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  1. #1
    Mid
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    SEC charges tobacco companies with bribing foreign government officials

    SEC charges tobacco companies with bribing foreign government officials
    Freddie Mooche

    Washington -
    The Securities and Exchange Commission charged Universal Corp. (NYSE: UVV) and Alliance One International (NYSE: AOI) with bribing foreign government officials. The SEC says the two tobacco companies paid $5 million to officials in Thailand and other countries to illicitly obtain tobacco sales contracts. Both companies quickly moved to settle the charges, paying millions in fines and discorgement.

    The SEC alleges that Richmond, Va.-based Universal Corporation Inc. and two competitors who have since merged to form Alliance One International Inc. engaged in a coordinated bribery scheme in Thailand. Universal paid approximately $800,000 in bribes to officials with the government-owned Thailand Tobacco Monopoly (TTM) in exchange for securing approximately $11.5 million worth of tobacco sales contracts for its subsidiaries in Brazil and Europe. The companies that became Alliance One - Dimon Inc. and Standard Commercial Corporation - paid more than $1.2 million in bribes to TTM officials to obtain more than $18.3 million in sales contracts.

    The SEC further alleges that Dimon and Standard (now Alliance One) made improper payments in China, Greece, Indonesia, and Kyrgyzstan while failing to properly record the true nature of the payments in its accounting records. Universal made improper payments in Malawi and Mozambique and failed to properly record them in their books and records.

    To settle the SEC's charges against them, Universal agreed to pay disgorgement of more than $4.5 million and Morrisville, N.C.-based Alliance One agreed to pay $10 million in disgorgement. Universal agreed to pay a criminal fine of $4.4 million and Alliance One agreed to pay a criminal fine of $9.45 million in separate criminal proceedings announced today by the U.S. Department of Justice.

    "These large tobacco merchants used secret payments to improperly win business and curry favor with foreign government officials around the globe," said Christopher Conte, Associate Director in the SEC's Division of Enforcement.

    In separate complaints filed in the U.S. District Court for the District of Columbia, the SEC alleges that Universal and Alliance One violated the anti-bribery, books and records, and internal control provisions of the FCPA through their misconduct, which began as early as 1996 in Kyrgyzstan. The bribery scheme in Thailand took place between 2000 and 2004.

    axcessnews.com

  2. #2
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    I cannot resolve the personal conflict between thinking drugs should be legalized and taxed, and being disgusted at the behavior of the cigarette companies.

  3. #3
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    These bribes were paid to the managment of the Thai Tobacco Monopoly, just like all government agencies in Thailand they will not buy unless they receive a backhander,

  4. #4
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    Thai tobacco officials 'took B62m bribes'

    US JUSTICE DEPT LAYS CHARGES IN BRAZILIAN CIGARETTE SCAM
    8/08/2010

    Thailand Tobacco Monopoly officials have been accused of accepting bribes of over US$1.93 million (62 million baht) from US-based companies to ensure Brazilian-grown tobacco was sold locally, says the US Justice Department.

    The accusations came after two American tobacco companies agreed on Friday to pay nearly US$30 million to settle charges that they bribed foreign officials to get lucrative overseas tobacco sales contracts.

    Local officials could not be reached for comment yesterday.

    Universal Corp of Richmond, Virginia, and Alliance One International of Morrisville, North Carolina, face civil and criminal charges from the Securities and Exchange Commission and the Justice Department.

    Universal was accused of bribing officials in Thailand, Malawi and Mozambique, while Alliance One was accused of bribing officials in Thailand, China, Greece, Indonesia and Kyrgyzstan.

    Alliance One pleaded guilty to three counts of conspiring to violate the US's Foreign Corrupt Practices Act (FCPA).

    "The charges relate to bribes paid to Thai government officials to secure contracts with the Thailand Tobacco Monopoly, a Thai government agency, for the sale of tobacco leaf," the Justice Department said.

    Alliance One was formed in 2005 from the merger of Dimon Incorporated and Standard Commercial Corporation, two tobacco wholesalers.

    It buys, processes and sells tobacco to manufacturers worldwide.

    The guilty pleas relate to the conduct of employees and agents of foreign subsidiaries of both Dimon and Standard prior to the 2005 merger, the US Justice Department said.

    The department said that it had also filed two counts against Universal Brazil for conspiring to violate the FCPA by paying bribes to Thailand Tobacco Monopoly employees for the sale of Brazilian tobacco.

    It didn't say how many Thai officials were involved.

    The Justice Department said that from 2000 to 2004, Dimon, Standard and Universal Brazil sold Brazilian tobacco to the Thailand Tobacco Monopoly.
    No Thai officials were named by the department.

    "Each of the three companies retained sales agents in Thailand, and collaborated through those agents to apportion tobacco sales to the Thailand Tobacco Monopoly among themselves, co-ordinate their sales prices, and pay kickbacks to officials of the Thailand Tobacco Monopoly in order to ensure that each company would share in the Thai tobacco market.

    "To secure the sales contracts, each company admitted it paid kickbacks to certain Thailand Tobacco Monopoly representatives based on the number of kilogrammes of tobacco sold to the Thailand Tobacco Monopoly.

    "To obtain these contracts, Dimon paid bribes totalling $542,590 and Standard paid bribes totalling $696,160, for a total of $1,238,750 in bribes paid to the Thailand Tobacco Monopoly officials during the course of four years."

    Universal admitted paying $697,000 in kickbacks to the monopoly officials, the Justice Department said.

    It had agreed to pay a $4.4 million fine and retain an anti-corruption monitor for three years.

    Universal Corp said the company voluntarily reported the problems to authorities and that it has cooperated with the investigation.

    "We have absolutely no tolerance for this type of activity," chief executive officer George C Freeman III said.

    bangkokpost.com

  5. #5
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    http://www.bangkokpost.com/news/loca...o-tobacco-scam


    DSI eager to look into tobacco scam

    Ministry asked to lay complaint about TTM
    • Published: 9/08/2010 at 12:00 AM
    • Newspaper section: News

    A local investigation is expected into US allegations that Thailand Tobacco Monopoly staff accepted US$1.93 million (62 million baht) in bribes to buy Brazilian tobacco.

    The Department of Special Investigation has asked the Finance Ministry to file a complaint against the TTM staff so it can look into the allegations.

    DSI director-general Tharit Pengdit told the Bangkok Post yesterday the Finance Ministry, which supervises the state-owned cigarette maker, should file a complaint with the DSI so it can look into the US claims.

    The US embassy could also file a complaint with the DSI, he said.

    The US Justice Department claims TTM staff accepted bribes of over 62million baht from US-based companies to ensure TTM bought Brazilian-grown tobacco.

    Sathit Limpongpan, permanent secretary for finance, said his ministry would work with the Justice Ministry to seek information from the US Justice Department and would conduct an initial investigation.

    The accusations came after two US tobacco companies agreed on Friday to pay nearly $30 milllion (962 million baht) to settle charges that they bribed foreign officials, including some in Thailand, to secure lucrative overseas tobacco sales contracts.

    The DSI chief said the case was similar to one brought against former Tourism Authority of Thailand governor Juthamas Siriwan for allegedly taking bribes from US film-makers.

    The US Justice Department pressed charges against a Los Angeles film-making couple - Gerald Green and his wife Patricia - who were awarded a 60 million baht contract to host the Bangkok International Film Festival from 2003 to 2006.

    It accused them of paying Ms Juthamas bribes to to secure the contract.

    The DSI took up the case following a complaint from the TAT.

    The DSI conducted a joint investigation with the US Federal Bureau of Investigation into the charges against Ms Juthamas, who it accuses of accepting bribes of more than $1.7 million from the Greens.

    The DSI sent its investigation to the National Anti-Corruption Commission (NACC) which notified Ms Juthamas in late May of the charges.

    In the tobacco case, Universal Corp of Richmond, Virginia, and Alliance One International of Morrisville, North Carolina, face civil and criminal charges brought against them by the US Securities and Exchange Commission and the Justice Department.

    Universal is accused of bribing officials in Thailand, Malawi and Mozambique, while Alliance One is accused of bribing officials in Thailand, China, Greece, Indonesia and Kyrgyzstan.

    "The charges relate to bribes paid to Thai government officials to secure contracts with the Thailand Tobacco Monopoly, a Thai government agency, for the sale of tobacco leaf," the Justice Department said in a written statement released on Friday.

    The department said it had also filed two counts against Universal Brazil for conspiring to violate the Foreign Corrupt Practices Act by paying bribes to TTM staff for the sale of Brazilian tobacco.

    It did not say how many Thais were involved.

    Alliance One was formed in 2005 through the merger of Dimon Incorporated and Standard Commercial Corporation, two tobacco wholesalers.

    The guilty pleas relate to the conduct of employees and agents of foreign subsidiaries of Dimon and Standard prior to the 2005 merger, the department said.

    The Justice Department said that, from 2000 to 2004, Dimon, Standard and Universal Brazil sold Brazilian tobacco to TTM. No Thai officials were named by the department.

    "Each of the three companies retained sales agents in Thailand, and collaborated through those agents to apportion tobacco sales to the Thailand Tobacco Monopoly among themselves, coordinate their sales prices, and pay kickbacks to officials of the Thailand Tobacco Monopoly in order to ensure that each company would share in the Thai tobacco market," the Justice Department said.
    "Slavery is the daughter of darkness; an ignorant people is the blind instrument of its own destruction; ambition and intrigue take advantage of the credulity and inexperience of men who have no political, economic or civil knowledge. They mistake pure illusion for reality, license for freedom, treason for patriotism, vengeance for justice."-Simón Bolívar

  6. #6
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    The TAT bribery case has been going on for a few years and they finally notified the receipt of the bribe money of charges, in May. If they can screw around a bit longer the statue of limitations will run out on this case as so often seems to happen.

    The court transcripts are available for any appointed committee who wants detailed answers, with justice being the target. What a example of justice to set for the world and Thailand.

  7. #7
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    Inquiries open into tobacco bribe claims
    12/08/2010

    NACC will make final ruling on allegations

    Three inquiries are being launched into claims that Thailand Tobacco Monopoly staff received multi-million-baht bribes from US tobacco wholesalers.


    Tharit: Waits for word from ministry

    The National Anti-Corruption Commission (NACC), the Public Sector Anti-Corruption Commission (PACC) and the Department of Special Investigation (DSI) will look into claims that TTM staff accepted US$1.93 million (62 million baht) in bribes to buy Brazilian tobacco leaf.

    The Finance Ministry, which supervises the state-owned cigarette maker, will ask the Justice Ministry to look into the allegations and seek information from the US Justice Department, DSI director-general Tharit Pengdit said yesterday.

    The Justice Ministry will then assign the DSI and the PACC to investigate, he said.

    The US Justice Department claims TTM staff accepted the bribes from US-based companies to ensure TTM purchased Brazilian-grown tobacco.

    Universal Corp of Richmond, Virginia, and Alliance One International of Morrisville, North Carolina, face civil and criminal charges from the US Securities and Exchange Commission and the Justice Department.

    Universal is accused of bribing officials in Thailand, Malawi and Mozambique, while Alliance One is accused of bribing officials in Thailand, China, Greece, Indonesia and Kyrgyzstan.


    Kittipong: Separate inquiries

    Permanent secretary for justice Kittipong Kittayarak said the PACC would look into the involvement of state officials. The DSI would conduct its own investigation as bribe-taking was a serious offence.

    Mr Kittipong said Pakdi Porsiri, a member of the NACC, told him the national anti-graft agency was also interested in the case and would launch an inquiry.

    The permanent secretary said the three agencies would conduct separate investigations. The findings of the inquiries would be submitted to the NACC, which would give a ruling on what further action should be taken.

    Mr Pakdi said the NACC board would send staff to the US to work with the US Justice Department.

    The NACC would seek information from the TTM on its purchases of tobacco leaf between 2000 and 2004, and which staff were involved.

    An inquiry panel would then be set up, the NACC commissioner said.

    bangkokpost.com

  8. #8
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    Where there's smoke
    15/08/2010

    KEY DATES How the arrangement between Thai tobacco officials and the Brazilian subsidiary of Universal Corporation allegedly unfolded

    It started with dinner in Brazil attended by Thai tobacco officials and snowballed into an avalanche of graft and corruption with large ''special commissions'' paid into a Hong Kong bank account and gifts of watches, computers and sightseeing junkets to Las Vegas and Los Angeles.



    The US Securities and Exchange Commission (SEC) complaints against two tobacco giants at the centre of a multi-million-baht bribery scandal threatening to engulf the Thailand Tobacco Monopoly (TTM) make for disturbing reading. Not only is a culture of ''bribes-for-business'' made clear when dealing with the Thai officials, but also near non-existent accounting methods by the US-based tobacco companies - Alliance One International and Universal Corp. The crucial roles of local ''commission agents'' to facilitate the deals are also highlighted in the SEC allegations which do not name any tobacco company or Thai officials.



    The two companies recently agreed to pay nearly US$30 million to settle charges that they bribed foreign officials - with unnamed TTM officials accused of taking close to $2 million in kickbacks to secure the sale of Brazilian tobacco leaf in Thailand between 2000-2004.

    From 2000-2006 the managing director of TTM was Suchon Watanapongvanich.

    According to the SEC complaint against Universal, between 2000 and 2004 the company paid TTM officials US$800,000 to secure sales for its Brazilian and European subsidiaries totalling $11.5 million.

    The arrangement took root in early 2000, after TTM officials had expressed concern about the high cost of US tobacco and sought to buy it from other countries. Universal chose a commission agent in Thailand to help its Brazilian subsidiary, Universal Leaf Tabacos Limitada (ULTL), to help jlarrange for a TTM delegation to visit the subsidiary's headquarters in Santa Cruz do Sul, Brazil.

    On March 11, 2000, a ULTL executive hosted a dinner for the delegation also attended by the company's sales directors, an account representative for TTM and the commission agent. During a private conversation between the group, the agent stated that ULTL would have to agree to pay ''special expenses'' to obtain TTM business, which were ''kickbacks'' for certain members of the Thai agency, the complaint said.

    But ULTL wasn't the only company trying to sell Brazilian tobacco, as Dimon Incorporated and the Standard Commercial Corporation _ merged in 2005 to form Alliance One _ were making the same overtures.

    Dimon's former senior vice-president of sales, Tommy L Williams, was charged earlier this year with authorising bribes to TTM officials via Dimon's agent in Thailand. According to the SEC, Dimon and Standard paid more than $1.2 million to TTM officials from 2000-2004 to secure $18.3 million in sales. Among those payments was $50,000 allegedly paid to a political candidate who was also Standard's tobacco sales agent in Thailand.
    After the 2000 dinner, a ULTL jlaccount representative indicated the company would coordinate with other potential Brazilian tobacco suppliers for the same ''price and special expenses'' and confirmed to the agent they would pay $100,000 in special expenses.

    On March 23, 2000, ULTL submitted a bid through the agent which was inflated by the ''special commission'' amount. Six days later, the agent sent an email to ULTL advising that the TTM board had met and agreed to the request to replace some of the US tobacco with Brazilian tobacco. ULTL secured a contract for just over $1.6 million.

    In April, a second trip for TTM officials to Brazil was organised with ''tourist aspects'' and $3,000 in ''pocket money'' paid for by ULTL and other Brazilian suppliers.

    But the next month, the commission agent sent a fax to Universal's regional headquarters in Singapore warning that another Brazilian tobacco supplier wanted to sell to TTM.

    On May 17, the regional head wrote in a cover note on a fax to ULTL ''what (the agent) is saying is that if the 'special expenses' are paid prior to the next visit by the ... there should be no problem with other cheaper quotes.''

    ULTL directed the payment to a Thai bank account ''which purports to be a Thai fruit export company''. The payments were made in two $50,000 lots on June 13 and July 6 and recorded by the company as ''commissions paid''.

    Universal's European subsidiary struck a similar deal in 2000 to sell tobacco sourced from its Malawian subsidiary, Limbe Leaf Tobacco Company, to TTM.

    Once again, an inspection visit to Malawi for a TTM delegation was jlorganised with air fares paid for and $3,000 in ''pocket money''. Special expenses payments of $100,000 were requested as well as a $78,000 commission to the agent. After the 2000 deal, Universal made no further sales of Malawian tobacco to TTM.

    But the kickbacks from the Brazilian suppliers continued for the next four years in ''much the same fashion'', the SEC documents say.

    ''Each year, ULTL coordinated its bid price with one or more other Brazilian tobacco suppliers to the TTM.

    ''Each of the Brazilian suppliers, including ULTL, inflated its bid price to account for 'special expenses' and transmitted additional funds to its respective agent who each understood would in turn direct the payments to the TTM representative.''



    According to the SEC, in mid 2001 the agent instructed ULTL to pay 50% of the special payment to an account in Hong Kong held in the name of a person the tobacco company did not know. The agent directed ULTL to ''advise your bank not to mention our name in the remittance instruction''. Two payments of $110,000 were made to the account in July and August and recorded as ''commissions paid''.

    In April 2002, ULTL's agent said she had learned the special expenses that year would be set at $0.45 per kilogramme of tobacco purchased ''based on the condition there are only three regular suppliers''.

    The new arrangement continued, with the ''special expenses'' rising to $0.50 per kilogramme in 2003 and $0.80 in July 2004.

    ''I do not see any alternatives for us,'' a ULTL account representative wrote in an email to the agent.

    ''We have to play the game according to the rules. We are not happy about these extra 30 cents because they will affect our margins''.

    The agent replied in an email ''there is nothing much one can do''.

    Payments continued to be made to the Hong Kong account, with $195,040 paid in December 2004. A $61,897 payment was also requested to be paid into a German bank account for the agent.

    In 2005, TTM changed to a ''blind'' electronic auction process for purchasing tobacco and the commission agent advised ULTL the system would be transparent and no special expenses would be paid.

    The SEC documents on Dimon and Standard also alleged that improper payments and gifts were made tojl officials in Thailand and China.

    ''In 2002 and 2003, contemporaneous documents show that Standard employees provided watches, cameras, laptop computers and other gifts to Chinese and Thailand tobacco jlofficials.

    ''Standard also paid for dinner and sightseeing expenses during non-business related travel to Alaska, Los Angeles and Las Vegas for Chinese and Thailand government delegations''.

    Alliance One, the new merged company, was also accused by the SEC of paying bribes to government officials in China, Greece, Indonesia and Kyrgyzstan.

    In March 2004, the company noticed banking irregularities with certain accounts in Southern Europe and Central Asia and called in an outside law firm to conduct an investigation. The law firm said there may have been breaches of the US Foreign Corrupt Practices Act.

    The company reported the matter to the US Justice Department, closed the accounts and made personnel changes to try and ensure the corrupt practices were not repeated.

    After the TTM introduced the blind electronic auction in 2005, ULTL was awarded a contract for just over US$3.1 million. Since then, it has not sold any tobacco to Thailand.

    bangkokpost.com

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