Monsanto Company (NYSE: MON) today announced it has resolved U.S. Securities and Exchange Commission (SEC) and U.S. Department of Justice (DOJ) investigations related to Monsanto's discovering and reporting to the SEC Staff and DOJ improper payments and related financial irregularities in connection with the Company's Indonesian affiliates.

In its settlement with the SEC, Monsanto shall cease and desist from any further violations of the Foreign Corrupt Practices Act (FCPA) and pay a penalty of $500,000. Monsanto also agreed to retain for a period of three years an independent compliance consultant to review and evaluate the Company's policies and procedures to ensure compliance with the FCPA.

Under the Deferred Prosecution Agreement (DPA) with DOJ, which is subject to judicial approval, Monsanto agreed to: pay a penalty of $1 million; continue the Company's compliance program, which is mandatory for all employees; and retain an independent compliance consultant. The DPA requires that for three years the independent consultant review the Company's policies and procedures as they relate to FCPA compliance. If the Company complies with the terms of the agreement for three years, the charges deferred under the DPA will be permanently dismissed. The DPA and the SEC Order both reference Monsanto's cooperation with the government's investigations.

"Monsanto accepts full responsibility for these improper activities, and we sincerely regret that people working on behalf of Monsanto engaged in such behavior," said Monsanto's General Counsel Charles W. Burson. "The Company has taken remedial actions to address the activities in Indonesia. At every stage of this process -- beginning with our voluntary disclosure and throughout the governmental investigations and settlement process -- Monsanto has been fully cooperative, and has made clear that improper activities will not be tolerated by the Company. We are pleased today to begin the process of putting these matters to rest."

The settlement with DOJ centers on an illegal $50,000 payment in 2002 to an Indonesian government official made by a former outside consultant of the Company's Indonesian affiliates at the direction of a former U.S.-based senior Monsanto manager. The payment, which the senior Monsanto manager told the consulting firm employee not to discuss with any other Monsanto employee, was made to influence an Indonesian official to repeal or amend an unfavorable decree that was likely to have an adverse effect on Monsanto's business in that country. Despite the payment, the official never repealed or amended the decree. The books and records violation stems from the fact that the senior Monsanto manager and outside consultant presented false information to obtain a reimbursement for the improper payment which, in turn, was recorded as a legitimate business expense.

The SEC Order includes charges for the aforementioned $50,000 payment and related books and records and internal controls violations. The Order also includes additional charges for books and records and internal controls violations involving a series of illegal or questionable payments totaling at least $700,000 made to various Indonesian government officials between 1997 and 2002. These payments were financed, in part, through unauthorized, improperly documented, and inflated sales of Monsanto's pesticide products in Indonesia. During this period, the Indonesian affiliates violated the accounting policies, controls, and procedures of Monsanto.

Monsanto became aware of financial irregularities in its Indonesian affiliates in 2001. Monsanto began an internal investigation, which continued at the direction of the Board of Directors. The Company voluntarily notified the SEC Staff and DOJ of the results of this investigation, and disclosed the books and records and compliance irregularities involving the Indonesian affiliates. Subsequent governmental investigations revealed the $50,000 payment to the Indonesian official. Monsanto updated its disclosures as this additional information was developed, and cooperated with both the SEC and DOJ throughout their investigations.

Since learning of the irregularities, Monsanto has terminated those employees involved with the improper activities, as well as the outside consultant. The Company has also revised its accounting treatment of subject transactions, restructured its Indonesian affiliates, appointed a new Director of Business Conduct, and implemented an improved and expanded FCPA compliance program worldwide.

Net combined revenues from customers in Indonesia were less than 1 percent of total corporate revenues during the past four years.

Monsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality.