Judges and Toyota I

At the end of March, Law 360 published the story “Toyota Probed Possible Bribes To Top Thai Judges,” written by Frank G. Runyeon. It is a story about Toyota investigating and reporting itself on possible corruption in Thailand.

It took more than six months of internal investigation “before Toyota disclosed concerns to U.S. authorities…” in April 2020.

It found that “its consultants paid off Thai judges and government officials in an effort to overturn a $350 million import tax judgment related to its Prius cars…”. The report states:

… documents obtained exclusively by Law360 and court filings in a related case show the company previously conducted its own investigation led by counsel at WilmerHale. Code-named “Project Jack,” it sought to determine whether Toyota Motor Thailand violated the U.S. Foreign Corrupt Practices Act or the U.K. Bribery Act by making payments to outside law firms or consultants that may have been passed to or shared with Thai judges, court advisers or others in an effort to secure a favorable outcome in the Prius tax case….

Titled “TMC Thailand Inquiry: Background & Protocol for Document Review,” the guidelines were distributed to several teams of reviewers poring over millions of company documents dating back to 2012 with help from more than a dozen attorneys and translators. The protocol appeared to show that Toyota was concerned about possible corrupt payments to current and former Thailand Supreme Court judges, as well as to the country’s top finance and justice officials….

In the Prius matter, Thai customs officials had accused Toyota of shorting the government 11 billion baht, or about $350 million today, in import taxes over a two-year period because the company did not use Thai assembly lines to build Prius cars there and instead imported pre-assembled cars, according to a WilmerHale case summary. A loss for Toyota would make its import tax obligation skyrocket from 10% to 80% of the cars’ value.

Back then, Toyota challenged the tax judgment in the courts. Its investigation was to determine “if and how payments were made,” and also “sought to confirm the amounts and whether any such payments were hidden, made indirectly, diverted to others,” ore were otherwise illegally made.

In particular, a “key question for reviewers was whether the recipients of any such payments had any connection to, influence over, or ex parte contact with sitting Thailand Supreme Court judges who might rule on Toyota’s case.”

We guess the next question is whether this case will go the way of the Rolls Royce corruption when some $18.8 million was alleged to have been paid by Rolls-Royce to “regional intermediaries” and ended up in the pockets of “agents of the State of Thailand and employees of Thai Airways…”.