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 civil investigations.

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 related violations.

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 SEC said.

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. Attorney General.

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.

© Copyright 2005 Reuters Ltd

###