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FCA's Scandal Down Under: Former Australian CEO Accused of Corruption

Motor Trend logo Motor Trend 6/7/2015 Angus MacKenzie

The former CEO of Fiat Chrysler Automobile’s Australian operation has been accused of misappropriating more than A$30 million (about $23.3 million in the U.S.) in company funds. A 51-page document filed on May 11 by FCA Australia with the Australian Federal Court alleges Clyde Campbell spent company money on personal items, gifts, travel, entertainment, and “uncommercial and detrimental” business contracts that benefited friends and associates.


Among those named in the suit is former Mercedes-Benz USA CEO Ernst Lieb, who was abruptly dismissed in 2011. A report in Germany’s Der Spiegel magazine in December of that year said Lieb had been fired for charging an $89,000 home theater, a $22,000 home gym, a washing machine, a dryer, a bed, a built-in barbecue system, his membership in a country club, and more to his company expense account.

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According to the FCA document, Lieb, who in 2012 lost his wrongful dismissal suit, is a director of a company that owns Motorworld Australia, which in turn owns three Chrysler dealerships in Melbourne, Australia. FCA alleges Campbell authorized the payment of A$1.2 million toward the purchase of real estate for two of the three Motorworld Australia dealerships. In its filing, FCA claims it is not its usual practice to contribute to the purchase of properties for dealerships.

Campbell also authorized a payment of almost A$2.5 million to Motorworld Australia for marketing assistance. FCA says it paid an average of A$220,000 for marketing assistance to each of 11 new Chrysler dealers between 2011 and 2013. “The Motorworld Australia payments were uncommercial and detrimental to the interests of [FCA],” the company claims in the court filing.

The FCA document also notes that between 2003 and 2006, Campbell was a general manager at Mercedes-Benz Australia under the leadership of Lieb, who was CEO and president. Lieb was promoted to CEO of Mercedes-Benz’s critically lucrative U.S. operation in September 2006 and was widely admired by U.S. dealers as an effective leader of the business.

What about the rest of the money FCA claims Clyde Campbell misappropriated?

FCA alleges that in December 2010, Campbell awarded a contract to British company Motortrak to provide Web services for Australia’s Chrysler dealers at a cost of A$690 per dealer per month. Campbell then subsequently twice agreed to vary the contract, extending its term and increasing the monthly per dealer fee to A$1,695 and then A$4,100. FCA says the annual cost of the contract went from A$488,250 to A$9,169,250, compounded by the increase in dealers from 59 to 184.

FCA claims it has paid A$20,152,399 to Motortrak since 2011. The suit notes that Clyde Campbell was the managing director of Motortrak from January 2008 to September 2010, and that his wife, Simone, was a director of Motortrak from May 2009 to October 2010.

Other allegations made by FCA in the court filing include:

  • Campbell authorized a contract with a company called Digital Dialogue Media for corporate website services for a three-year term at a cost of A$6.6 million even though FCA Australia marketing director Sam Tabart had a personal interest in the company.
  • Campbell signed a A$5 million, three-year contract for the exclusive use of a luxury resort outside Melbourne for 240 days a year, noting that he and his wife had an interest in a nearby property.
  • A$400,000 of more than A$550,000 paid to a company called My Alfa Romeo, of which Campbell’s wife was a director and shareholder, for a “mobile outdoor floating billboard” was used toward the purchase of a 40-foot Chris-Craft yacht.
  • Campbell used A$244,800 to pay for membership for himself and his wife to the tony Victorian Racing Club; FCA spending on gift cards increased from A$0 in 2011 to $380,012 in 2012; travel expenses incurred “without business justification and/or the necessary approval” increased excessively; and Jeep vehicles and fully paid fuel cards were provided to celebrities, sports stars, and business associates.

Subsequent reports in Australian media outlets have revealed a culture of lavish spending at FCA’s Australian operation under Campbell and his successor, Veronica Johns. The company splurged A$1 million on staff Christmas parties in a luxury Melbourne hotel. Johns, who unexpectedly resigned in 2014, citing “personal reasons,” is said to have expensed A$11,000 for one stay at the hotel, including numerous spa treatments, even though she lived in Melbourne. She also reportedly gifted Louis Vuitton handbags, at company expense, to a number of staff members.

FCA spent $800,000 to enter a team of Fiat Abarths in the Bathurst 12 Hour race. Campbell and Johns’ husband, Gregory Hede, competed in the race.

“The spending was out of control,” says a former FCA staff member, quoted in Melbourne’s The Age newspaper. “And anyone who questioned it was shown the door.”

Campbell’s lawyer, Sam Bond, has told the Australian media “the allegations in the statement of claim are not only completely denied but considered scandalous."

"We are confident that, in due course, the allegations will be shown to be wrong and will be embarrassing for FCA,” Bond said. He said internal politics has caused FCA to want to tarnish Campbell’s name. Characterizing Campbell as an executive “who took the business to enormous levels of growth,” he said the case was “as unfortunate as it was unfair.”

Meanwhile, FCA Australia has confirmed the court action follows what it calls a routine audit by the members of the company's international finance team. “During a routine audit, we discovered what at best appears to be incomplete documentation pertaining to certain transactions and vendor relationships initiated or approved by Mr. Campbell during his tenure as CEO of FCA Australia,” said the company in a statement quoted by

The FCA Australia revelations perhaps point to an unexpected and troubling legacy from the DaimlerChrysler era that stems from an unlikely clash of U.S. and European business cultures.

When DaimlerChrysler was listed on the New York Stock Exchange in 1998, the German arm of the company came for the first time under the scrutiny of the Securities and Exchange Commission and its ultra-strict anti-corruption rules. In April 2010 the SEC fined Daimler $185 million after investigating what it believed were corrupt payments in 22 countries. As part of the settlement — which included a suspension of the investigation — Daimler was forced to agree to external monitoring to ensure employees did not engage in corrupt practices.

Under the SEC’s regime, lavish expense account spending by senior Daimler managers — long tolerated in Stuttgart — was no longer acceptable. And Ernst Lieb was not the only high-profile casualty of this shift in policy.

In its December 2011 story, Der Spiegel reported that Wolfgang Schrempp, former head of DaimlerChrysler’s Australian and Pacific operations and brother of former CEO Jürgen Schrempp, quietly retired after it was revealed he’d spent 274,000 euros renovating the company home. He had also billed DaimlerChrylser 86,000 euros a year for garden and pool maintenance, and claimed a 5,800-euro rent allowance even though he was living in a company-owned house.


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