Source:  Tom Johnston, MEATINGPLACE.COM, 2/10/11

Tyson Foods said today it has paid $5.2 million to the federal government to resolve claims resulting from improper payments made by the company's Mexican poultry subsidiary.

Tyson de Mexico had made improper payments exceeding $100,000 to two Mexican government veterinarians, directly and through their spouses, as Tyson Foods voluntarily reported in early 2007. The veterinarians were responsible for certifying chicken products for export under a voluntary government inspection program.

The payments began years ago, before Tyson acquired an interest in the company now called Tyson de Mexico. Back then, and several years following the acquisition, Mexican law allowed 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, the payments from Tyson de Mexico should have ceased when the two became “official” government veterinarians and began receiving their full salary from the Mexican government.
Tyson officials investigated and stopped the improper payments in late 2006, and reported their findings to the U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC). Company officials cooperated with investigations by both agencies.

Penalty
The investigations prompted claims of violations of the Foreign Corrupt Practices Act (FCPA). The claims have now been resolved, with Tyson having signed 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. The company said it also has enhanced its compliance program 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.

"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," said David Van Bebber, executive vice president and general counsel for Tyson Foods, in a news release. "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 Mexico during the time period involved were shipped to the United States, nor were there any issues with the safety of the products, Tyson said.

Tyson de Mexico, based in Gomez Palacio in north central Mexico, includes three poultry processing plants. It produces protein-based and prepared foods that comprise about 1 percent of Tyson Foods' total net sales.

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