On March 6, the U.S. Securities and Exchange Commission (SEC) filed a civil complaint in the U.S. District Court in Washington, D.C. that alleges, in 2002, Charles M. Martin, then Monsanto Company’s government affairs director for Asia, authorized an Indonesian consulting firm to pay a bribe totaling $50,000 to a senior Indonesian Ministry of Environment official.

The payment, the filing continues, “was made to influence the senior environment official to repeal language in a decree that was unfavorable to Monsanto’s business in Indonesia.”

Later the SEC explains that the “unfavorable” decree was a mid-2001 government ruling that required “bio-technology products such as Monsanto’s Bollgard Cotton,  for the first time, to undergo an AMDAL process (an environmental impact assessment) before they could be cultivated in Indonesia.”

That assessment, the SEC continues, “posed a considerable obstacle to the success of Monsanto’s existing  Bollgard Cotton project and Monsanto’s ability to successfully market other GMOs in Indonesia and elsewhere in the Asia Pacific region.”

Especially so, notes the SEC, because in February 2001, Monsanto obtained limited approval from Indonesia’s Ministry of Agriculture allowing farmers in South Sulawesi, Indonesia to grow Bollgard Cotton.

Shortly thereafter, however, a change in government brought a change in rules.

The $50,000 payment wasn’t the only money Monsanto spent on Indonesian officials.

As the Martin complaint explains in a paragraph labeled “Other Relevant Entities,” the SEC already had moved against the St. Louis biotech company in early 2005 “for violating the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA).”

On Jan. 6, 2005, the SEC filed two settled enforcement proceedings against Monsanto whereby the company – “without  admitting or denying the Commission’s charges” – consented to pay “a $500,000 civil penalty” as “a final judgment in (a) federal lawsuit.”

The suit, brought by the SEC, “charged that, from 1997 to 2002, Monsanto inaccurately recorded or failed to record, in its books and records approximately $700,000 of illegal or questionable payments made to at least 140 current and former Indonesian government officials and their family members.”

And, the settlement agreement adds, “The approximate $700,000 was derived from a bogus product registration scheme undertaken by two Indonesian entities owned or controlled by Monsanto.”

But since the SEC “considered the cooperation that Monsanto provided the Commission staff during its investigation” important to connect the Indonesian dots, the U.S. Justice Department “entered into an agreement... to defer prosecution on charges of violating the anti-bribery and books and records provision of the FCPA.”

The deal meant that if Monsanto paid a $1 million penalty and retained for a period of three years an independent compliance expert to ensure such violations would not occur again, the big biotech company would face no other charges.

Russell Mokhiber, editor of the Corporate Crime Reporter, an authoritative weekly newsletter on white collar crime, describes deferred prosecution deals like the one Monsanto agreed to as “criminal activity without any criminals.”

“You can commit any crime you wish, from bribery to corruption to fraud. Just help us put the individuals in jail, and we will let you off the hook. No conviction. No record of criminal wrongdoing,”

Mokhiber explains in a lengthy 2005 treatise on the rising use of deferred prosecutions. Under the 2005 deal Monsanto cut with Justice, its three-year compliance period will end just after it hopes to conclude its $1.5 billion buyout of Delta & Pine Land Co., a purchase that will give it a virtual lock on the U.S. biotech cottonseed market.

The buyout is getting an antitrust review at the same U.S. Justice Department that granted Monsanto the deferred prosecution in the Indonesian cotton scheme.

The views and opinons expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Gary Truitt may write to him in care of this publication.

This farm news was published in the March 28, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.