ADM to pay $54M over U.S. bribery charges

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Archer Daniels Midland, one of the world’s largest agricultural trading houses, agreed to pay more than US$54 million to resolve U.S. criminal and civil charges that it paid bribes to Ukrainian officials for tax benefits, a U.S. Justice Department official said Friday.

The company’s Ukrainian unit, Alfred C. Toepfer International Ukraine Ltd., also pleaded guilty to conspiring to violate the Foreign Corrupt Practices Act, a U.S. law against bribing foreign government officials.

“ADM’s subsidiaries sought to gain a tax benefit by bribing government officials, and then attempted to deliberately conceal their conduct by funnelling payments through local vendors,” Mythili Raman, acting head of the U.S. Department of Justice’s criminal division, said in a statement.

“Paying bribes to reap business benefits corrupts markets and undermines the rule of law,” she added.

According to the U.S. Securities and Exchange Commission, which also settled with ADM, the company failed to prevent some US$21 million in bribes between 2002 to 2008 that had been paid to secure the release of tax refunds.

The bribes amounted to 18 to 20 per cent of the refunds, and were paid through inflated commodities contracts with a Ukrainian shipping company that then passed on the payments to the tax officials, the agency said.

ADM also entered into a non-prosecution agreement with the Justice Department, and agreed to improve its compliance programs and internal controls. The company had previously set aside sufficient funds for a settlement.

Patricia Woertz, ADM’s CEO, said the Illinois-based company learned of questionable activity in 2008, and disclosed the matter to authorities in early 2009 following an internal probe. She said an unspecified number of employees had been fired or otherwise disciplined.

“The conduct that led to this settlement was regrettable, but I believe we handled our response in the right way,” she said in a statement. — Reuters