Deere agrees to pay $10 million to settle SEC bribery charges

Securities and Exchange Commission said Deere & Company will pay nearly $10 million to settle an SEC investigation into a bribery scheme carried out by one of its subsidiaries.

The SEC found that Wirtgen Thailand, a wholly owned subsidiary of Deere & Company, paid bribes between 2017 and 2020 to Thai government officials from the Royal Thai Air Force, the Department of Highways, and the Department of Rural Roads. Wirtgen Thailand is a construction equipment supplier based in the country’s Bang Sao Thong District.

These bribes are believed to have helped the company win several government contracts. Wirtgen Thailand also bribed employees of a private company to secure sales. The bribes included cash, visits to massage parlors, and international trips. As a result, Wirtgen Thailand made about $4.3 million in profits, which were falsely recorded in John Deere’s books as legitimate expenses.

The SEC pointed out that after Deere acquired Wirtgen Thailand in 2017, the company failed to properly integrate the subsidiary into its compliance system. This oversight allowed the bribery to continue for several years. Charles E. Cain, head of the SEC’s FCPA Enforcement Unit, stressed that companies must quickly ensure newly acquired subsidiaries have proper internal controls in place. FCPA stands for the Foreign Corrupt Practices Act.

Without admitting or denying the SEC’s findings, Deere agreed to cease any further violations and pay $5.4 million in profits and interest, as well as a $4.5 million fine.

“These allegations represent a clear violation of our company policies and ethical standards,” John Deere told the Quad Cities Regional Business Journal. “Furthermore, they are in direct conflict with our core values — particularly our commitment to integrity — and we strongly condemn such practices. The individuals involved in this matter are no longer with the company.”

This scandal comes at a time when Deere is grappling with significant business hurdles. The company — based in Moline, Illinois, and known for its iconic John Deere tractor and construction machinery brand — cited declining consumer demand when it laid off hundreds of workers last month.  In 2021, the company faced a highly publicized strike involving over 10,000 workers, who demanded better wages and benefits. Criticism has been lobbied Deere’s way in recent months over its plans to move some production to Mexico as well as its role in social justice issues such as diversity and inclusion.

A full summary of the SEC case can be found here.