Tyson Foods Resolves Claims Involving Mexican Subsidiary

Tyson officials conducted an investigation and promptly 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).

2/11/2011 --- Tyson Foods announced that it has resolved a matter with the U.S. government involving Tyson's voluntary disclosure of improper payments related to an export program at the company's Mexican poultry subsidiary.

In early 2007, Tyson voluntarily reported that improper payments of more than $100,000 had been made by Tyson de Mexico 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 program.

The payments began years ago, before Tyson acquired an interest in the company that is now called Tyson de Mexico. At the time and for several years after Tyson acquired Tyson de Mexico, 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 officials conducted an investigation and promptly 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.

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 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 L. Van Bebber, executive vice president and general counsel for Tyson Foods. "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 U.S., nor were there any issues with the safety of the products.

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 one percent of Tyson Foods' total net sales.