If you call NNFA at 800-966-6632, and ask them what their position is on fluoridation, they'll tell you that they're very much against it. (They'll also tell you that they're looking out for your interests--- but are they REALLY? They're definitly looking out for BASF, Rhone Poulenc, and Warner Lambert's interests, (as well as CRN and FDA's and Alcoa Aluminum's) but are they TRUELY looking out for YOURS???) Check out the fluoride data below:
It seems very strange to me that NNFA is endorsing the National Academy of Sciences highly unscientific paper which the FDA illegally put on the table at the Berlin Codex meeting last September titled "A Risk Assessment Model for Establishing Upper Intake Levels for Nutrients" http://vm.cfsan.fda.gov/~download/nutrisk.exe
NNFA Executive Director Michael Ford (along with Karl Reidel and Randy Dennin of NNFA's International Committee have stated that they consider this paper to represent "sound science". (Reidel told me in Berlin at the Codex meeting that he hadn't read it, but never the less, considered it to be "sound science"-- does it make sense to sign off on something backed by the FDA sight unseen? Have Dennin and Ford actually read it either? Shouldn't the rank and file of NNFA take a very close look at what their leadership has signed off on?
In the "Risk Assessment" paper NAS considers fluoride to be an "essential nutrient", and in Table 1 (Tolerable Upper Intake Levels for Certain Nutrients and Food Components) of their paper, they say it is safe for people 9 years of age and older to consume a maximum level of 10 mg of fluoride per day. ("U.L." = the maximum level of daily nutrient intake that is likely to pose no risk of adverse effects.)
Lets take a much closer look at this: Please go to the website of the International Society of Fluoride Research (ISFR) which totally disputes NAS's contention that fluoride is safe AT ANY LEVEL: http://www.fluoride-journal.com/98-31-3/313-153.htm and download the two unanswered letters which ISFR sent to the NAS contesting their data.
You will see that ISFR has stated the following to NAS President Dr.Bruce Alberts: "As you may be aware, the Dietary Intakes report on calcium, magnesium, phosphorus, vitamin D, and fluoride prepared by the Institute of Medicine of the National Academy of Sciences and scheduled for publication this month contains a number of recommendations concerning fluoride that are cause for grave concern over their validity for setting public health policy."
To follow up on this situation, and try to find out if NAS ever did respond to ISFR's highly scientific and well founded criticism, I called Professor Paul Connett of St.Lawrence University, a member of ISFR who told me that when NAS refused to respond to their letters, he went to Washington and conducted a press conference in order to publicly challenge NAS's position, stating that they were selectively ignoring previous data they'd (NAS) had published, which uneqivocally showed that fluoride is a deadly toxin, unsafe for human consumption at ANY level.
Connett told me that due to his DC press conference, he was invited to come to NAS's next meeting to present his data. He was given just 15 minutes, so what he did was to create several overhead projector transparencies showing NAS's own data (which they were ignoring). He presented this to them, and asked them a simple question: "Do you know who's data this is?" (Dead Silence ensued which you could have cut with a knife.) "Its yours!," he exclaimed. "Why are you IGNORING your own data?"
(At that point, Connett told me that Allison Yates, Director of the National Academy of Sciences Food and Nutrition Board, stood, looked directly at Connett, and said the following: "Our position on fluoride has been finalized. We're not changing it."
(Translation: What NAS does isn't about science---- its about not losing research grants. NAS is a pack of intellectual prostitutes, they're not scientists. Paul Connett of St.Lawrence University is a scientist, but people like Allison Yates sure aren't- they're prostitutes- they could care less about sound public health policy, and apparently, FDA, CRN, and NNFA really don't care either.)
I tried to call Allison Yates several times. She never returned my calls. I talked to her underlings, who parroted the party line. She never responded to my email. So I called several times requesting that they please respond. Eventually they responded with a "blow off" letter that answered none of my questions.
FDA is clearly hiding behind the fact that NAS is not subject to scrutiny through the Freedom of Information Act. We can't get the raw data for their paper, or a list of the CVs of its authors- but I got one of them on my own, from the head of the Nutrition Dept. at University of North Carolina, and it clearly shows that he got over $1.5 Million last year in pharmaceutical research grants. He was just one of the authors of the heavily biased paper which NNFA has signed off on. We may never see the other CVs. NAS is under no obligation to give them up, despite the fact that the paper was underwritten by Federal Grants.
IAHF has been trying for the past YEAR to call attention to this sorry situation, more people need to start caring- or the fix will be in. More people need to help me get an Oversight hearing on this.
NNFA has bought into FDA's big lie that CODEX won't effect domestic sales within the USA. That is a blatant lie, but people who haven't taken the time to study the issue don't realize this. For complete information, please go to http://www.iahf.com to the Codex Oversight section and learn the sorry truth: By signing NAFTA and GATT, we also signed several "side agreements" such as Sanitary Phytosanitary Measures- which requires us to enter into a constant process of so called "harmonization" which is overseen by the International Council on Harmonization, and by a new international court: The Dispute Settlement Body.
In any case, even if this WEREN'T the case, shouldn't NNFA have some concern about how this unscientific NAS paper will effect people OUTSIDE the USA?
If NNFA claims to be anti fluoridation, shouldn't they be CONSISTENTLY anti fluoridation?
Don't the following ideas make good sense:
1. NNFA should have an open meeting policy wherein all members would have lists of all committees, and how to contact their members.
2. All NNFA members should be apprised of the points under discussion by their committees in advance of meetings in case they wish to have some input.
3. Minutes of all meetings should be made available to members upon request, and should be posted in the "Members Only" section of the NNFA website.
4. The Conflict of Interest bylaw (Article 14.3) should be strictly enforced. Pharmaceutical companies should not be allowed to be members of NNFA, and employees of them should ESPECIALLY not be allowed to chair ANY of their committees ----- ESPECIALLY not the International Committee, which NNFA President Joe Bassett told me determined their position on CODEX.
5. Members of the International Committee should be willing to take the time to READ any paper which they are endorsing, ESPECIALLY if it is endorsed by the FDA. This is ESPECIALLY true if they are going to represent the organization at a CODEX meeting. (In Berlin Karl Reidel told me that he hadn't read the NAS paper... but he felt comfortable grabbing his necktie and saying to me "John, its a matter of opinion whether or not this tie is ugly... but we're not talking about OPINION here, this is about SCIENCE."
NNFA rank and file members: you are being screwed. Your leadership has signed off on a paper endorsed by the FDA which they don't seem to have even READ.
This paper exists for one purpose, and one purpose only: to assist pharmaceutical interests in moving beyond the consumer generated impasse at Codex on Agenda Item number 5- Vitamins and Minerals.
FDA attorney Melinda K. Plaiser has lied to the House Government Reform Committee stating THE BIG LIE: that Codex has no effect on the domestic sale of vitamins.
TECHNICALLY- what she's saying is true. But in FACT, its a LIE. What do I mean by that? It is true that no country can be directly forced to adopt a Codex standard--- however if they DON'T adopt one, and can't justify it on a basis of "codex science" (eg- the NAS Risk Assessment Paper) to the new international court which has been set up to rubber stamp the drug cartel's agenda (The Dispute Settlement Body) trade sanctions can be imposed....
What happens THEN?
When the trade sanctions are imposed, it will unleash an ARMY of multinational lobbyists upon Capital Hill, just as happened when NAFTA and GATT were rammed down our throuts in the first place.
At that point, the amendment that I worked so hard to get inserted into the FDA Modernization Act of 1997 would be repealed by some obscure language inserted somewhere into some telephone thick piece of legislation that I'd never think to check. My amendment forbids the FDA to take any action which threatens to harmonize our laws. Plaiser is playing a game with the House Government Reform Committee, and CRN and NNFA are endorsing her position. Why? It seems very obvious why. There is a serious conflict of interest at work here.
When the DOJ heavily fined Roche, and BASF for engaging in illegal price fixing on the sale of vitamin raw materials http://www.usdoj.gov/atr/public/press_releases/1999/2450.htm
I emailed Michael Ford, Executive Director of NNFA and asked him if it didn't concern him at all that BASF and Rhone Poulenc were members of NNFA? (Rhone Poulenc was named by DOJ for taking part in the conspiracy which ripped off all manufacturing members of NNFA for 9 years-- and also ripped off consumers, however Rhone Poulenc was not charged because they turned informant.) I also challenged him on the issue of an employee of Warner Lambert chairing the NNFA International Committee, wishing to know why they didn't enforce their Conflict of Interest bylaw article 14.3
Want to know what his response was? "Cut the Crap" he said in the subject line of his return email.
Then in the body of his message he flat out denied that BASF or Rhone Poulenc were even MEMBERS of NNFA (!)
Here is his exact email message, copied verbatim for you to see, along with my reply (which he never replied to) Please help me do something about this - NNFA Members- If you don't INSIST that the Conflict of Interest Bylaw be ENFORCED, your business will be destroyed.
Next time you go into a health food store, ask if they're a member of NNFA, if they ARE, show them this, and ask them to call the front office demanding to know what is being done about this:
X-Mailer: QUALCOMM Windows Eudora Pro Version 3.0.3 (32)
Date: Fri, 21 May 1999 23:36:06 -0400
From: John Hammell firstname.lastname@example.org
Subject: Re: Cut the Crap: "BASF and Rhone Polenc are not Members of NNFA"
Cc: email@example.com, firstname.lastname@example.org
At 06:20 PM 5/21/99 EDT, you wrote:
>BASF and Rhone Poulenc are not members of NNFA. Stop spreading lies and taking up precious time.
I am looking at p.6 of the 1998 NNFA Membership Directory. In the left hand column, third entry down, it says:
BASF Corp. 3000 Continental Dr. N., Mt. Olive, N.J. 07828; Kevin Mulvehill; Mgr. of Food Premixes, 973-426-5319, fax 973-426-5399; 040;MS;1
Upon calling, I got the answering machine for BASF. A German voice came on, and initially said something in German, then in English. While the possibility exists that BASF did not renew their NNFA membership for 1999, they were definitly members of NNFA in 1998 when the last Codex meeting occurred of the Committee on Nutrition and Food for Special Dietary Use in Berlin Germany when NNFA took the rather bizarre position of backing FDA's Codex comments, including their submission of the highly unscientific NAS paper "A Risk Assessment Model for Establishing Safe Upper Levels for Nutrients" which greased the skids to enable the drug cartel to break past the consumer generated impasse which (until now) had been blocking the draft proposal on vitamins and minerals from moving.
Moreover, BASF was also unequivocally one of the mainstays of IG Farben, the drug and chemical combine which fueled Hitler's war machine during WW2. This is thoroughly documented by Matthias Rath, MD at http://www.rath.nl The Deutch bank was just forced to open their archives which proves that what I'm saying is true. The Deutch bank is STILL the bank of BASF, Hoechst, and Bayer today. Dr.Rath discusses efforts made by those and other companies to suppress health freedom world wide, via CODEX and other means, and my clients and I share his concerns. Please take the time to read Dr.Rath's Open Letter to the American Health Food Community, and please let us know what you think of it. Please also read his comments on the Chemnitz program. Please know that Dr.Rath used to work directly with the late Dr.Linus Pauling and he is a very honest man. Please know that Dr.Rath distrusts NNFA and CRN and states so publicly, citing reasons in his website. Please know that Dr.Rath conducted a demonstration with over 1000 demonstrators in front of the gate to the compound of the German Ministry of Health building where the Codex meeting took place last September in Berlin, and please know that he had billboards up all over Berlin protesting the criminal actions of the drug cartel, which seeks to destroy our industry.
I am looking at p.50 of the 1998 NNFA Membership Directory. In the left hand column, 11th item down, I find:
Rhone-Polenc Inc. 2802 Walton Commons W. Madison, WI 53718; Scott Bush; Commercial Devel. Mgr. 608-224-3117, fax 608-224-3103; 040; MS; 1. email
Upon calling, I got the answering machine for Rhone-Polenc, with Scott Bush answering. While the possibility exists that Rhone-Polenc did not renew their membership for 1999, they were definitly members of NNFA in 1998 when the last Codex meeting occurred of the Committee on Nutrition and Food for Special Dietary Use when NNFA took the rather bizarre position of backing FDA's Codex comments, including their submission of the highly unscientific NAS paper "A Risk Assessment Model for Establishing Safe Upper Levels for Nutrients"
This matter is of great concern to my clients and I, which is the reason we are seeking answers to some questions, and the reasons why we have taken the time and trouble to write to you with a lot of information that you and the vast majority of your members should truly be greatful for, and my effort to communicate really does not warrant the rude response characterized by the statement in the subject line which reads "Cut the Crap". Nor do I appreciate, or deserve to be called a liar, and I would appreciate an immediate apology. As the executive director of NNFA, you are very busy and don't have the time that I have to focus laser like on the CODEX issue.
The possibility certainly exists that I may see a bigger picture than you do with regards to this, and the same is true of Randy Dennin of Capsugel, (subsidiary of Warner Lambert), who is often traveling abroad on business trips which would cut into his time. (He's in Japan right now.) As the chairman of NNFA's International Committee, which made NNFA's decision to back CRN's and FDA's position on CODEX at the meeting of the Committee on Nutrition and Foods for Special Dietary Use, I feel that the possibility exists that I may see a bigger picture on this matter than he's had time to examine, and seek communication with him on behalf of my clients who are NNFA members. It seems strange to me that you would seek to discourage our inquiries.
My clients and I would like to know if NNFA has written bylaws which provide for Open Meetings, or not? We would appreciate it if you'd please let us know. An open meeting policy might state something along these lines:
1. Written notices of meetings effecting members will be posted in the Newsletter and in the Members Only section of the NNFA website with (x) number of days notice prior to the meeting, a complete description of the topic(s) for discussion, and a roster showing the members of the committee and how they may be contacted.
2. Any member may voice their views on the topics of discussion to members of the Committee prior to the meeting, and they may be read into the minutes of the meeting as well as discussed.
3. The minutes of the meeting are to be posted in the Members Only section of the NNFA website, along with the contact information of the people on the committee. Opportunity will exist for members to examine the position(s) adopted at the meeting, in order to comment on them and recommend changes prior to a rep from the Committee taking any sort of final action, (eg: such as submitting written comments to a Codex committee, or traveling to a Codex meeting.)
My clients and I would like to know if NNFA has this or some similar sort of Open Meeting policy written into the bylaws. If not, why not? If so, was the policy followed prior to the Codex meeting in Berlin in September of 1998? Do any minutes exist for the meetings of NNFA's International Committee which explain how they arrived at their position on Codex wherein they endorse CRN's position and FDAs? Please let us know about this.
My clients and I would like a copy of the list of members of the International Committee, which I've been told is not currently in the members only section of NNFA's website. Given the fact that BASF has plead guilty to Dept. of Justice charges that they engaged in price fixing, and given the fact that they just agreed to pay a fine of $225,000,000. for conspiring to fix, raise, and maintain prices, and allocate the sales volumes of vitamins sold by them and other unnamed coconspirator companies in the US and elsewhere, my clients have a right to know :
a)If BASF was on NNFA's International Committee,
b) If Rhone Polenc was on NNFA's International Committee, (they were also involved in the price fixing scam, but weren't charged because they cooperated with DOJ)
c) If any member of NNFA's International Committee had any business dealings with either BASF or Rhone Polenc, and if so, what was the nature of these dealings?
d) Do any members of NNFA's membership committee, (in addition to Randy Dennin, the Chairman who works for Capsugel, a subsidiary of Warner Lambert) work for a pharmaceutical company, and if so, does the company have any business dealings with pharmaceutical companies, and if so, has the company made a disclosure of any pertinent facts involving these dealings which could skew their position on Codex, or on other matters which effect NNFA on a whole? (Has Randy Dennin ever made any such disclosure, for the sake of insuring confidence that he did not advocate taking a position on Codex that could harm the business interests of smaller NNFA manufacturers?)
e) Are any members of NNFA also members of CRN? If so, which ones?
f) Do any members of NNFA engage in business with members of CRN? If so, have they ever disclosed any information about this to other members of NNFA in order to dispel any concerns that might arise pertaining to conflict of interest?
Given that CODEX threatens to create a situation that would favor the business interests of large pharmaceutical companies which show numerous signs of wanting to form mergers and acquisitions with dietary supplement companies, my clients and I feel that these are very valid questions, and would appreciate a full disclosure in this matter, as well as the opportunity for a thorough discussion regarding all points made in the message below, to which you so angrily responded:
Date: Fri, 21 May 1999 02:28:35 -0400
To: email@example.com, firstname.lastname@example.org
From: John Hammell email@example.com
Subject: NNFA: Please Wake Up! Vitamin Price Fixing: DOJ Nails BASF,Roche- Rhone Polenc Gets Off (CODEX Would Enable Them to Do the Same Thing- Cong. Burton Please Take Note)
IAHF LIST: BASF & Rhone Polenc are members of NNFA, and Roche is a member of CRN. Shouldn't these vitamin trade associations kick these corrupt drug companies OUT now that the Dept. of Justice has charged them with price fixing on vitamins which has been gouging purchasers for years to the tune of a zillion dollar rip off ?? (see DOJ press release below)
Do you see what I'm up against as I try to get an Oversight hearing on Codex? Why did NNFA support the FDA's (and CRN's) position on Codex? The question must be asked. Some of my clients are NNFA members, and they're very angry about this. They want to know exactly how NNFA arrived at their decision on Codex, and they want to know exactly WHAT companies were on NNFA's International Committee which made the decisions on CODEX. (Were either BASF or Rhone Polenc on the committee, or were they engaged in any business deals with any companies who were?)
Were ANY of the companies on NNFA's International committee engaged in merger talks with pharmaceutical interests, had any of them ever been in such negotiations, or were any of the companies on the committee lobbying the FDA to regulate herbs or other supplements as "drugs"? Are any of the companies on the committee partners with any offshore pharmaceutical companies? Did this Committee ask NNFA on a whole to review their decision to back FDA's position before it was finalized? Was NNFA's Codex decision discussed in the "Members Only" section of their website for all of their members to provide input or feedback on? Was NNFA's position TRULY in the best interests of ALL members of NNFA? It sure doesn't seem so to my clients, or to me, and there is clearly a need to look very closely at this situation.
CODEX will enable BASF, Roche, Rhone Polenc and other pharmaceutical interests to dominate the sale of high potency vitamins, which they would like to sell as "drugs", unless we (and NNFA) STOP IT. The sad part of this is that these companies have infiltrated our vitamin trade associations, and this is making it very hard for us to stop the Codex Juggernaut. We need an oversight hearing prior to the next Codex meeting on June 28th in Rome--we also need Judicial Review by the courts. The FDA is trying to hide behind an unscientific and heavily biased paper generated by the National Academy of Sciences which they illegally put on the table at Codex, over strong Congressional written objection, and in direct violation of current US law.
I can't get the raw data on the NAS paper,(titled "A Risk Assessment Model for Establishing Safe Upper Levels on Nutrients") or the CVs of its authors, because NAS isn't subject to the Freedom of Information Act, since they're a non profit organization and not part of the government. The NAS paper threatens to ban consumer access to high potency vitamins, except by prescription. Would a company like BASF mind this? It would enable them to make MORE MONEY for LESS PRODUCT, and DOWNSIZE at the same time.
Investors would LOVE IT. I'm sure Roche, and Rhone Polenc, and ALL the other pharmaceutical companies attempting to take us over feel similarly. Many of them will by at NutriCON '99 in Vegas right after the NNFA trade show to play "lets make a deal." It is my fervant wish, and that of my NNFA clients, that NNFA take an open stand AGAINST NNFA companies participating at NutriCON, which will cost $1200. just to get into (!) (Talk about raising the hurdles to keep out the public, small companies, and health food store owners!)
When the USA signed the Sanitary Phytosanitary Measures Agreement (part of NAFTA and GATT), we agreed to enter into an ongoing process of so called "harmonization" to emerging Codex standards. An international bureacracy called "The International Council on Harmonization" monitors compliance, and the Dispute Settlement Body of the WTO can impose trade sanctions if a country doesn't "get in line."
DSHEA doesn't currently protect us from this situation due to a flaw in the language of the drug definition- we could solve this problem by passing HR 1709, the Consumer Health Free Speech Act, if only NNFA and CfH would get behind it. Currently, FDA can remove a product if it feels that it poses either a "Substantial OR Unreasonable Risk" but HR 1709 would change the "OR" to an "AND"--- so the risk would have to be BOTH "Substantial AND Unreasonable" This would make it much harder for FDA to use the NAS "Risk Assessment" paper against us, which calls for a UL of just 35 mg on niacin, for example...(NAS made it clear to me that they thought I should have to get a Dr.s Prescription for niacin over 35 mg, which is, of course, absurd.)
The NAS paper also includes fraudulent data on fluoride, calling it an "essential nutrient" and they refused to remove their flawed data on fluoride, despite strong protests by the International Society for Fluoride Research, which asserted that NAS had selectively ignored their OWN data which clearly indicated the extreme TOXICITY of fluoride (!) I discussed this with Prof. Paul Connett of ISFR and of St.Laurence University. He is very angry because NAS ignored their letters about this for 16 months, forcing them to hold a DC press conference. NAS then did let him present the data before them- and he showed them THEIR OWN data, but their spokesman announced that they "didn't agree with him" and "their position on fluoride had been FINALIZED." Obviously NAS will do ANYTHING to keep from losing pharmaceutical research grants, and Congress must FORCE them to withdraw their paper from Codex before it kills people all over the world.
The FDA violated current US law at CODEX at the meeting in Berlin Germany, and so far, NNFA has done nothing to help me get an oversight hearing.
In '97 I worked very hard to amend the FDA Modernization Act to exempt dietary supplements from the "harmonization language". This made it illegal for the FDA to put the NAS Risk Assessment paper on the table, because it clearly advocates restricting high potency vitamins... that is "harmonization" to far more restrictive standards. I am discussing this with NNFA officials, and hope they will do the right thing once they can clearly see the issue. Joe Bassett, NNFA President is an honest man, and the vast majority of NNFA companies are also honest. They deserve to know the truth, and should not be kept in the dark on this. I'm sure they just didn't realize these things.
Has the Codex issue ever been discussed in the Members Only section of NNFA's website? Did NNFA's International Committee confer with the membership on a whole prior to deciding to back the FDA's position at the Codex meeting in Berlin last September? Why didn't NNFA or Citizens for Health file comments to the FDA's ANPR from the July 7, 1997 Federal Register, Vol.62, #129, pp.36243-36248 wherein FDA announced their intention to "harmonize" their regs to emerging Codex standards? (Attorney Will Daily apprised them at the same time that he apprise me. Our comments can be viewed at http://www.iahf.com under Codex Oversight.
There is a dire need here for not only Congressional Oversight in a timely fashion, but also Judicial Review as CODEX violates everything we hold dear with regards to representative government. We're represented at Codex by an FDA official, an unelected bureaucrat, and we're being effected by decisions made by other countries unelected bureaucrats, in an incredibly unfair system which excludes consumers, and which doesn't grant any more weight to a countries vote based on population size or even whether or not they even MANUFACTURE vitamins or not. The whole system is RIGGED in favor of the drug cartel, and is nothing more than a slick shell game with a predetermined outcome- thats just as crooked at the PRICE FIXING scam discussed in the article below. FDA has greased the skids at the last Codex meeting in Berlin by putting the NAS paper on the table.)
For additional insight, please see http://www.rath.nl and see Matthias Rath, MD's Open Letter to the American Health Food Community. He exposes BASF as part of IG Farben... along with Hoechst, and Bayer, and explains what you need to know about CODEX.... This price fixing scam illustrates the level of corruption we're up against. IG Farben fueled Hitler's war machine.
Lets hope NNFA kicks BASF out of their trade association along with Rhone Polenc. Lets hope CRN kicks out Roche. Lets hope NNFA takes a very close second look at this whole situation, so that those of my clients who are NNFA members don't get driven out of business by those who would sell out.
Swiss Executive Agrees to Plead Guilty and Serve U.S. Jail Time
WASHINGTON, D.C. (U.S. Dept. of Justice release)
A Swiss pharmaceutical giant, F. Hoffmann La Roche Ltd today agreed to plead guilty and pay a record $500 million criminal fine for leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins sold in the United States and elsewhere, the Department of Justice announced.
A German firm, BASF Aktiengesellschaft, also will plead guilty and pay a $225 million fine for its role in the same antitrust conspiracy, the Department said.
In separate one count criminal cases filed today in U.S. District Court in Dallas, the Department of Justice charged the corporations with conspiring to fix, raise, and maintain prices, and allocate the sales volumes of vitamins sold by them and other unnamed coconspirator companies in the U.S. and elsewhere. The cases also allege that the companies allocated contracts for vitamin premixes for customers throughout the U.S. and rigged the bids for those contracts.
The conspiracy lasted from January 1990 into February 1999 and affected the vitamins most commonly used as nutritional supplements or to enrich human >food and animal feed vitamins A, B2, B5, C, E, and Beta Carotene.
Vitamin premixes, which are used to enrich breakfast cereals and numerous other processed foods were also affected by the conspiracy, the Department said.
"These prosecutions demonstrate that we will not allow international cartels to prey on American consumers in our globalized economy," said Attorney General Janet Reno.
"Those currently engaged in or contemplating similar conduct should take note of the high cost of getting caught $500 million is not only a record fine in an antitrust case, but it is the largest fine the Justice Department has ever obtained in any criminal case."
The Department today also charged Dr. Kuno Sommer, former Director of Worldwide Marketing, HoffmannLa Roche Vitamins and Fine Chemicals Division, with participating in the vitamin cartel and for lying to Department investigators in 1997 in an attempt to coverup the conspiracy. Dr. Sommer, a Swiss citizen, has agreed to submit to the jurisdiction of the U.S. District Court in Dallas, plead guilty to both charges, serve a four month prison term, and pay a $100,000 fine.
"This conspiracy has affected more than five billion dollars of commerce in products found in every American household," said Joel I. Klein, Assistant Attorney General in charge of the Department's Antitrust Division.
"During the life of the conspiracy, virtually every American consumer paid artificially inflated prices for vitamins and vitamin enriched foods in order to feed the greed of these defendants and their coconspirators who reaped hundreds of millions of dollars in additional revenues."
Including today's cases, there have been nine prosecutions in the ongoing investigation of the worldwide vitamin industry and the latest in a series of international conspiracy cases filed by the Department's Antitrust Division in the last several years. Hoffmann La Roche, BASF, and Sommer are cooperating with the investigation. The Department also confirmed the announcement by Rhone Poulenc, SA, the French Pharmaceutical Company, that it has been cooperating with the investigation under the Antitrust Division's Corporate Leniency Program. Under the Leniency Program, a company may qualify for protection from criminal prosecution if it voluntarily reports its involvement in a crime and satisfies certain other criteria.
"The cooperation of Rhone Poulenc, together with information being provided by others, led directly to the charges filed today and the decision of the defendants not to contest the charges and to cooperate with our investigation," said Gary R. Spratling, the Antitrust Division's Deputy Assistant Attorney General for criminal enforcement. "Rhone Poulenc conspired with Hoffmann La Roche and BASF, but the information provided by Rhone Poulenc was what the Division needed to crack the largest antitrust conspiracy uncovered to date." Spratling also said that once Hoffmann La Rouche and BASF decided to step forward and accept responsibility for their actions, they each provided a level of cooperation nothing less than exemplary.
According to the charges, HoffmannLa Roche and BASF agreed with the world's other major vitamin manufacturers to suppress and eliminate competition in the U.S. and elsewhere. The criminal cases charge that Hoffmann La Roche, BASF, and Sommer, with unnamed co conspirators:
The two count criminal case against Sommer charges him with participating in the same vitamin conspiracy and lying to the Department of Justice by providing false, fictitious and fraudulent information to investigators when he was questioned about the vitamin conspiracy.
Klein said, "The prosecution of Dr. Sommer should send the message that foreign borders will not serve as a sanctuary from prosecution for individuals who conspire to steal from U.S. businesses and consumers. Those who lie, obstruct, and attempt to coverup the truth in our investigations will be prosecuted and punished for those crimes as well."
The defendants in all three cases are charged with violating Section One of the Sherman Act, which carries a maximum fine of $10 million for corporations, and a maximum penalty of three years imprisonment and a $350,000 fine for individuals.
Sommer was also charged with providing false statements to a government official, a violation of 18 U.S.C. § 1001, which carries a maximum penalty of five years imprisonment and a $250,000 fine.
The maximum fine for both corporations and individuals may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
At sentencing, the court will determine the appropriate sentence to be imposed under the U.S. Sentencing Guidelines and whether to accept the plea agreements and impose the agreed upon sentences. The dollars received from this fine will be deposited into the Crime Victims Fund, which is used to provide financial compensation and direct services to victims of crime and training and technical assistance for victim advocates, criminal justice professionals, and allied professionals across the country.
The fund is supported by fines paid by federal criminal offenders, not taxpayers, and is administered by the Office for Victims of Crime (OVC).
The three cases are the result of an investigation being conducted by the Antitrust Division's Dallas Field Office and the Federal Bureau of Investigation in Dallas.
May 19, 1999 By JOHN R. WILKE and SUSAN WARREN
Staff Reporters of THE WALL STREET JOURNAL
Federal prosecutors are in settlement talks with major drug and chemical companies over allegations that they engaged in a global criminal conspiracy to fix vitamin prices, people close to the investigation said.
The possible settlements, which may be announced within days, could involve huge criminal fines, these people said.
The talks follow a year long investigation into whether the drug and chemical companies met secretly to fix prices and allocate markets for such common vitamins as A, B, C and E.
Private suits against the manufacturers, which dominate the $3 billion a year vitamin market, claim that the alleged conspiracy has cost consumers and livestock farmers millions of dollars in overcharges over much of the past decade.
The investigation focused on the major players in the industry Roche Holding AG of Switzerland, which has 40% of the human and animal vitamin market; BASF AG of Germany, which has 20% of the market; and Rhone Poulenc SA of France, with 15% of the market - along with several smaller U.S. and Japanese companies, these people said. A federal grand jury in Dallas has been hearing evidence in the case for more than a year, and investigators subpoenaed the companies in May 1998.
Spokesmen for BASF, Roche and RhonePoulenc wouldn't comment on a possible settlement but said they are cooperating in the investigation. Roche said it is working "to try to resolve these issues" with the Justice Department.
A department spokeswoman wouldn't comment Tuesday.
Greater Financial Exposure
The alleged conspiracy was much broader than the recent cases of price fixing in feed additives, which yielded combined fines so far of $177 million from companies and individuals, the lawyers said. Some of the companies in plea negotiations could face criminal fines equal to double the amount of consumer harm or illicit gain, under federal guidelines, they said.
The vitamin makers could face even greater financial exposure from private lawsuits filed on behalf of companies that bought bulk vitamins and raw materials from the members of the alleged cartel; those damages would be trebled under antitrust law.
At BASF's annual shareholders meeting in Germany on April 29, the company's chairman, Juergen Strube, warned investors to expect weaker financial results this year as "a number of legal actions filed against us in the United States, in particular class action suits, pose the risk of burdening our earnings."
More than 25 private suits have been filed in four federal courts against the alleged conspirators since the first case was brought in U.S. District Court in Washington, D.C., early last year on behalf of a small farm products firm, J&R Feed Services Inc., in Cullman, Ala. The cases are likely to be consolidated in Washington.
Burden on U.S. Consumers
The first lawsuit alleged "illegal conduct by an international cartel that has dliberately targeted and severely burdened consumers in the United States," and alerted federal investigators to a possible conspiracy in vitamins A and E, said Robert Silver, a lawyer with the firm of Boies & Schiller in Armonk, N.Y., which filed the suit.
The cases were amended to include most human and animal vitamins, including bulk vitamin C and the B vitamins.
The suits allege that company managers regularly met in secret to plan production, carve up markets among themselves and fix prices around the globe, holding meetings in the Black Forest in Germany; Milan; Atlanta and other locations as far back as 1990. Overcharges as a result of the conspiracy ranged from 15% to 40% or more, the suits say; the price of vitamin A from one manufacturer doubled between 1990 and 1997, according to the lawsuits.
Most of the alleged conspiracies continued through at least 1998, except in the case of vitamin C, the lawsuits say. That conspiracy was broken by China's entry into the world market, which drove prices down sharply, the suits say.
In March, the Justice Department announced guilty pleas from five industry executives three from U.S. firm DuCoa LP and two from Canada's Chinook Group Ltd. and Swiss vitamin maker Lonza AG, which agreed to pay a $10.5 million fine and began cooperating with the department in the investigation.
The agency's vitamin investigation is the latest in a series of international price-fixing probes. In indictments and pleas over the past two years, scores of companies have paid large criminal fines in markets ranging from feed additives including charges against Archer Daniels Midland Corp. to fax paper, marine services and graphite electrodes.
In that case, SGL Carbon AG of Germany agreed last month to pay a record $135 million antitrust fine and plead guilty to participating in a global conspiracy to fix prices and allocate sales volume; that followed a $110 million fine against another conspirator in the same investigation.
The level of fines has been climbing sharply in recent years, antitrust lawyers say. "Fines today can affect the bottom line even of multi-billion-dollar companies," said Kevin Arquit, a former Federal Trade Commission official.
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