FOR IMMEDIATE RELEASE|
THURSDAY, JANUARY 6, 2005
TDD (202) 514-1888
MONSANTO COMPANY CHARGED WITH BRIBING INDONESIAN
GOVERNMENT OFFICIAL: PROSECUTION DEFERRED FOR THREE YEARS
Company Agrees To Cooperate With Investigation, Retain Independent Compliance Expert,
Pay $1 Million Penalty
WASHINGTON, D.C. - Assistant Attorney General Christopher A. Wray of the Criminal Division announced today that Monsanto Company has been charged with violating the Foreign Corrupt Practices Act (FCPA) in connection with an illegal payment of $50,000 to a senior Indonesian Ministry of Environment official, and the false certification of the bribe as “consultant fees” in the company’s books and records.
A criminal information filed today in the District of Columbia charges Monsanto, a St. Louis, Missouri-based public company and global producer of technology-based solutions and agricultural products, with violating the anti-bribery and false books and records provisions of the Foreign Corrupt Practices Act, Title 15, U.S.C. §§ 78dd-1(a) and (g) and 78m(b). Monsanto has agreed to accept responsibility for the conduct of its employees in paying the bribe and making the false books and records entries, adopt internal compliance measures and cooperate with ongoing criminal and SEC civil investigations. An independent compliance expert will be chosen to audit the company’s compliance program and monitor its implementation of and compliance with new internal policies and procedures. Monsanto has also agreed to pay a monetary penalty of $1 million.
Based on Monsanto’s acceptance of those conditions and others, the Department of Justice has agreed to defer prosecution on the criminal information for three years. The Department of Justice has agreed to dismiss the criminal information after three years if Monsanto fully complies with the terms of the deferred prosecution agreement.
According to the filed information and the agreed statement of facts, the agricultural products marketed by Monsanto include various genetically-modified crops, including cotton. Monsanto hired an Indonesian consulting company to assist it in obtaining various Indonesian governmental approvals and licenses necessary to sell its products in Indonesia. At the time, the Indonesian government required an environmental impact study before authorizing the cultivation of genetically modified crops. After a change in governments in Indonesia, Monsanto sought, unsuccessfully, to have the new government, in which the senior environment official had a post, amend or repeal the requirement for the environmental impact statement.
Having failed to obtain the senior environment official’s agreement to amend or repeal this requirement, in 2002 a Monsanto employee responsible for certain activities in the Asia-Pacific Region authorized and directed the Indonesian consulting firm to make an illegal payment totaling $50,000 to the senior environment official to “incentivize” him to agree to do so. The Monsanto employee also directed representatives of the Indonesian consulting company to submit false invoices to Monsanto for “consultant fees” to obtain reimbursement for the bribe, and agreed to pay the consulting company for taxes that company would owe by reporting income from the “consultant fees.”
In February 2002, an employee of the Indonesian consulting company delivered $50,000 in cash to the senior environment official, explaining that Monsanto wanted to do something for him in exchange for repealing the environmental impact study requirement. The senior environment official promised that he would do so at an appropriate time. In March 2002, Monsanto, through its Indonesian subsidiary, paid the false invoices thus reimbursing the consulting company for the $50,000 bribe, as well as the tax it owed on that income. A false entry for these “consulting services” was included in Monsanto’s books and records.
The senior environment official never authorized the repeal of the environmental impact study requirement.
“Companies cannot bribe their way into favorable treatment by foreign officials,” said Assistant Attorney General Wray. “Today’s agreement, which requires Monsanto’s full cooperation, acceptance of responsibility, and significant compliance and monitoring steps, will help ensure that such dishonest and illegal activity does not occur in the future.”
Monsanto has also settled related civil enforcement proceedings by the Securities and Exchange Commission. Today, the Commission filed a federal court complaint charging Monsanto with violating the FCPA and issued an administrative order finding that Monsanto violated the anti-bribery, books and records, and internal controls provisions of the FCPA. Monsanto consented to the entry of a final judgment in the federal lawsuit requiring it to pay a $500,000 civil penalty and consented to the Commission’s issuance of its administrative order.
The criminal case is being handled by Acting Deputy Chief Mark F. Mendelsohn of the Fraud Section. The investigation was assisted by the SEC.