On September 10, 2024, the Securities and Exchange Commission announced that it had reached a nearly $10 million settlement with Illinois-based Deere & Company (also known as “John Deere”), a global manufacturer of agricultural machinery and heavy equipment, to resolve allegations that one of its subsidiaries, Wirtgen Thailand, paid bribes in violation of the Foreign Corrupt Practices Act. According to the SEC, Wirtgen Thailand made improper payments to several Thai government officials in order to secure government contracts. Wirtgen Thailand also allegedly engaged in commercial bribery to obtain sales with an unnamed private company. According to the SEC, because Wirtgen Thailand’s books and records, which contained improper accounting of these payments, were consolidated into John Deere’s, John Deere violated the accounting provisions of the FCPA.
According to the SEC’s order, John Deere acquired the Wirtgen Group, including its subsidiary Wirtgen Thailand, in December 2017. The SEC stated that John Deere failed “to fully integrate” Wirtgen Thailand into John Deere’s system of internal controls. As a result, from late 2017 through 2020, Wirtgen Thailand’s employees allegedly bribed officials in Thailand’s Department of Rural Roads, Department of Highways, and Royal Thai Air Force, according to the SEC Order. The SEC stated that the bribes included cash payments made directly to officials and through third-party agents, payments for visits to massage parlors, and a lavish sightseeing trip disguised as a “factory visit.” The SEC also identified similar conduct by Wirtgen Thailand with respect to the employees of a private sector customer.
The SEC Order stated that all of the payments were falsely reported in the company’s books and records as legitimate expenses, in violation of the company’s policy and the books and records provision of the FCPA. Separately, the SEC Order said that the failure to integrate Wirtgen Thailand into John Deere’s anti-corruption program meant John Deere had failed to design and maintain a sufficient system of internal controls, in violation of the internal controls provision of the FCPA.
Without admitting or denying the SEC’s findings, John Deere agreed to the entry of a cease-and-desist order. The company also agreed to disgorge approximately $4.3 million, pay more than $1 million in prejudgment interest, and pay a civil monetary penalty of $4.5 million. In reaching the settlement, the SEC considered certain remedial actions taken by John Deere, including the termination of the employees that engaged in the alleged misconduct, improvements made to the company’s internal audit and compliance programs, revisions to the company’s anti-bribery and corruption travel policies, and increased training on anti-bribery issues. The settlement amount also reflects John Deere’s cooperation with SEC staff, including (i) providing information obtained during John Deere’s internal investigation and translations of relevant documents, and (ii) making current and former employees available for interviews, including witnesses located overseas.