the questions.
Report: Daimler to pay $200M over bribery scandal -- 'Autoblog.com'
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.
Justice News -- 'The United States - Department of Justice'
“In a decade-long scheme involving tens of millions of dollars, Daimler AG and three of its subsidiaries brazenly offered bribes in exchange for business around the world,” said Principal Deputy Assistant Attorney General Mythili Raman of the Criminal Division.