The chairman of agribusiness giant Monsanto demanded Monday that his counterpart at DuPont - his firm’s leading competitor in the seed business - appoint a special committee to investigate what he said was a pattern of covert attacks on Monsanto’s business practices by DuPont.
Hugh Grant, chairman of Monsanto Co., accused DuPont of using third parties to attack Monsanto, activities which he said “were misleading to the public and a serious breach of business ethics far beyond honest competitor behavior.”
He made the request for an investigation by a committee of DuPont’s independent directors in a letter to Charles O. Holliday Jr., chairman of E.I. du Pont de Nemours and Co.
He accused DuPont of being “dishonest, disingenuous and downright deceitful.”
An attorney for Monsanto said the tactics used against his company included forged letters to Congress, misinformation, attempts to improperly influence public officials and support for a special interest group which opposed Monsanto.
A DuPont spokesman said the company had not received the letter.
“We fully expect Monsanto to continue the campaign of diversion for as long as they feel things are not going their way on the merits,” said Anthony Farina.
He said DuPont is not alone in its concern that Monsanto’s business practices are reducing competition in agriculture.
“DuPont along with other companies, farmers, nonprofit groups and government authorities are all active participants in the important public discussion about competition in agriculture,” said Mr. Farina.
The Monsanto letter is the latest skirmish in a battle between Monsanto and DuPont for control of the seed business.
In 2006 and 2007, DuPont tried unsuccessfully to block Monsanto from buying the nation’s largest cotton seed supplier, Delta & Pine Land Co.
In May, Monsanto filed a lawsuit against DuPont for patent infringement and DuPont countersued, accusing Monsanto of being anti-competitive.
“Our response to Monsanto’s latest lawsuit speaks for itself,” said Mr. Farina. “It makes clear why Monsanto’s business practices are illegal and why Monsanto’s anti-competitive business practices hurt farmers, consumers and independent seed companies. We look forward to having these issues decided in court, where Monsanto initiated this.”
Mr. Farina accused Monsanto of running “a very aggressive and misleading campaign” against DuPont since the lawsuit and that DuPont wanted “to set the record straight.”
He said DuPont would not debate the issue in the media.
Monsanto officials claim that DuPont has waged a war of dirty tricks on Monsanto to maintain its market share in the crop biotechnology business.
“What is going on now is a very well organized covert campaign by DuPont to hurt us,” Scott Partridge, Monsanto’s chief deputy general counsel, said in an interview with The Washington Times. “They attack us any way they can.”
He accused DuPont of running a “campaign to damage us with former customers and policymakers.”
Mr. Partridge said that Monsanto had hired the law firm of Orrick, Herrington & Sutcliffe to “uncover and shed light on the depth and extent of DuPont’s covert attacks on our business through third parties.”
Lanny J. Davis, one of the Orrick partners involved in assisting Monsanto, is a specialist in crisis management and served as a special counsel to President Clinton on campaign-finance investigations and other legal matters. Mr. Davis also writes a weekly column for The Times.
Monsanto and Orrick provided a set of documents to The Times.
The current dust-up between Monsanto and DuPont goes back to DuPont’s efforts to stop Monsanto’s purchase of Delta & Pine Land.
DuPont wanted the Justice Department, which was reviewing the purchase, to reject it on the grounds that it would give Monsanto, their main competitor, an unfair advantage in selling genetically engineered traits to seed companies like Delta & Pine Land. The genetic traits are used to protect cotton from insects and weeds.
In its efforts to block the purchase, DuPont used former Sen. Tim Hutchinson, Arkansas Republican, and the law firm where he works, Dickstein Shapiro LLP, to lobby.
As part of the lobbying campaign, Mr. Hutchinson forwarded a batch of seven letters opposing the deal to his former colleague, Sen. Saxby Chambliss, Georgia Republican, who was a leader of the Senate Agriculture Committee, according to documents provided by Monsanto.
The St. Louis Post-Dispatch reported in 2007 that three of the letters turned out to be fake: In two cases, the people whose names appeared on the letters said they knew nothing about them. A state representative, whose name was on the third letter, said a staffer had mistakenly sent it without his knowledge.
A Chambliss spokesman said he never took any action as a result of the letters, either for or against Monsanto’s purchase of Delta & Pine Land.
Ultimately, the Justice Department approved the sale but made Monsanto divest itself of a smaller seed company it owned. Mr. Hutchinson and a spokesman for the Dickstein firm did not respond to phone messages seeking comment.
Mr. Partridge said the Dickstein firm told him they did not know the letters were forged.
Another Dickstein partner, Bernard Nash, also used his connections to try to help DuPont in its fight with Monsanto. Mr. Nash runs what his firm boasts is the nation’s largest and premier practice dealing with state attorneys general.
Mr. Nash’s biography on the firm Web site says: “Most recently, he has led DuPont’s efforts to combat increased agricultural concentration and anticompetitive business practices with respect to critical farm chemicals and biotechnology. This strategy involved engaging State Attorneys General, Congress, federal agencies, farmers, and grassroots organizations on the harmful impact of anticompetitive mergers and monopolistic conduct.”
Records show that 13 state attorneys generals wrote the Justice Department opposing the Monsanto purchase of Delta & Pine Land in August 2007.
One of the states that objected was West Virginia, which is not known for growing cotton. In October 2007, Mr. Nash, his wife and two adult daughters each gave $1,000 to the campaign of West Virginia Attorney General Darrell McGraw. Four other Dickstein lawyers gave $500 each.
Mr. Nash has donated to eight of the other state attorneys general who objected to the purchase. His donations ranged from $500 to $2,500.
About the time Monsanto concluded its purchase of Delta & Pine Land, a number of state attorneys general, including some of those who wrote to the Justice Department, requested documents from Monsanto as part of a civil antitrust investigation.
Mr. Partridge said he thought the investigation began after DuPont complained about Monsanto. He said Monsanto cooperated with the investigation and has been told that the state attorneys general have no further questions but the probe remains open.
Mr. Farina said that “many other organizations and individuals share our concerns, including a large group of state attorneys general that continues to investigate Monsanto’s business practices today. Monsanto has been unable to persuade state AGs to drop the investigation during the last year.”
A spokesman for the Texas attorney general’s office, which has been coordinating the probe, said the office does not acknowledge investigations of any kind. Mr. Nash did not return phone messages.
Mr. Farina said the Obama administration may also be concerned about competition in the seed industry.
“Just last week, the U.S. Attorney General [Eric H. Holder Jr.] and the U.S. Secretary of Agriculture [Tom Vilsack] announced unprecedented joint hearings to study competition in agriculture, including seed traits,” he said.
Mr. Partridge said the campaign against Monsanto is continuing, pointing to a conference held earlier this month in St. Louis by the Organization for Competitive Markets (OCM), a farmer advocacy group which is critical of Monsanto.
In his letter to DuPont, the Monsanto chairman cited a recent article in the St. Louis Post-Dispatch that reported that DuPont had helped fund the group. He said the report illustrated “DuPont’s covert use of a special interest group to attack Monsanto’s seed business.”
Fred Stokes, OCM’s executive director, would not say whether DuPont was a donor to his group, which has annual budget of about $100,000. He said they get money from members and from donors who share their concerns. Mr. Farina confirmed that DuPont had supported the group, as it does for a number of organizations that share its views.
“We don’t like monopolies,” said Mr. Stokes. He said that Monsanto had a “virtual monopoly” in the seed business.
He said his group was formed 11 year ago and that “we have fought every big agribusiness.”
Mr. Stokes said the conference, called “Confronting the threats to Market Competition,” spent about a quarter of the time focusing on Monsanto and concentration in the seed business. He said the rest of the time was spent on other issues such as food retailing.
The speakers at the conference included a number of federal government officials such as Philip J. Weiser, deputy assistant attorney general for the antitrust division of the Justice Department. Mr. Weiser’s speech dealt with the administration’s approach to antitrust issues and historic cases.
“We accepted the invitation to speak at the conference as we saw this as an opportunity to highlight the Department of Justice and USDA’s recent announcement to hold unprecedented joint workshops about competition and regulatory issues in the agriculture industry,” Justice spokeswoman Gina Talamona said.
“We want to hear from every interested party, including farmers, ranchers, consumers and agribusinesses about the important issues in this industry. We look forward to the open dialogue the workshops will provide.”
The OCM, which describes itself as a “think tank” has started a Seed Concentration Project to “bring fairness and competition back to the U.S. seed industry.”
It points out on its Web site that Monsanto “controls a high percentage of the global seed market and continues to increase its dominance by acquiring or merging with a significant number of companies in its industry.”