Contact: John Harrington – 707.252.6166
FOR IMMEDIATE RELEASE
November 8, 2005
Napa, California
SEC Allows Monsanto to Keep Bribery Resolution Off Shareholder Ballot
The Securities and Exchange Commission (SEC) has informed Harrington Investments, Inc. (HII) that it agrees with Monsanto Company that an HII-sponsored shareholder resolution requesting the Board of Directors to establish an oversight committee of independent directors to insure compliance with the Monsanto Code of Conduct, the Monsanto Pledge, and all federal, state and local government laws, including the Foreign Corrupt Practices Act, can be excluded from the proxy material to shareholders.
"Monsanto admitted that the company bribed Indonesian government officials, violating federal law and the company code of conduct," said John Harrington, President and CEO of HII. "Obviously, the SEC, in allowing the company to keep this issue from being voted on by the owners of the company, sided with Monsanto which argued that the question of ethical corporate behavior is too complex for shareholders to discuss and make an informed judgment. This is simply another example of a federal regulatory agency being controlled by the very corporation that they are supposed to oversee."
Harrington continued, "Shareholders can't nominate Monsanto directors and can't vote against corporate self-nominated directors. Corporate directors can be elected by one "yes" vote. Moreover, this shareholder resolution that the SEC is allowing Monsanto to keep off the ballot is advisory only. Even if the shareholders voted to support independent director oversight, it would not require the company to comply. Stalin would love this system."
Harrington concluded by saying, "Clearly, the SEC leadership under Christopher Cox, who was on the corporate dole while in Congress, cannot be relied upon to protect the interest of shareholders, the legal owners of publicly-traded corporations."
In January 2005, Monsanto was fined $1 million by the U.S. Department of Justice for paying an Indonesian official $50,000 to repeal a requirement for the submission of an environmental impact study before the company could cultivate genetically modified cotton crops in the country. This bribe was a direct violation of the Foreign Corrupt Practices Act.
Monsanto was also fined $500,000 by the Securities and Exchange Commission (SEC) for the $50,000 bribe and related violations which included more than $700,000 of illegal or questionable payments made to at least 140 current or former Indonesian government officials and their family members from 1997 to 2002.
A Monsanto manager based in the U.S. instructed a consulting firm in Indonesia to submit false invoices to conceal the $50,000 bribe. According to the SEC complaint, "Despite obvious irregularities in the invoices, the Senior Monsanto Manager approved the false invoices and convinced other Monsanto managers to approve the false invoices for payment." The other improper payments were concealed by Monsanto's Indonesian affiliates using false registration fees and inflated sales of pesticide products.
According to the SEC complaint, the repeated violations of Monsanto's accounting policies, controls and procedures by its Indonesian subsidiary were undetected due to inadequate internal controls. From 1996 to 2001, Monsanto failed to conduct audits of its Indonesian subsidiary as required by Indonesian law. When Monsanto did conduct an internal investigation in 2001, uncovering the illicit payments and disclosing them to the SEC, it did not uncover the $50,000 bribe.
Last year, the Harrington advisory firm filed a shareholder resolution with Monsanto requesting information from the company on the export of dangerous and carcinogenic chemicals to developed and developing countries, receiving over 13% of the shareholder vote in 2004 and the prior two years.
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