Tangle of bribes creates trouble for Monsanto (7/3/2007)

On the day a former Monsanto exec - Charles Martin - was fined $30000 for bribery while promoting Monsanto's wares in Indonesia, here's an excellent Wall Street Journal article describing Monsanto's bungled attempt to bribe Indonesia's government into accepting GM.

NB Charles Martin, the Monsanto man at the centre of the bribe's, now heads the U.S. Chamber of Commerce in China, of which Monsanto is a member.

Note also the following statement by Martin, quoted by the WSJ and revealed to investigators by an Indonesian official:

"When the government plays classical music, we play classical music; when it plays jazz, we play jazz; if it plays bribery, we play bribery; but if it plays clean, that is what we like."

Monsanto doled out a total of $700,000 plus in bribes to at least 140 Indonesian officials or their families, for which it has already had to pay $1.5 million in penalties. And when the bribes scandal got underway current Monsanto Chairman Hugh Grant was in charge of Monsanto's Asia Pacific division.

If as he claims - with a shake of the head (see below) - he didn't know about the systematic bribery in Indonesia, then he wasn't doing his job.


Seed Money
In Indonesia, Tangle of Bribes Creates Trouble for Monsanto
Lobbying Effort for Permits Included $50,000 in Cash; The SEC Brings Charges

Wall Street Journal, April 5 2005

JAKARTA, Indonesia -- In early January, U.S. government prosecutors nabbed a big company in an unusual corruption case. Agricultural and biotechnology giant Monsanto Co. agreed to pay $1.5 million to settle charges of bribing Indonesian government officials. In seeking permission to sell genetically modified seed, Monsanto made $750,000 in payoffs to officials during a six-year period, according to a January complaint filed by the U.S. Securities and Exchange Commission.

The filing cited gifts including golf memberships, luxury travel and money to buy land. The links to specific Monsanto executives in many of these cases remain unclear. But investigators focused on one payment that paints a vivid picture of Monsanto's efforts to sway policy: a $50,000 cash gift to Indonesia's Environment Minister.

The SEC complaint refers to those involved only in general terms. According to several people close to the matter, one is a former Monsanto executive and seasoned U.S. diplomat who now heads the American Chamber of Commerce in Beijing. Working on his behalf was an ambitious young American lobbyist with a secret past who became famous when he left his pregnant wife for an Indonesian movie star. The lobbyist worked for a Jakarta-based company founded by Harvey Goldstein, the son of a Brooklyn, N.Y., cop. People who know him say he took the name Mohammed Harvey Goldstein as part of his marriage to a Muslim woman.

The story behind the $50,000 bribe sheds light on the tangled world of Indonesian business and politics. Indonesia has long been known for its venality, a problem compounded by the 1998 fall of President Suharto and the unstable political environment that followed. Authorities there are now making a public show of repairing the nation's reputation and see Monsanto as a test of their resolve. Local investigators have asked the SEC to share its evidence, something the agency has not done, citing the confidentiality of its investigation and the lack of a treaty covering the sharing of information between the two countries.

For Monsanto, based in St. Louis, the case is a black eye. Although prosecutors don't allege that Monsanto's top executives knew about the bribes, they do contend the corruption continued unabated because of the company's lax oversight.

At the time of the settlement, Monsanto's General Counsel Charles W. Burson said in a written statement that the company "accepts full responsibility for these improper activities, and we sincerely regret that people working on behalf of Monsanto engaged in such behavior." He added that the company has "terminated" the employees involved as well as its relationship with the lobbying firm.

In an interview, Monsanto Chief Executive Hugh Grant shook his head when asked if he had any involvement with the Indonesian lobbying firm. He says Monsanto uncovered evidence of the wrongdoing and brought it to the attention of U.S. authorities. "We solved the puzzle...but it should never have happened," he says. "It's not who we are."

At the center of the story is Michael A. Villarreal, who grew up shuttling between U.S. military postings and divorced parents. In 1989 he ran afoul of the law when he was arrested in Panama City, Fla., and charged with armed robbery. He was sentenced to probation and community service tutoring kids at Camp David Gonzalez, a detention center in Calabasas, Calif. "I got a second chance," he says.

Because Mr. Villarreal was a juvenile at the time, his record was expunged from the public record and his plan to enter Pepperdine University went ahead as scheduled. He earned a degree in political science in 1994 and married his college sweetheart the same year.

The newlyweds decided to seek their fortune in Indonesia, the exotic and then-booming Southeast Asian nation where Mr. Villarreal's wife had grown up. Mr. Villarreal, who is now 33 years old, quickly became fluent in Indonesian and rubbed shoulders with ministers and movie stars after he found work as a lobbyist.

At the time, Monsanto was trying to win approval from the Indonesian government to sell genetically modified seeds. Monsanto wanted to move away from slower-growth businesses, such as selling chemicals and fertilizers. It ultimately wanted to sell corn seeds in Indonesia but decided to start with cotton, a less controversial product because it isn't eaten.

The collapse of President Suharto's regime, which tipped the country into anarchy, set back Monsanto's lobbying efforts. Dissatisfied with progress made by its local consultant, Monsanto turned to a local firm, PT Harvest International Indonesia. Harvest was founded in 1990 by Mr. Goldstein, 65, who has advised foreign companies doing businesses in Indonesia for decades.

A well-connected lobbyist, Mr. Gold

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