Between 2002 and 2008, ACTI Ukraine, a commodities trader and seller, together with another ADM subsidiary Alfred C. Toepfer International G.m.b.H. (ACTI Hamburg) paid third-party vendors to pass on bribes to Ukrainian government officials to obtain value-added tax (VAT) refunds, violating the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA), according to the charges.
ADM was not prosecuted, though the Decatur, IL agribusiness giant agreed to return $36.5m in illegal profits to settle related civil charges filed the US Securities and Exchange Commission, bringing the total of criminal and regulatory penalties to $54m.
“ADM’s subsidiaries sought to gain a tax benefit by bribing government officials, and then attempted to deliberately conceal their conduct by funneling payments through local vendors,” said Acting Assistant Attorney General of the DOJ’s criminal division Mythili Raman in a statement. “ADM, in turn, failed to implement sufficient policies and procedures to prevent the bribe payments, although ultimately ADM disclosed the conduct, cooperated with the government, and instituted extensive remedial efforts.”
ADM responded 'in the right way'
ADM CEO Patricia Woertz insisted the company responded “in the right way, and that the steps we took, including self-reporting, underscore our commitment to conducting business ethically and responsibly”, according to a statement from ADM announcing the settlement.
In addition to undertaking an anti-corruption global risk analysis and compliance assessment, ADM took "disciplinary action," which included terminating a number of employees.
ADM spokesperson Jackie Anderson declined to specify how many employees were fired and other details of the disciplinary action, telling Milling & Grains in an email: “The Ukraine conduct involved a relatively small group of employees, principally former Toepfer employees in Ukraine and Germany.”
ACTI Ukraine and ACTI Hamburg didn’t respond to requests for further details and comment.
Anti-corruption program beefed up
Asked about preventive measures ADM planned to take on the heels of the scandal, Anderson noted that firm has beefed up its global anti-corruption program policies, procedures and internal controls.
“Our enhanced compliance program has a number of elements, which include additional training for many of our employees and due diligence of all third parties who may represent ADM before government agencies and officials,” she said. “These controls also address payments, charitable donations, returned funds and travel expenses. In addition, we have instituted monitoring and auditing of our key processes and accounts.”