Former FBI Director Louis Freeh monitoring Daimler settlement

Former FBI director monitors Daimler

WASHINGTON — Former FBI Director Louis Freeh will monitor the cleanup of German automaker Daimler AG, which has paid tens of millions of dollars in bribes through subsidiaries to officials of at least 22 foreign governments, according to court papers filed Wednesday.

Under an agreement with the Justice Department, the ex-FBI director will be an independent corporate compliance monitor who will assess Daimler’s performance for the next three years, the court papers said.

The government’s court papers alleged the payments were designed to help win contracts with foreign government customers for the purchase of hundreds of millions of dollars worth of Daimler vehicles. Prosecutors said these payments violated the Foreign Corrupt Practices Act, which prohibits improper payments to officials of other countries.

Daimler AG will pay a $185 million settlement and avoid indictment when two of its subsidiaries enter guilty pleas in federal court April 1, according to two people knowledgeable about the outcome of the five-year probe. They spoke on condition of anonymity because the deal still must go before a federal judge.

The settlement includes paying $93.6 million to the Justice Department and $91.4 million to the Securities and Exchange Commission, the two people said.

Once approved by a judge, the deal between the government and Daimler would put a deferred prosecution agreement in place that enables the parent company to escape indictment if it reforms the way it does business.

Freeh’s assessments of Daimler performance will be an important factor in determining whether the parent company is ultimately charged with a crime or not.

Freeh was brought in a couple of years ago by the company to monitor the cleanup as the Justice Department’s investigation of Daimler proceeded, according to two people familiar with the investigation of Daimler. They requested anonymity because a judge must still consider the settlement.