United Brands Co., one of the world's major food distributors, pleaded guilty yesterday in federal court to conspiring to pay $2.5 million in bribes to a former official of the Honduras government.
U.S. District Court Judge William Connor, in New York, leveled the maximum fine of $15,000 against UB, which in 1977 had sales of $2.4 billion.
UB immediatedly issued a press release claiming it still did not believe that "this situation was actionable." However, the release said, "it was far better to settle with the government for this modest amount than to engage in prolonged litigation."
The UB scandal unfolded dramatically on Feb. 3, 1975, when the company's chairman and chief executive officer, Eli M. Black, jumped to his death from his 44th floor office in midtown Manahattan.
The Securities and Exchange Commission, which instituted a routine investigation following the suicide, was told by the U.S. Embassy in Tegucigalpa of reports of bribes by the company to high Honduran officials.
The payments allegedly were made to Abraham Bennaton Ramos, then the Honduran Minister of the Economy. Bennaton, who was removed from office and still faces criminal charges in Honduras, was named as a co-conspirator in the U.S. criminal case.
The case was brought by the U.S. Attorney's office in Manhattan with help from the inter-agency task force here which is investigating some 40 cases of questionable foreign payments by American corporations.
According to a statement issued yesterday by the Manhattan U.S. Attorney's office, the bribes were discussed during a May 8, 1974, meeting between Black and another unnamed UB officer.
In August, Bennatonn met in Miami with a UB vice president and the Honduran indicated that a substantial reduction in his country's banana export tax and a 20 year extension of UB concession there could be arranged, according to the release. In exchange, Bennaton allegedly demanded that UB pay a multimillion dollar bribe into a Swiss bank account.
After a series of telephone calls between Black and other UB executives, Bennaton allegedly was told he would get bribes totaling $2.5 million, to be paid in two equal installments.
That same month, the Honduran banana export tax was reduced from 50 cents to 25 cents per box.
According to yesterday's release, UB executive officers then traveled to Zurich, met with Bennaton, and arranged for $1.25 million to be deposited in his account at Credit Suisse Bank.