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    Home » SEC fines John Deere about $10 million for bribery scheme in Thailand
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    SEC fines John Deere about $10 million for bribery scheme in Thailand

    userBy userSeptember 13, 2024No Comments4 Mins Read
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    The company settled charges without admitting or denying the SEC’s findings, which revealed bribery involving cash, luxury trips, and other favors to Thai officials.

    By Sky Chadde, – Investigate Midwest

    Sep. 13, 2024 11:21 am



    In this April 9, 2019 photo, wheels are attach as workers assemble a tractor at John Deere’s Waterloo assembly plant. (Zach Boyden-Holmes/Telegraph Herald via AP, File)

    John Deere, the major farm equipment manufacturer based in Moline, Illinois, was fined about $10 million for a bribery scheme led by its subsidiary in Thailand, according to the Securities and Exchange Commission.

    The fine, announced Tuesday, comes after the company’s subsidiary, named Wirtgen Thailand, bribed Thai officials to win business in the country, the SEC said. The scheme violated the Foreign Corrupt Practices Act, and John Deere did not admit or deny the agency’s findings.

    Deere acquired Wirtgen in 2017. After the acquisition, Wirtgen bribed officials at the Royal Thai Air Force and at the country’s transportation agency with cash payments, massage parlor visits and international travel, according to the SEC. The scheme continued through 2020 and led to $4.3 million in profit.

    The “improper payments” were recorded as legitimate expenses in Deere’s books, the SEC said.

    “Deere failed to timely integrate (Wirtgen) into its existing compliance and controls environment, resulting in these bribery schemes going unchecked for several years,” said Charles E. Cain, Chief of the SEC Enforcement Division’s FCPA Unit, in a news release.

    Deere agreed to a civil fine of $4.5 million and additional fees totaling about $5.4 million.

    In a statement to Investigate Midwest, representatives for John Deere said its subsidiary’s actions were in conflict with its dedication to high ethical standards.

    “Upon discovering these issues, we conducted a thorough internal investigation and fully cooperated with the SEC,” the statement reads. “These allegations represent a clear violation of our company policies and ethical standards. Furthermore, they are in direct conflict with our core values — particularly our commitment to integrity — and we strongly condemn such practices. The individuals involved in this matter are no longer with the company.”

    John Deere did not respond to a question about why, in the SEC’s estimation, it did not install compliance controls in a timely manner.

    Wirtgen’s own code of conduct prohibited employees from giving “absolutely anything” to government officials to influence decisions on contracts. To obscure the payments, sometimes Wirtgen employees would add expenses at massage parlors to other receipts, the SEC said. During one visit to a massage parlor, Wirtgen entertained 15 people from one government agency.

    After one parlor visit, a manager emailed his boss to say the visit seemed to be working. “After a few months fighting to get this deal done, I did whatever channel and opportunities to turn back the … result,” he wrote, according to the SEC.

    The SEC said the massage parlor visits led to millions in government contracts.

    Another tactic was hosting officials on “elaborate sightseeing expeditions” that were disguised as visits to overseas factories.

    One 2019 visit with government officials was to Germany. The trip’s invoice listed its purpose as “to visit factory,” but that didn’t happen, the SEC said. Instead, over eight days, Wirtgen spent almost $50,000 on shopping and luxury hotels in the Alps in Switzerland. Shortly after the trip ended, Wirtgen was awarded two contracts worth about $2 million.

    Wirtgen made direct cash payments to officials and also used an intermediary, the SEC said.

    At one point, a manager texted a colleague, “will have candy money for you too, next week.” They also discussed how to deliver the money. “Prepare 5 envelopes. And withdraw cash,” the manager said. The colleague replied, “For the five envelopes should I go ahead and put 20,000 in each?” The manager replied he’d do it himself.

    Wirtgen employees also bribed another commercial company to get its business, the SEC said. The industrial machines Wirtgen sold required spare parts that allowed Wirtgen, and Deere, to profit through 2023, the SEC said.

    Wirtgen employees took executives of the company, which is not named in the SEC’s records, to France and Germany. The trips cost hundreds of thousands of dollars, the SEC said.

    The SEC said John Deere did not maintain a system that would have prevented the bribery scheme. Deere’s “controls were insufficient to detect or prevent these improper payments that occurred for a period of several years,” the SEC concluded.

    Investigate Midwest is an independent, nonprofit newsroom. Its mission is to serve the public interest by exposing dangerous and costly practices of influential agricultural corporations and institutions through in-depth and data-driven investigative journalism. Visit it online at www.investigatemidwest.org





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