FCPA: Marc Anthony Redux-We Come Not to Praise Daimler, But to Acknowledge It

Yesterday I discussed the apparent inaction of MF Global’s Board of Directors, when the former Chief Risk Officer left the company after “repeated clashes” with company CEO Jon Corzine, over Corzine’s risk strategy. Today we take a look at a Board of Directors which performed its duty in acting to stave off a potential compliance issue. In the December, 2011 issue of the Compliance Week Magazine, entitled, “Daimler Gets This One Right” author Richard Steinberg reviewed the actions of the Daimler Board of Directors regarding its recent termination of the head of Mercedes-Benz United States operations.

First a bit of history on Daimler. For those of you who do not keep score on such matters, Daimler comes in at Number 7 on the all-time Top 10 FCPA enforcement actions, with settlement amount of $185 million. This settlement was based upon actions which Steinberg termed “a massive and pervasive bribery scheme”. He described the scheme as “hundreds of bribes totaling tens of millions of dollars were paid to officials in no less than 22 countries over a 10-year period.” This scheme involved high level executives and was not simply some rogue employees or even a middle management group engaging is such actions. Perhaps the most troubling component of the Daimler bribery scheme for the author was that it also “involved the company’s internal audit office.” As with Siemens, it certainly appears that if the company had an anti-corruption compliance program but was employed German engineering corruption work-around.

In addition to its Top 10 of all-time award, Daimler agreed to a Deferred Prosecution Agreement (DPA) and oversight by an independent monitor, former FBI Director Louis Freeh. Freeh’s role as monitor continues under the terms of the DPA and he is also charged with evaluation of Daimler’s anti-corruption program going forward ...

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