NEW YORK - Monsanto Co. on Thursday said it
agreed to pay $1.5 million in penalties to settle U.S. criminal
and civil charges for bribing an Indonesian government official
and concealing the payment as consulting fees.
The agrochemical company said it accepted full
responsibility for the improper activities and regretted that
people working on behalf of Monsanto engaged in such behavior.
The settlements were reached with the Department of Justice and the Securities and Exchange Commission.
The Justice Department said Monsanto was charged with
violating the Foreign Corrupt Practices Act for making an
illegal payment of $50,000 to a senior official in Indonesia's
Ministry of the Environment in 2002 and falsely certifying the
bribe as "consultant fees" on the company's books and records.
Monsanto agreed to pay a $1 million penalty, adopt internal
compliance measures, and cooperate with continuing criminal and
An "independent compliance expert" will audit and keep
watch on Monsanto's compliance program, the Justice Department
said in a statement.
The St. Louis-based company also agreed to pay a $500,000
civil penalty to settle SEC charges for the $50,000 bribe and
The SEC charges also included at least $700,000 of "illegal
or questionable payments made to at least 140 current or former
Indonesian government officials and their family members," the
Some of the payments were for buying land and building a
house in the name of the wife of a senior Ministry of
Agriculture official, the SEC said.
"Companies cannot bribe their way into favorable treatment
by foreign officials," said Christopher Wray, an assistant U.S.
A former U.S.-based Monsanto senior manager directed an
Indonesian consulting firm to make the $50,000 bribe to a
senior official in the Ministry of the Environment to get him
to repeal a requirement for an environmental impact study the
company needed before it could cultivate genetically modified
crops, the Justice Department said.
The Monsanto manager also ordered the Indonesian
consultants to submit false invoices for "consultant fees" to
get reimbursed for the bribe money. The manager also agreed to
pay the consulting firm's taxes on income from the phony fees,
according to the department.
The cash bribe was delivered to the government official in
February 2002 and Monsanto, through its Indonesian subsidiary,
paid the false invoices the next month and a false entry for
the "consulting services" was included in Monsanto's books and
records, the department said.
The Indonesian official, however, did not authorize repeal
of the environmental study requirement.
Monsanto stock was up 4.7 percent at $53.39 in late trading
on the New York Stock Exchange on Thursday.
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