Honda Expects to Be Cleared in Kickback Case

07/24/96

Lawsuits that approximately 50 Honda dealers from around the country filed against Honda Motors have been consolidated in a U.S. District Court in Baltimore. The civil suits against Honda charge that the company allowed a multi-year scheme of bribery and kickbacks to exist between certain dealers and former company executives.

The civil suits have their origin in a 1994 federal criminal case in New Hampshire. Federal authorities said that certain Honda dealers spent $15 million in gifts and payoffs to former Honda executives in the 1980s and 1990s. The dealers' kickbacks bought preferential treatment from executives in charge of distributing new vehicles. 22 individuals were indicted in the New Hampshire case on charges that ranged from racketeering and conspiracy to obstruction of justice. Most of those have been sentenced.

Honda expects to be exonerated in the case. The company denies the dealers' charges, claiming that the executives involved in the scheme concealed their activities from senior Honda executives. In a statement the company said, "American Honda has complete faith that at the conclusion of this unfortunate litigation the company will again, as in New Hampshire, be found to have been victimized and defrauded by this group of unscrupulous former employees and Honda dealers."

Paul Dever -- The Auto Channel