The enforcement action against Tyson Foods announced yesterday by the DOJ and SEC contains some important lessons.
Here are three of them:
First, the cover up is often worse than the crime. From 2004 to 2006, Tyson paid around $90,000 to two veterinarian plant inspectors, and about $260,000 over ten years, either through phony invoices or through their wives’ no-show jobs. Chicken feed, excuse the pun, compared with some of the enforcement actions we've seen lately. But some Tyson people who should have known better learned about the bribes and didn't stop them. In fact, they formed a committee of top execs to think up ways to keep the bribes secret but still flowing. The SEC said: "It was not until two years after Tyson Foods officials first learned about the subsidiary’s illicit payments that its counsel instructed Tyson de Mexico to cease making the payments."
Second, public graft isn't a victimless crime. A myth peddled by opponents of compliance and fans of facilitating payments is that no one gets hurt and business keeps moving. Not true. As our friend Elizabeth Spahn has said about petty bribery, "Like it or not, we are all in this together. Everybody gets hurt." Last year, she delivered this prophetic message about graft and food and product safety risks:
If we get rich enough, maybe we could afford to personally avoid the avalanche of toxic products descending on clueless consumers of global products. Someone else’s puppies and babies get killed. We rich, educated very much First World Americans and Europeans can afford organic, locally grown slow food; children’s toys hand carved by hippies in Vermont or Tyrol. Caveat emptor, after all.
Third, companies deserve second chances. Although Tyson initially covered up its bribery, things changed. Somewhere along the line, some people at Tyson understood what the company had done. They self-reported the crimes to the DOJ and SEC. They cooperated in the investigation and the corporate clean up. And for that the company was rewarded with a two-year deferred prosecution agreement instead of the typical three-year deal. We believe in second chances for companies (and for people) who admit their crimes and try to make things right.
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