More details have emerged of how German auto-maker, Daimler AG, distributed bribes to public officials in Nigeria in exchange for government patronage. The automaker had, in April paid $185 million (N28 billion) to settle allegations that it had violated U.S. anti-bribery laws by giving bribes to foreign government officials to win contracts.
A complaint filed against the company by the United States’ Security and Exchange Commission and obtained by NEXT yesterday indicated that the bribes were distributed to top Nigerian government functionaries through officials of the Anambra Motor Manufacturing Company (Anammco) with which Daimler had a joint venture agreement. The foreign company made the payments, amounting to N2.3 billion, between 1998 and 2005, to corner sales contracts worth approximately $73 million, from at least seven different government customers.
The bribe money given to Nigerian officials comprised of DM 3.9 million, $1million and 230, 000 Euros. Daimler dished out the slush fund - exporting some of it in raw cash from its headquarters in Germany - while unnamed ANAMMCO officials help funnel the money to corrupt government functionaries who approved the contracts. In one instance, the document stated, “Daimler employees withdrew DM 400,000 and $150,000 from the cash desk (in Germany) and transported the Marks. and US dollars to Nigeria to pay bribes to government officials.”
Daimler, ANAMMCO and Nigerian officials involved in the scandal were not named in the document because they are not U.S. citizens. But analysts say if Nigeria has the political will to get to the bottom of the case, it can get full details of the investigation from the US Department of Justice by virtue of the Mutual Legal Assistance Treaty it has with the States. While the names of the allegedly corrupt officials remain under wraps, their crimes and modus operandi are clear.
Investigators made the following findings regarding the corrupt payments to Nigerian officials: Daimler made the bribe payments and kept funds that were not properly recorded on its books through four TPAs (third party accounts) that were held by Anambra Motor Manufacturing Company (“Anammco”), a then Daimler-controlled joint venture between Daimler and the military government. Daimler later sold its interest in the joint venture in 2007.
Moreover, a portion of Daimler’s proceeds from the sale of vehicles in Nigeria was credited to the Anammco third party accounts. Senior executives of Daimler then used a portion of these credits to fund improper payments to foreign government officials. Between 1998 and 2005, Daimler made approximately N2.3 billion in improper payments to Nigerian government officials. These payments were either improperly recorded in Daimler’s books and records or were not recorded at all and were made as a result of weak internal controls.
The third party accounts were controlled by a former head of overseas sales, and the former head of Daimler’s Nigerian office through which Daimler carried out its business in Nigeria (the “Nigerian representative office”); he was also the managing director of Anammco.
These two former executives had decision-making authority over the sales operations in Nigeria, and they were able to direct large-scale bribe payments. For example, in order to obtain a deal to sell armoured vehicles to the Nigerian government, the former head of overseas sales authorized the former head of Daimler’s Nigerian representative office to debit an Anammco TPA and pay DM 200,000 and OM 50,000, respectively, to two senior Nigerian government officials, who had decision-making authority over the contract. Daimler employees then wired the funds to the personal foreign bank accounts of these two officials in England and Germany.
Similarly, in order to obtain another deal involving the sale of commercial vehicles to a Nigerian state-owned entity, the former head of the Nigerian representative office effectuated a debit of nearly €200,000 from an Anammco TPA and had the funds wired from a Daimler bank account in Germany to a bank account in England held by the entity’s managing director.*The former head of Overseas Sales and the former head of the Nigerian representative office also routinely withdrew large sums of cash in various currencies from Daimler’s corporate cash desk in Germany to make bribe payments to secure business in Nigeria.
Daimler failed to adequately monitor the amount of cash that could be withdrawn through the cash desk or understand the purpose of the withdrawals. The former head of the Nigerian representative office, for example, was authorized by the former head of Overseas Sales to debit an Anammco TPA to obtain DM 400,000 in cash from the cash desk for use towards the hotel stay, travel, dining and shopping of a senior Nigerian government official, his delegation and their relatives. In connection with the contract to sell buses to a Nigerian state-owned entity, the former head of the Nigeria representative office withdrew $110,000 in cash from the cash desk and delivered the funds from Germany to Nigeria to make bribe payments to government officials affiliated with the entity.
At one point, the former head of the Nigerian representative office and a senior sales manager for Anammco opened up at least two Swiss bank accounts, which were funded by credit balances in Anammco TPAs. The former head of Overseas Sales authorized approximately DM 2.1 million to be transferred from Anammco TPAs into these Swiss bank accounts for payment to government officials to obtain sales contracts with various agencies of the Nigerian government. In all, Daimler is believed to have made improper payments totalling at least $56million to secure business in 22 countries, including Nigeria.
Nigerian probe
Chairman of the Economic and Financial Crimes Commission, Farida Waziri, on Monday said her agency had commenced investigations into the matter. cials and representatives of Daimler and Anammco in Nigeria,” Mrs Waziri said. “We have equally gone ahead to seek the assistance of the Attorney-General to obtain the certified true copy of the US judgment from the America authorities. We are working hard to see how we can crack some of these high profile cases with international dimensions”..
