Toyota informed shareholders earlier this month that it had told the SEC and DOJ last April about "possible anti-bribery violations" related to its Thai subsidiary. (AP Photo/David Zalubowski)
But 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.
The protocol for the internal investigation was laid out in a 22-page document dated Sept. 30, 2019. A copy of the detailed guidance — a type of document routinely produced at the outset of internal corporate investigations — was provided to Law360 by an anonymous source and independently authenticated.
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.
"Documents that would be particularly noteworthy for our review would be any suggesting that Toyota entities attempted to provide payments to any government officials (directly or indirectly) in order to influence the outcome of the Prius case," the protocol advised.
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.
Toyota's internal investigation focused on whether its employees made payments to any of eight Thai law firms or 12 individuals who may have played a role in the Prius litigation as the company was challenging the tax judgment in Thai courts. In addition to understanding if and how payments were made, the probe sought to confirm the amounts and whether any such payments were hidden, made indirectly, diverted to others, or "used or intended to be used for an improper purpose, and in particular, to influence the outcome of the Prius case."
Another 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. WilmerHale also asked its team to flag any evidence that Toyota Motor Corp., the global parent company, knew about any "potentially improper payments to consultants."
The document noted that the investigation was at that point preliminary and could change as new information was uncovered.
A representative for Toyota reiterated Monday that the company is cooperating with the U.S. investigations.
"Toyota works tirelessly to uphold the highest professional and ethical standards in each country where we operate. We take any allegations of wrongdoing seriously and are committed to ensuring that our business practices comply with all applicable government regulations," spokesperson Eric Booth said.
WilmerHale did not immediately respond to a request for comment Monday.
Spokespeople for the DOJ and SEC declined to comment.
--Editing by Aaron Pelc.
For a reprint of this article, please contact reprints@law360.com.