More German bribery: Daimler under investigation for alleged illegal payments to Greek officials

Editors note: This article was first published by Makedonia in Greek and is republished here with permission. Translation by TPPI.

By Nikos Iliades

The investigation is part of the wider investigation which began about four years ago and concerns bribes which appear to have been given to numerous state and private company officials in about 22 countries by the German car manufacturer Daimler, maker of Mercedes-Benz vehicles.

The investigation into Daimler began following scrutiny of the global sales practices of the German car manufacturer by the US Justice Department and the Securities and Exchange Commission (SEC). The trigger for the American investigation were allegations of secret accounts and cases of bribery. The bribes were either paid in cash or in the form of luxury vehicles or even properties, as in the case of a Chinese official who was found with an apartment in Houston. Daimler admitted that it had paid bribes worth tens of millions to officials of foreign governments and towards executives of private companies in at least 22 countries in order to secure hundreds of millions of dollars worth of sales of its vehicles in the ten year period between 1998-2008.

More specifically, American investigators accused the German company that it was, “involved in the long-standing practice of bribery” in order to secure deals in countries including Russia, China, Turkey, Egypt, Nigeria, Iraq, Hungary, Greece, Latvia, Serbia, Montenegro, Croatia, Uzbekistan, Vietnam, Indonesia, Turkmenistan, Thailand and at least five other countries.

The audit of OASTH

Aside from the evidence of the Daimler bribes collected by American investigators which implicated Greece, the case as far as our country is concerned ‘came together’ even further from other findings. According to court sources, the investigation in Greece which has concerned the Greek legal system since 2012, was given a significant boost when an account was identified in a neighbouring country through which it appears money was transferred that was destined for the bribery of state officials and executives of private companies in Balkan countries. According to reliable information, last October German financial inspectors, accompanied by their Greek counterparts, made a surprise raid on the offices of OASTH. According to the same sources the inspectors demanded all of the files which concerned the purchase of 29 articulated Mercedes buses which were purchased by the organisation in 2007-2008.

“Indeed Greeks and German inspectors came and asked us for details about that purchase,” the president of OASTH Christos Stefanidis confirmed. He stated that, “that procurement of the buses took place after an international tender which had been announced in 2004.” According to Mr Stefanidis, “The Organisation, beyond that visit by the inspectors, has had no other trouble.”

Mercedes vehicles purchased by the state in Greece include the luxury passenger cars bought by government services, parliament and ministries, military vehicles, trucks, people carriers, waste disposal trucks, fire trucks, and ambulances. For the procurement of these numerous tenders have been issued both at a state and municipal level, as have for their yearly maintenance. Clients of Mercedes of course include OASTH and its counterpart in Athens, OASA.

President Schulz’s stonewall

Following the revelation that the case of the Daimler bribes also concerns our country, the head of the company in Athens was transferred to Thailand while there were also other extensive administrative changes including that of the position of Head of Sales and Marketing.

The issue of German bribes in Greece was raised in the European Parliament by the SYRIZA MEP Nikos Chountis. Last April Mr Chountis asked the European Commission to investigate the bribes which were given in Greece from various companies including Daimler. He also asked the European Commision to explore why Germany was the only country of the EU that had not ratified, “either the Criminal Law Convention on Corruption of the Council of Europe, nor the UN’s Convention against Corruption”, and asked whether “the competent services of the Commission are following the particular case.”

“To my great surprise I saw, instead of an answer on the part of the Commission, an answer from the offices of [Parliamentary President] Mr Schulz because he deemed that the issue was, ‘beyond the competency and responsibility of the Commission,” Mr Chountis stated to 'Makedonia'. The Syriza MEP attributed Mr Schulz’s position to the fact that he himself is German and to the fact that at that time (shortly before the European elections) the President of the European Parliament was attempting to secure the support of the German chancellor for the position of the head of the Commission. (Read also TPPI's story regarding the MEP's question and Mr Schulz's answer). 

Note that with regards to the bribes Daimler paid towards officials in the US, the German car manufacturer admitted its guilt and settled the case out of court, paying the American government damages worth 185 million dollars. Also of note is the suicide of the then head of Daimler in Nigeria. In Greece the judicial investigation continues.