The encyclopedia · Legal & Compliance · Legal decision · 2015–2020
Deere's Thai subsidiary bribed officials with cash, trips and massage parlours
Wirtgen Thailand recorded sham consulting fees and 'factory visits' as business expenses — the SEC found $4.3M in improper payments.
Deere & Company
What happened
Deere & Company, the maker of John Deere agricultural and construction equipment, acquired the German road-equipment group Wirtgen in 2017. Wirtgen's Thai subsidiary had been making improper payments to Thai government officials to win contracts: cash, sham consulting and commission fees, lavish 'factory visit' trips, meals, and massage-parlour entertainment, all recorded in the books as legitimate business expenses.
In September 2024 the SEC charged Deere with violating the Foreign Corrupt Practices Act's books-and-records and internal-accounting-controls provisions. The subsidiary's payments totalled $4.3 million in disgorgement, plus $1.1 million in interest and a $4.5 million civil penalty — roughly $10 million in all.
The case showed how an acquisition can import a subsidiary's compliance failures: the conduct predated Deere's ownership of Wirtgen, but the parent inherited the liability.
Why it happened
- A subsidiary in a high-corruption market can normalise payments that the parent's controls would flag at home.
- Sham consulting fees and 'factory visits' are the oldest FCPA patterns — they work because they look like ordinary business expenses.
- Acquiring a company means acquiring its books, and the books carry the liability.
The lesson
Due diligence on an acquisition must include the target's expense reports, not just its revenue — the bribe is in the books long before it is in the headlines.
Sources
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