An alleged scheme to bribe clients with massage parlor visits did not end happily for John Deere. On Tuesday, Deere & Company agreed to pay $9.9 million to resolve Security and Exchange Commission charges that it violated the Foreign Corrupt Practices Act.

The FCPA prohibits U.S. companies from paying foreign government officials to assist in obtaining or retaining business. They are also prohibited from making corrupt payments to foreign companies or individuals.

An SEC order determined Deere violated FCPA recordkeeping and internal accounting control provisions. The company consented to an SEC order requiring it to cease and desist from further violations. Deere agreed to pay $5.4 million, the amount it is said to have profited from the bribes plus interest. The company also agreed to pay $4.5 million in civil penalties.

Per settlement terms, Deere did not admit fault or deny the allegations leveled against it.

Sordid details come to light

In 2017, Deere acquired equipment manufacturer Wirtgen Thailand. According to the SEC, the wholly owned subsidiary bribed officials with the Royal Thai Air Force, the Thai Department of Highways and the Thai Department of Rural Roads. This helped the company win multiple government contracts. Wirtgen employees also allegedly bribed employees of a private company to win sales.

According to the SEC, the briberies took place between late 2017 and 2020. They included cash payments, international travel and massage parlor visits.

The SEC alleges those bribes helped Wirtgen Thailan make nearly $4.3 million in profits. Deere officials reportedly concealed the bribes as legitimate expenses.

“After acquiring Wirtgen Thailand in 2017, Deere failed to timely integrate it into its existing compliance and controls environment, resulting in these bribery schemes going unchecked for several years,” Charles E. Cain, Chief of the SEC Enforcement Division’s FCPA Unit, says. “This action is a reminder for corporations to promptly ensure newly acquired subsidiaries have all the necessary internal accounting control processes in place.”

Deere responds to settlement

In a statement following the settlement, Deere & Company officials say they conducted a thorough investigation “upon discovering these issues.” The company adds it fully cooperated with the SEC once the allegations were discovered.

“These allegations represent a clear violation of our company policies and ethical standards,” Deere officials say. “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.”

Deere officials went on to say the company is committed to upholding the highest ethical standards for the traditional John Deere business and its subsidiaries and controlled affiliates.