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The Daimler Scandal That Will Shake The Mercedes-Benz Group AG To Its Core

Mercedes-Benz Group AG (Previously Named Daimler) Corporate Fiasco & Their Implications

The Daimler Scandal That Will Shake The Mercedes-Benz Group AG To Its Core

NEW YORK ( — The subject of whistleblowers has gained attention in the media and on Capitol Hill again. In terms of institutional arrangements, the whistleblower benefits from the unique system of the government in the United States. It is no surprise that, regardless of what political party controls Congress, whistleblower protection legislation is always unanimously passed. According to sources in the U.S. Department of Justice, and whistleblower complaints* to the U.S. Securities and Exchange Commission, along with a few other governmental bodies that oversee the car industry in the United States, the world needs to look at the Mercedes-Benz Group AG (previously named Daimler) from many different perspectives and analyze their actions and the ethical issues surrounding it. It is an ethical failure at so many levels. The complaint against Daimler filed at SEC will send shock waves throughout the industry and the economy. The basic foundation of our democracy is the First Amendment guarantee of freedom of expression. The Daimler scandal will cause U.S. citizenry to be even more on high alert when it comes to the case of Mercedes-Benz Group AG and the company’s aura of arrogance. Its managerial class claimed to serve everyone—that under their leadership the company had become a good servant to its customers, and a good investment for its shareholders. But that was all lip service. In the end, Mercedes-Benz Group AG appeared to have achieved its well-publicized goal as the Swiss bank Credit Suisse left Mercedes-Benz on “Outperform”. The most common use of outperform is for a rating that is above a neutral or a hold rating and below a strong buy rating. Outperform means that the company will produce a better rate of return than similar companies, but the stock may not be the best performer in the index. Daimler announced last year that it would change its name to Mercedes-Benz, and that change took effect on February 1 of this year. One wise man once said, “All that is necessary for evil to triumph is for good men to do nothing.” As in most complicated dramas, it is difficult to understand the plot without knowing the characters. This Rich TVX News Network bulletin reviews the key players in the Mercedes-Benz Group AG (Previously Daimler) debacle. They have been divided into two players: the Mercedes-Benz Group AG (Previously Daimler), and Daimler Truck Holding AG.

The U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission

In This Scandal Powerful Men Play Starring Role

In recent years, whistleblowers have been popularized in the news reports regarding people trying to expose corrupt practices. Whatever you may think of the media’s coverage of Mercedes-Benz Group AG (Previously Daimler) or their managerial class generally—well, toss it out the window when it comes to their dealings with Russia. As we already reported, the famous US University Yale compiled a list of companies still doing business in Russia. Those are now listed in “The List of Shame” as titled by its authors Yale University business professor Jeffrey Sonnenfeld, his colleague Steven Tian, and the Yale research team. The following description is based on information gathered from the Yale School of Management website. According to Yale´s List of Shame, Mercedes-Benz Group AG (Previously Daimler), a German automotive company, said it would “suspend all shipments to Russia,” and Daimler Truck AG “freeze activities in Russia”. Well, war in Ukraine has been raging for over 5 months now. Mercedes-Benz Group still holds a stake of 35% in Daimler Truck Holding AG. Veto is understood as the right to reject, refuse to pass a majority resolution. What does the managerial class of Mercedes-Benz Group AG want to say? That this caste has never heard anything about Veto right? However, very little information has been reported about the role of specific personnel at Mercedes-Benz Group AG (Previously Daimler) who was responsible for Russia. We’ll be delving into that sorry bit of nonsense in the coming bulletins. The procedure for submitting original information to the U.S. Securities and Exchange Commission was quite clear and was accomplished through the SEC’s web-based interactive database for the submission of tips, complaints, and referrals; by completing Form TCR and mailing the form to SEC headquarters in Washington, D.C. Specifically, the whistleblower filed and certified a six-page Form TCR, 7-page Summary Page, 17-page «TCR Section D-8: Facts Pertaining to Alleged Violation», and many other documents which addressed information about the whistleblower and his counsel; information about the Daimler entity that was the subject of the complaint; details about the complaint included its nature and date of occurrence. The documents which included statements and the proof of claim(s), surprised us very much, to say the least. «Bribery of, or improper payments to, foreign officials (Foreign Corrupt Practices Act Violations)». Well, we never expected anything like that to come from the Mercedes-Benz Group AG (previously named Daimler), and words like «The Russian Bribery» really have a very bitter aftertaste, especially when you consider that there is a war in Ukraine going on. According to the documents, the submission spans a long history of litigation in Asia, dating back nearly three decades and still ongoing. There has been a lot of speculation about how much Ola Källenius, Chairman of the Board of Management of Mercedes-Benz Group, and head of Mercedes-Benz, and Bernd Pischetsrieder, Chairman of the Supervisory Board knew about what was going on. Is the new chief visionary and head cheerleader Ola Källenius a brilliant strategist but surrounds himself with “yes men”? Ola Källenius brought many of the policies he learned at Mercedes-AMG GmbH, commonly known as AMG, the high-performance subsidiary of Mercedes-Benz AG, with him and was applauded by the German press for the quality management system. Mercedes-Benz Group was immediately compared to erstwhile German darling Wirecard: another Potemkin corporation for the New Gilded German Age. With one difference, the scandals in the German economy do not end.

Yale´s List of Shame
Yale´s List of Shame

What About Bernd Pischetsrieder?

In a surprising move, Bernd Pischetsrieder, the former CEO of BMW from 1993-1999, was appointed the Chairman of Supervisory Board of Daimler AG. In 2008, Bernd Pischetsrieder was one of several former Volkswagen managers who testified before court in a corruption case at the company involving charges of bribery, illicit sex and company-paid shopping sprees. At the time he said that he had first learned of the corrupt practices in June 2005 and subsequently dismissed the employees involved. Well, it is difficult not to be fascinated by the disclosures surrounding the Mercedes-Benz Group AG (Previously Daimler) debacle. Based on the information released to this point, Daimler’s questionable corporate practices were front-page news and so were reports of public disillusionment and skepticism about corporate behavior. We know that in its 2008 Annual Financial Report, Daimler already admitted it was being investigated by the SEC and the DOJ regarding violations of law, including violations of the FCPA. (Daimler 2008 Annual Report, at p. 193, available at available at, where it is clearly written: «As previously reported, the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”) are conducting an investigation into possible violations of law by Daimler including the anti-bribery, record-keeping and internal control provisions of the U.S. Foreign Corrupt Practices Act (“FCPA”)». Daimler further admitted in the same document that “Daimler has completed its internal investigation and has determined that in a number of jurisdictions, primarily in Africa, Asia and Eastern Europe, improper payments were made which raise concerns under the FCPA, under German law, and under the laws of other jurisdictions.”  Daimler made the same statements in its 2009 Annual Report. (Daimler2009 Annual Report at 226, available at As a result of this FCPA investigation, Daimler, and separately certain subsidiaries, agreed to the filing of a criminal information charge charging Daimler with one count of conspiracy to violate the books and records provisions of the FCPA and one count of violating those provisions. It further entered into a deferred prosecution agreement (“DPA”), dated March 24, 2010, and it and its subsidiaries agreed to pay $93.6 million in criminal fines and penalties. Ethical scandals of the Mercedes-Benz Group AG (Previously Daimler) can disrupt routine operations, stifle productivity, destroy reputations, erode stakeholder confidence, and have the potential to result in untold financial and legal costs, but every ethical scandal of Mercedes-Benz Group AG (Previously Daimler) has also casualties behind the news headlines—lost jobs, vanished pensions, disrupted families and communities, poor health, stress and ultimately a growing mistrust of corporate Germany.

Mercedes-Benz Group AG Managerial Class
Mercedes-Benz Group AG Managerial Class

Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act of 1977 (FCPA) (15 U.S.C. § 78dd-1, et seq.) is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests.[1]

The FCPA is applicable worldwide and extends specifically to publicly traded companies and their personnel, including officers, directors, employees, shareholders, and agents. Following amendments made in 1998, the Act also applies to foreign firms and persons who, either directly or through intermediaries, help facilitate or carry out corrupt payments in U.S. territory.[2]

Pursuant to its anti-bribery purpose, the FCPA amends the Securities Exchange Act of 1934 to require all companies with securities listed in the U.S. to meet certain accounting provisions, such as ensuring accurate and transparent financial records and maintaining internal accounting controls.[3]

The FCPA is jointly enforced by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), which apply criminal and civil penalties, respectively.[4]

Since its passage, the FCPA has been subject to controversy and criticism,[5] namely whether its enforcement discourages U.S. companies from investing abroad.[6] The Act was subsequently amended in 1988 to raise the standard of proof for a finding of bribery.[4]

The Daimler Scandal
The Daimler Scandal

Mercedes-Benz Group

The Mercedes-Benz Group AG (previously named Daimler-Benz, DaimlerChrysler and Daimler) is a German multinational automotive corporation headquartered in Stuttgart, Baden-Württemberg, Germany. It is one of the world’s leading car manufacturers. Daimler-Benz was formed with the merger of Benz & Cie. and Daimler Motoren Gesellschaft in 1926. The company was renamed DaimlerChrysler upon acquiring the American automobile manufacturer Chrysler Corporation in 1998, and was again renamed Daimler AG upon divestment of Chrysler in 2007. In 2021, Daimler AG was the second-largest German automaker and the sixth-largest worldwide by production. In February 2022, the company was renamed to its current name.

The Mercedes-Benz Group’s marques are Mercedes-Benz for cars and vans (including Mercedes-AMG and Mercedes-Maybach) and Smart. It has shares in other vehicle manufactures such as Daimler Truck (founded as a wholly owned subsidiary of the group), Denza, BAIC Motor and Aston Martin.

By unit sales, the Mercedes-Benz Group is the thirteenth-largest car manufacturer. The group provides financial services through its Mercedes-Benz Mobility arm. The company is a component of the Euro Stoxx 50 stock market index.[4] In the Mercedes-Benz complex in Stuttgart are situated the central company headquarters, the Mercedes-Benz offices, a car assembly plant, the Mercedes-Benz Museum and the Mercedes-Benz Arena.


Mercedes-Benz (German pronunciation: [mɛɐ̯ˈtseːdəsˌbɛnts, -dɛs-] (listen)),[6][7] commonly referred to as Mercedes and sometimes as Benz, is a German luxury and commercial vehicle automotive brand established in 1926. Mercedes-Benz AG (a Mercedes-Benz Group subsidiary established in 2019) is headquartered in Stuttgart, Baden-Württemberg, Germany.[1] Mercedes-Benz AG produces consumer luxury vehicles and commercial vehicles badged as Mercedes-Benz. From November 2019 onwards, Mercedes-Benz-badged heavy commercial vehicles (trucks and buses) are managed by Daimler Truck, a former part of the Mercedes-Benz Group turned into an independent company in late 2021. In 2018, Mercedes-Benz was the largest brand of premium vehicles in the world, having sold 2.31 million passenger cars.[8]

The brand’s origins lie in Daimler-Motoren-Gesellschaft‘s 1901 Mercedes and Karl Benz‘s 1886 Benz Patent-Motorwagen, which is widely regarded as the first internal combustion engine in a self-propelled automobile. The slogan for the brand is “the best or nothing”.[9]

* Disclaimer: The views expressed in the whistleblower documents are those of the author(s) and do not necessarily represent the views of the Rich TVX News Network, or its management. All the charges are accusations of the whistleblower, according to the SEC Complaint documents, and all defendants are presumed innocent until and unless proven guilty.