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Tyson Foods Resolves Claims

by 5m Editor
11 February 2011, at 8:55am

US - Tyson Foods has resolved a matter with the US government involving Tyson's voluntary disclosure of improper payments related to an export programme at the company's Mexican poultry subsidiary.

In early 2007, Tyson Foods voluntarily reported that improper payments of more than $100,000 had been made by Tyson de México to two Mexican government veterinarians, both directly and through their spouses. The veterinarians were responsible for certifying chicken products for export as part of a voluntary government inspection programme.

The payments began years ago, before Tyson acquired an interest in the company that is now called Tyson de México. At the time and for several years after Tyson acquired Tyson de México, Mexican law permitted direct payments to the veterinarians because they were 'approved' government veterinarians who could charge a fee for their services to supplement their government income. However, when the two became 'official' government veterinarians and started receiving their full salary from the Mexican government, the payments from Tyson de México should have been discontinued.

Tyson officials conducted an investigation and promptly stopped the improper payments in late 2006, and reported their findings to the US Department of Justice (DOJ) and US Securities and Exchange Commission (SEC). Company officials cooperated with investigations by both agencies.

The investigations led to claims of violations of the Foreign Corrupt Practices Act (FCPA). The claims have now been resolved, with Tyson signing a deferred prosecution agreement, which includes paying a penalty of $4 million to the DOJ, and a consent agreement with the SEC involving a 'disgorgement' payment, including interest, of $1.2 million. In addition, the company has enhanced its compliance programme designed to prevent and detect violations of the FCPA and has agreed to self-report its compliance efforts to the DOJ and SEC for a two-year period.

David L. Van Bebber, executive vice president and general counsel for Tyson Foods, commented: "We're committed to abiding by the law as well as our company's Core Values, which call on all of our people to operate with integrity. While we're disappointed mistakes were made, corrective action has been taken and the improper payments were discontinued. As our international operations have expanded, we continue to strengthen the compliance efforts of our international businesses including improved training and compliance programs, extensive retraining, and anti-corruption focused audits."

None of the products exported from Tyson de México during the time period involved were shipped to the US, nor were there any issues with the safety of the products.

Tyson de México, based in Gomez Palacio in north central Mexico, includes three poultry processing plants. It produces protein-based and prepared foods that comprise about one per cent of Tyson Foods' total net sales.

To read the press release from the US Department of Justice on this case, click here.