On April 1, 2010, a federal judge in Washington D.C. approved German automotive giant Daimler AG’s $185 million settlement with the United States related to allegations of a global bribery scheme. In the Securities and Exchange Commission case, Daimler was accused of taking part in a long-standing practice of bribing foreign officials to the tune of a collective $56 million. Allegedly offered in 22 countries, these bribes were made in exchange for government contracts supposedly worth hundreds of millions of dollars. The case against Daimler AG initially emerged after an auditor of the company filed a whistleblower complaint. The primary case was subsequently filed in the U.S. District Court for the District of Columbia.
The claims brought against Daimler AG were based upon violations of the Federal Foreign Corrupt Practices Act (15 U.S.C. § 78dd-1, et seq.), which, among other things, prohibits the bribing of foreign officials to secure an improper business advantage. The Act applies to any entity that lists its shares on U.S. exchanges and, in addition, grants the U.S. Justice Department jurisdiction over a broad range of foreign transactions and overseas companies. Consequently, the U.S. government could bring these claims against the German car maker in a U.S. court without worrying about the usual jurisdictional hurdles that arise when suing foreign entities in the U.S.
This case marks another substantial step in the U.S. government’s global efforts to curb corrupt corporate activity.