US meat giant Tyson Foods has been fined $5m over a claim involving improper payments made by its Mexican poultry subsidiary.
In 2007, Tyson reported that improper payments of around US$100,000 had been made by Tyson de Mexico to two Mexican government veterinarians. The veterinarians were responsible for certifying chicken products for export as part of a voluntary government inspection programme.
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The firm said yesterday (10 February) that the payments began before Tyson acquired an interest in the company, which is now called Tyson de Mexico. At the time and following the purchase by Tyson, 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 Mexico should have been discontinued.
Tyson said that company officials conducted an investigation and stopped the payments in late 2006, and reported their findings to the US Department of Justice (DOJ) and US Securities and Exchange Commission (SEC).
As a result, Tyson signed a deferred prosecution agreement, which meant paying a penalty of $4m to the DOJ, and a consent agreement with the SEC involving a ‘disgorgement’ payment, including interest, of $1.2m.
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By GlobalData“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,” David Van Bebber, Tyson’s executive VP and general counsel, said. “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.”
