U.S Company Fined for Bribes Paid by Turkish Subsidiary
Yet another U.S. company has been fined under the Foreign Corrupt Practices Act (FCPA) for payments made by a foreign subsidiary. This time, the Securities and Exchange Commission (SEC) announced yesterday that it has imposed a $300,000 civil penalty on Delta & Pine Land Company (Delta & Pine), a Mississippi-based company engaged in the production and marketing of cottonseed, and its Turkish subsidiary, Turk Deltapine, Inc., for violating the FCPA.
The SEC found that Delta & Pine violated the books-and-records and internal controls provisions of the FCPA and that Turk Deltapine violated the anti-bribery provisions of the FCPA. Specifically, the FCPA charged that, from 2001 through 2006, Turk Deltapine made payments of approximately $43,000 to multiple officials of the Turkish Ministry of Agricultural and Rural Affairs in order to obtain governmental reports and certifications that were necessary for Turk Deltapine to obtain, retain and operate its business in Turkey. According to the SEC, the payments included cash and payment of travel and hotel expenses, air conditioners, computers, office furniture and refrigerators.
In addition, in connection with these improper payments, the SEC found that Delta & Pine failed to keep accurate books and records and failed to have effective internal controls. In addition, the SEC found that Delta & Pine officers in the U.S. learned of these payments in 2004, but did not receive all facts concerning those payments from Turk Deltapine employees. Instead of halting the payments, the payments continued to be made via a company that supplied chemicals to Turk Deltapine.
Turk Deltapine’s payments to MOA officials did not cease until 2006, when the payments came to light in connection with due diligence being performed by a potential acquirer of Delta & Pine. Delta & Pine was subsequently acquired by Monsanto on June 1, 2007.
In its administrative order, the SEC ordered the SEC ordered Deltapine and Turk Deltapine to cease and desist from such violations and required Delta & Pine to retain an independent consultant to review and make recommendations concerning the company's FCPA compliance policies and procedures.