Bribery just a Tax-Deductible Business Expense

I know I did mention this before. But I dint realise the whole
extent of this thing... Now it's not just Siemens AG, but apparently
Daimler AG (maker of Mercedes-Benz) did it too.

Maybe you can't blame these German companies cause apparently
bribes could be deducted as a business expense under the German
tax-code before 1999. In any case, it's not like the Chinese people
don't do such things: One case of a Chinese steel-mill bribing the people
at Rio Tinto for an iron - ore contract was reported in the BT on Thurs.

Article on Daimler AG (Guardian UK, 24th March 2010)
"The German motor manufacturer Daimler is set to pay $185m
(£124m) to settle a lurid series of international bribery charges
levelled by US prosecutors.

A 76-page indictment filed by the US department of justice accuses
Daimler of bribing foreign officials using secret bank accounts,
fictitious invoices, phoney price "surcharges" and disbursements
from a "cash desk" at a factory in Stuttgart.

In Indonesia, a local Daimler affiliate is accused of spending
$41,000 on gifts for officials at a state-owned bus company,
Perum Damri. And in notoriously repressive Turkmenistan, the
German company reportedly handed an armoured Mercedes worth
€300,000 to a "high level" government official as a birthday gift

The alleged bribes were often listed in Daimler's accounts under the
German term "nützliche Aufwendungen" meaning "necessary payments"
said the US justice department, which added that the term "was
understood by certain employees to mean official bribe"."


Old Article on Siemens AG from NYT Dec 2008
"Before 1999, bribes were deductible as business expenses under
the German tax code, and paying off a foreign official was not a
criminal offense. In such an environment, Siemens officials subscribed
to a straightforward rule in pursuing business abroad, according to
one former executive. They played by local rules.

Inside Siemens, bribes were referred to as “NA” — a German abbreviation
for the phrase “nützliche Aufwendungen” which means “useful money.”
Siemens bribed wherever executives felt the money was needed, paying
off officials not only in countries known for government corruption, like
Nigeria, but also in countries with reputations for transparency, like Norway,
according to court records."