MICHAEL L. SCOTT (CSBN 165452)
JEANE HAMILTON (CSBN 157834)
VICTOR ALI (CSBN 229544)
Antitrust Division
U.S. Department of Justice
450 Golden Gate Avenue
Box 36046, Room 10-0101
San Francisco, CA 94102
Telephone: (415) 436-6660
Attorneys for the United States |
Original Filed December 9, 2004 |
UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION
UNITED STATES OF AMERICA
v.
BAYER AG,
Defendant.
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No. CR 04-0235 MJJ
PLEA AGREEMENT
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PLEA AGREEMENT
The United States of America and Bayer AG ("defendant"), a corporation organized and
existing under the laws of Germany, hereby enter into the following Plea Agreement pursuant to
Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure ("Fed. R. Crim. P."):
RIGHTS OF DEFENDANT
1. The defendant understands its rights:
- to be represented by an attorney;
- to be charged by Indictment;
- as a corporation organized and existing under the laws of Germany, to
decline to accept service of the Summons in this case, and to contest the
jurisdiction of the United States to prosecute this case against it in the
United States District Court for the Northern District of California.
- to plead not guilty to any criminal charge brought against it;
- to have a trial by jury, at which it would be presumed not guilty of the
charge and the United States would have to prove every essential element of the charged
offense beyond a reasonable doubt for it to be found guilty;
- to confront and cross-examine witnesses against it and to subpoena
witnesses in its defense at trial;
- to appeal its conviction if it is found guilty at trial; and
- to appeal the imposition of sentence against it.
AGREEMENT TO PLEAD GUILTY AND WAIVE CERTAIN RIGHTS
2. The defendant waives the rights set out in Paragraph 1(b)-(g) above, including all
jurisdictional defenses to the prosecution of this case, and agrees voluntarily to consent to the
jurisdiction of the United States to prosecute this case against it in the United States District
Court for the Northern District of California. The defendant also waives the right to appeal the
imposition of sentence against it, so long as the sentence imposed is consistent with the
recommendation in Paragraph 8 of this Plea Agreement. The defendant agrees to have its
sentence determined under the United States Sentencing Guidelines ("U.S.S.G.") and waives all
constitutional challenges to the validity of the U.S.S.G. The defendant waives any right it may
have to have facts that determine its statutory maximum sentence or Guidelines fine range under
the U.S.S.G. (including any facts used to determine its offense level, base fine amount,
culpability score, or any specific offense characteristic or other enhancement or adjustment under
the U.S.S.G., as well as any pecuniary gain or loss resulting from the charged offense) alleged in
an indictment and found by a jury beyond a reasonable doubt. The defendant agrees that facts
that determine its statutory maximum sentence or Guidelines fine range will be found by the
Court at sentencing by a preponderance of the evidence and that the Court may consider any
reliable evidence, including hearsay, in making such determinations. Pursuant to Fed. R. Crim.
P. 7(b), the defendant will waive indictment and plead guilty at arraignment to a one-count
Information to be filed in the United States District Court for the Northern District of California.
The Information will charge the defendant with participating in a combination and conspiracy to
suppress and eliminate competition by maintaining and increasing the price of certain rubber
chemicals sold in the United States and elsewhere, beginning in or about July 1995 and
continuing until in or about December 2001, in violation of Section One of the Sherman Act (15
U.S.C. § 1).
3. The defendant, pursuant to the terms of this Plea Agreement, will plead guilty to
the criminal charge described in Paragraph 2 above and will make a factual admission of guilt to
the Court in accordance with Fed. R. Crim. P. 11, as set forth in Paragraph 4 below.
FACTUAL BASIS FOR OFFENSE CHARGED
4. Had this case gone to trial, the United States would have presented evidence to
prove the following facts:
- For purposes of this Plea Agreement, the "relevant period" is that period
beginning in or about July 1995 and continuing until in or about December 2001. During
the relevant period, the defendant was a corporation organized and existing under the
laws of Germany. The defendant has its principal place of business in Leverkusen,
Germany. During the relevant period, the defendant produced and sold certain rubber
chemicals in the United States and elsewhere. Rubber chemicals are a group of additives
used to improve the elasticity, strength, and durability of rubber products. Rubber
chemicals are used primarily in the manufacture of tires, outdoor furniture, hoses, belts,
and footwear.
- During the relevant period, the defendant, through its officers and
employees, participated in a conspiracy among major rubber chemical producers, the
primary purpose of which was to suppress and eliminate competition by maintaining and
increasing the price of certain rubber chemicals sold in the United States and elsewhere.
In furtherance of the conspiracy, the defendant, through its officers and employees,
engaged in discussions and attended meetings with representatives of other major rubber
chemical producers. During these discussions and meetings, agreements were reached to
maintain and increase the price of certain rubber chemicals to be sold in the United States
and elsewhere.
- During the relevant period, rubber chemicals sold by one or more of the
conspirator firms, and equipment and supplies necessary to the production and
distribution of rubber chemicals, as well as payments for rubber chemicals, traveled in
interstate and foreign commerce. The business activities of the defendant and its
co-conspirators in connection with the production and sale of rubber chemicals affected
by this conspiracy were within the flow of, and substantially affected, interstate and
foreign trade and commerce.
- Rubber chemicals affected by this conspiracy were sold by one or more of
the conspirators to customers in this District.
POSSIBLE MAXIMUM SENTENCE
5. The defendant understands that the maximum penalty which may be imposed
against it upon conviction for a violation of Section One of the Sherman Antitrust Act is a fine in
an amount equal to the greatest of:
- $10 million (15 U.S.C. § 1);
- twice the gross pecuniary gain the conspirators derived from the crime
(18 U.S.C. § 3571(c) and (d)); or
- twice the gross pecuniary loss caused to the victims of the crime by the
conspirators (18 U.S.C. § 3571(c) and (d)).
6. In addition, the defendant understands that:
- pursuant to § 8B1.1 of the United States Sentencing Guidelines
("U.S.S.G."), the Court may order it to pay restitution to the victims of the offense;
- pursuant to 18 U.S.C. § 3013(a)(2)(B) and U.S.S.G. § 8E1.1, the Court is
required to order the defendant to pay a $400 special assessment upon conviction for the
charged crime; and
- pursuant to 18 U.S.C. § 3561(c)(1), the Court may impose a term of
probation of at least one year, but not more than five years.
SENTENCING GUIDELINES
7. Sentencing for the offense to be charged will be conducted pursuant to the
U.S.S.G. Manual in effect on the day of sentencing. Pursuant to U.S.S.G. § 1B1.8, the United
States agrees that self-incriminating information that the defendant provides to the United States
pursuant to this Plea Agreement will not be used to increase the volume of affected commerce
attributable to the defendant or in determining the defendant's applicable sentencing guidelines
range, except to the extent provided in U.S.S.G. § 1B1.8(b).
SENTENCING AGREEMENT
8. Pursuant to Fed. R. Crim. P. 11(c)(1)(C), the United States and the defendant
agree that the appropriate disposition of this case is, and agree to recommend jointly that the
Court impose a sentence requiring the defendant to pay to the United States a criminal fine of
$66 million, pursuant to 18 U.S.C. § 3571(d), payable in full before the fifteenth (15th) day after
the date of judgment ("the recommended sentence").
- The defendant understands that the Court will order it to pay a $400
special assessment, pursuant to 18 U.S.C. § 3013(a)(2)(B) and U.S.S.G. § 8E1.1, in
addition to any fine imposed.
- Neither party will recommend a term of probation, but the defendant
understands that the Court is free to impose a term of probation.
- Subject to the ongoing, full, and truthful cooperation of the defendant
described in Paragraph 12 of this Plea Agreement, and before sentencing in the case, the
United States will fully advise the Court of the fact, manner, and extent of the defendant's
cooperation and its commitment to prospective cooperation with the United States'
investigation and prosecutions, all material facts relating to the defendant's involvement
in the charged offense, and all other relevant conduct. The United States and the
defendant jointly submit that this Plea Agreement, together with the record that will be
created by the United States and the defendant at the plea and sentencing hearings, will
provide sufficient information concerning the defendant, the crime charged in this case,
and the defendant's role in the crime to enable the meaningful exercise of sentencing
authority by the Court under 18 U.S.C. § 3553. The United States and defendant agree to
request jointly that the Court accept the defendant's guilty plea and impose sentence on
an expedited schedule as early as the date of arraignment, based upon the record provided
by the defendant and the United States, under the provisions of Fed. R. Crim. P.
32(c)(1)(A)(ii), U.S.S.G. § 6A1.1, and Rule 18(b) of the Local Rules. The Court's denial
of the request to impose sentence on an expedited schedule will not void this Plea
Agreement.
9. The United States and the defendant agree that the applicable sentencing
guidelines fine range exceeds the fine contained in the recommended sentence set out in
Paragraph 8 above. Subject to the full and continuing cooperation of the defendant, as described
in Paragraph 12 of this Plea Agreement, and prior to sentencing in this case, the United States
agrees that it will make a motion, pursuant to U.S.S.G. § 8C4.1, for a downward departure from
the guidelines fine range and will request that the Court impose the recommended sentence set
out in Paragraph 8 of this Plea Agreement because of the defendant's substantial assistance in the
government's investigation and prosecutions of violations of federal criminal law in the rubber
chemicals industry and in another industry.
10. The United States and the defendant understand that the Court retains complete
discretion to accept or reject the recommended sentence provided for in Paragraph 8 of this Plea
Agreement.
- If the Court does not accept the recommended sentence, the United States
and the defendant agree that this Plea Agreement, except for Paragraph 10(b) below, shall
be rendered void. Neither party may withdraw from this Plea Agreement, however, based
on the imposition of a term of probation.
- If the Court does not accept the recommended sentence, the defendant will
be free to withdraw its guilty plea (Fed. R. Crim. P. 11(c)(5) and (d)). If the defendant
withdraws its plea of guilty, this Plea Agreement, the guilty plea, and any statement made
in the course of any proceedings under Fed. R. Crim. P. 11 regarding the guilty plea or
this Plea Agreement or made in the course of plea discussions with an attorney for the
government shall not be admissible against the defendant in any criminal or civil
proceeding, except as otherwise provided in Fed. R. Evid. 410. In addition, the defendant
agrees that, if it withdraws its guilty plea pursuant to this subparagraph of the Plea
Agreement, the statute of limitations period for any offense referred to in Paragraph 14 of
this Plea Agreement will be tolled for the period between the date of the signing of the
Plea Agreement and the date the defendant withdrew its guilty plea or for a period of
sixty (60) days after the date of the signing of the Plea Agreement, whichever period is
greater.
11. In light of the private civil cases filed, which potentially provide for a recovery of a
multiple of actual damages, the United States agrees that it will not seek a restitution order for
the offense charged in the Information.
DEFENDANT'S COOPERATION
12. The defendant and any of its subsidiaries engaged in the sale or production of
rubber chemicals (collectively, "related entities") will cooperate fully and truthfully with the
United States in the prosecution of this case, the conduct of the current federal investigation of
violations of federal antitrust and related criminal laws involving the manufacture or sale of
rubber chemicals, and any litigation or other proceedings arising or resulting from any such
investigation to which the United States is a party ("Federal Proceeding"). The ongoing, full,
and truthful cooperation of the defendant and its related entities shall include, but not be limited
to:
- producing to the United States all non-privileged documents, information,
and other materials, wherever located, in the possession, custody, or control of the
defendant or its related entities, requested by the United States in connection with any
Federal Proceeding; and
- using its best efforts to secure the ongoing, full, and truthful
cooperation, as defined in Paragraph 13 of this Plea Agreement, of the current and
former directors, officers, and employees of the defendant and its related entities as
may be requested by the United States, but excluding Jurgen Ick, Martin Petersen,
Gunter Monn, Wolfgang Koch, and Volker Holitsch, and, including making these
persons available in the United States and at other mutually agreed-upon locations,
at the defendant's expense, for interviews and the provision of testimony in grand
jury, trial, and other judicial proceedings in connection with any Federal
Proceeding.
13. The ongoing, full, and truthful cooperation of each person described in
Paragraph 12(b) above will be subject to the procedures and protections of this paragraph,
and shall include, but not be limited to:
- producing in the United States and at other mutually agreed-upon
locations all non-privileged documents, including claimed personal documents,
and other materials, wherever located, requested by attorneys and agents of the
United States;
- making himself or herself available for interviews in the United
States and at other mutually agreed-upon locations, not at the expense of the
United States, upon the request of attorneys and agents of the United States;
- responding fully and truthfully to all inquiries of the United States
in connection with any Federal Proceeding, without falsely implicating any person
or intentionally withholding any information, subject to the penalties of making
false statements (18 U.S.C. § 1001) and obstruction of justice (18 U.S.C. § 1503);
- otherwise voluntarily providing the United States with any non-privileged material or information not requested in (a) - (c) of this paragraph that
he or she may have that is related to any Federal Proceeding;
- when called upon to do so by the United States in connection with
any Federal Proceeding, testifying in grand jury, trial, and other judicial
proceedings fully, truthfully, and under oath, subject to the penalties of perjury (18
U.S.C. § 1621), making false statements or declarations in grand jury or court
proceedings (18 U.S.C. § 1623), contempt (18 U.S.C. §§ 401-402), and obstruction
of justice (18 U.S.C. § 1503); and
- agreeing that, if the agreement not to prosecute him or her in this
Plea Agreement is rendered void under Paragraph 15(c), the statute of limitations
period for any Relevant Offense as defined in Paragraph 15(a) will be tolled as to
him or her for the period between the date of the signing of this Plea Agreement
and six (6) months after the date that the United States gave notice of its intent to
void its obligations to that person under the Plea Agreement.
GOVERNMENT'S AGREEMENT
14. Upon acceptance of the guilty plea called for by this Plea Agreement and
the imposition of the recommended sentence, and subject to the cooperation requirements
of Paragraph 12 of this Plea Agreement, the United States agrees that it will not bring
further criminal charges against the defendant or any of its related entities for any act or
offense committed before the date of this Plea Agreement that was undertaken in
furtherance of an antitrust conspiracy involving the manufacture or sale of rubber
chemicals. The nonprosecution terms of this paragraph do not apply to civil matters of
any kind, to any violation of the federal tax or securities laws, or to any crime of violence.
15. The United States agrees to the following:
- Upon the Court's acceptance of the guilty plea called for by this
Plea Agreement and the imposition of the recommended sentence and subject to
the exceptions noted in Paragraph 15(c), the United States will not bring criminal
charges against any current or former director, officer, or employee of the
defendant or any of its related entities for any act or offense committed before the
date of this Plea Agreement and while that person was acting as a director, officer,
or employee of the defendant or any of its related entities that was undertaken in
furtherance of an antitrust conspiracy involving the manufacture or sale of rubber
chemicals ("Relevant Offense"), except that the protections granted in this
paragraph shall not apply to Jurgen Ick, Martin Petersen, Gunter Monn, Wolfgang
Koch, and Volker Holitsch;
- Should the United States determine that any current or former
director, officer, or employee of the defendant or any of its related entities may
have information relevant to any Federal Proceeding, the United States may request
that person's cooperation under the terms of this Plea Agreement by written
request delivered to counsel for the individual (with a copy to the undersigned
counsel for the defendant) or, if the individual is not known by the United States to
be represented, to the undersigned counsel for the defendant;
- If any person requested to provide cooperation under Paragraph
15(b) fails to comply with his or her obligations under Paragraph 13, then the terms
of this Plea Agreement as they pertain to that person, and the agreement not to
prosecute that person granted in this Plea Agreement, shall be rendered void;
- Except as provided in Paragraph 15(e), information provided by a
person described in Paragraph 15(b) to the United States under the terms of this
Plea Agreement pertaining to any Relevant Offense, or any information directly or
indirectly derived from that information, may not be used against that person in a
criminal case, except in a prosecution for perjury (18 U.S.C. § 1621), making a
false statement or declaration (18 U.S.C. §§ 1001, 1623), or obstruction of justice
(18 U.S.C. § 1503);
- If any person who provides information to the United States under
this Plea Agreement fails to comply fully with his or her obligations under
Paragraph 13 of this Plea Agreement, the agreement in Paragraph 15(d) not to use
that information or any information directly or indirectly derived from it against
that person in a criminal case shall be rendered void;
- The nonprosecution terms of this paragraph do not apply to civil
matters of any kind, to any violation of the federal tax or securities laws, or to any
crime of violence; and
- Documents provided under Paragraphs 12(a) and 13(a) shall be
deemed responsive to outstanding grand jury subpoenas issued to the defendant or
any of its related entities.
16. The United States agrees that when any person travels to the United States
for interviews, grand jury appearances, or court appearances pursuant to this Plea
Agreement, or for meetings with counsel in preparation therefor, the United States will
take no action, based upon any Relevant Offense, to subject such person to arrest,
detention, or service of process, or to prevent such person from departing the United
States. This paragraph does not apply to an individual's commission of perjury (18 U.S.C.
§ 1621), making false statements (18 U.S.C. § 1001), making false statements or
declarations in grand jury or court proceedings (18 U.S.C. § 1623), obstruction of justice
(18 U.S.C. § 1503), or contempt (18 U.S.C. §§ 401-402) in connection with any testimony
or information provided or requested in any Federal Proceeding.
17. The defendant understands that it may be subject to administrative action
by federal or state agencies other than the United Stated Department of Justice, Antitrust
Division, based upon the conviction resulting from this Plea Agreement, and that this Plea
Agreement in no way controls whatever action, if any, other agencies may take. However,
the United States agrees that, if requested, it will advise the appropriate officials of any
governmental agency considering such administrative action of the fact, manner, and
extent of the cooperation of the defendant and its related entities as a matter for that
agency to consider before determining what administrative action, if any, to take.
REPRESENTATION BY COUNSEL
18. The defendant has been represented by counsel and is fully satisfied that its
attorneys have provided competent legal representation. The defendant has thoroughly
reviewed this Plea Agreement and acknowledges that counsel has advised it of the nature
of the charge, any possible defenses to the charge, and the nature and range of possible
sentences.
VOLUNTARY PLEA
19. The defendant's decision to enter into this Plea Agreement and to tender a
plea of guilty is freely and voluntarily made and is not the result of force, threats,
assurances, promises, or representations other than the representations contained in this
Plea Agreement and the Bayer Cooperation Agreement, filed separately with the Court.
The United States has made no promises or representations to the defendant as to whether
the Court will accept or reject the recommendations contained within this Plea Agreement.
VIOLATION OF PLEA AGREEMENT
20. The defendant agrees that, should the United States determine in good faith,
during the period that any Federal Proceeding is pending, that the defendant or any of its
related entities have failed to provide full and truthful cooperation, as described in
Paragraph 12 of this Plea Agreement, or has otherwise violated any provision of this Plea
Agreement, the United States will notify counsel for the defendant in writing by personal
or overnight delivery or facsimile transmission and may also notify counsel by telephone
of its intention to void any of its obligations under this Plea Agreement (except its
obligations under this paragraph), and the defendant and its related entities shall be subject
to prosecution for any federal crime of which the United States has knowledge including,
but not limited to, the substantive offenses relating to the investigation resulting in this
Plea Agreement. The defendant and its related entities may seek court review of any
determination made by the United States under this Paragraph to void any of its
obligations under the Plea Agreement. The defendant and its related entities agree that, in
the event that the United States is released from its obligations under this Plea Agreement
and brings criminal charges against the defendant and its related entities for any offense
referred to in Paragraph 14 of this Plea Agreement, the statute of limitations period for
such offense will be tolled for the period between the date of the signing of this Plea
Agreement and six (6) months after the date the United States gave notice of its intent to
void its obligations under this Plea Agreement.
21. The defendant understands and agrees that in any further prosecution of it
or its related entities resulting from the release of the United States from its obligations
under this Plea Agreement, because of the defendant's or its related entities' violation of
the Plea Agreement, any documents, statements, information, testimony, or evidence
provided by it, its related entities, or current or former directors, officers, or employees of
it or its related entities to attorneys or agents of the United States, federal grand juries, or
courts, and any leads derived therefrom, may be used against it or its related entities in any
such further prosecution. In addition, the defendant unconditionally waives its right to
challenge the use of such evidence in any such further prosecution, notwithstanding the
protections of Fed. R. Evid. 410.
ENTIRETY OF AGREEMENT
22. This Plea Agreement and the Bayer Cooperation Agreement, filed
separately with the Court, constitute the entire agreement between the United States and
the defendant concerning the disposition of the criminal charge in this case. This Plea
Agreement cannot be modified except in writing signed by the United States and the
defendant.
23. The undersigned is authorized to enter into this Plea Agreement on behalf
of the defendant as evidenced by the Resolution of the Board of Directors of the defendant
attached to, and incorporated by reference, in this Plea Agreement.
24. The undersigned attorneys for the United States have been authorized by
the Attorney General of the United States to enter this Plea Agreement on behalf of the
United States.
25. A facsimile signature shall be deemed an original signature for the purpose
of executing this Plea Agreement. Multiple signature pages are authorized for the purpose
of executing this Plea Agreement.
DATED: 7/8/04
BAYER AG
BY: |
_______________/s/________________
Dr. Roland Hartwig
General Counsel
Bayer AG
Corporate Center, Law & Patents
D-51368 Leverkusen, Germany |
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Respectfully submitted,
U.S. DEPARTMENT OF JUSTICE
ANTITRUST DIVISION
BY: |
_______________/s/________________
Michael L. Scott
Jeane Hamilton
Victor Ali
Attorneys
450 Golden Gate Avenue
Box 36046, Room 10-0101
San Francisco, CA 94102
(415) 436-6660 |
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COUNSEL FOR BAYER AG
BY: |
_______________/s/________________
Phillip A. Proger, Esq.
Brian K. Grube, Esq.
Ryan C. Thomas, Esq.
Jones Day
51 Louisiana Ave., N.W.
Washington, DC 20001-2113 |
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