Bad seeds terminated
7 Jan 2005
Monsanto is to pay a fine of $1.5 million for illegally paying $50,000 to bribe a senior Indonesian official at the country's Ministry of the Environment, and then falsely certifying the bribe as 'consultant fees' in the company's books and records.
The company will pay $1 million to the Department of Justice and $500,000 to the Securities and Exchange Commission.
According to a statement from the DOJ, the trouble started when Monsanto hired an Indonesian consulting company to assist it in obtaining various Indonesian governmental approvals 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 Indonesian official had a post, amend or repeal the requirement.
Having failed to obtain the senior environment official's agreement, a former US-based senior Monsanto manager then authorised and directed the Indonesian consulting firm to make an illegal payment totaling $50,000 to the senior environment official to "incentivise" 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 study requirement.
The senior environment official promised that he would do so at an appropriate time. In March 2002, Monsanto's 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.
Despite the payment, the senior environment official, however, never authorized the repeal of the environmental impact study requirement.
"Monsanto accepts full responsibility for these improper activities, and we sincerely regret that people working on behalf of Monsanto engaged in such behaviour," said Monsanto's General Counsel Charles W. Burson.
Since learning of the irregularities, Monsanto has terminated those employees involved with the improper activities, as well as the outside consultant.
