Bayer's Legal Woes Escalate With Probe Into Monsanto File
May 13 2019 - 3:08PM
Dow Jones News
By Ruth Bender
BERLIN -- Bayer AG on Monday sought to limit the damage after
French prosecutors said they had opened an investigation into
potentially illegal practices by Monsanto Co. before it was
acquired by the German chemicals and drugs giant.
The latest legal complication to engulf the company came hours
before Bayer announced it had sold one of the consumer-goods brands
it had put up for sale in an effort to cut costs and refill its
coffers.
French authorities confirmed the criminal probe came after local
media reported that, in 2016, Monsanto and a public-relations firm
it had hired had compiled a file of some 200 French personalities
and where they stood in the divisive debate over the alleged health
risks of herbicide glyphosate. If such data included sensitive
personal information that wasn't publicly available, the list might
be in breach of French and EU data privacy law.
"We apologize for what came to light here," Matthias Berninger,
Bayer's recently appointed head of public affairs and
sustainability told reporters. "This is completely
unacceptable."
Monsanto's past has been haunting Bayer ever since the German
inventor of aspirin completed the acquisition of the U.S. company a
year ago. Bayer faces some 13,400 lawsuits alleging Monsanto's
Roundup weedkillers, which contain glyphosate, cause cancer.
Bayer's share price has fallen nearly 40% since the company lost
the first two trials in court, prompting investors to revolt
against management at a recent general meeting. A jury in a third
trial is due to give its verdict any day. Bayer has said glyphosate
and Roundup are safe, and it is appealing the verdicts.
Bayer is also under pressure to fix problems in its other
businesses, from drugs to consumer care. The company late Monday
said it would sell its Coppertone sunscreen brands to German
consumer-care group Beiersdorf AG for $550 million, a first in a
series of asset sales Bayer is planning as part of a broader
restructuring.
Bayer said on Monday it was likely that Monsanto and U.S. public
relations agency FleishmanHillard had drawn up similar lists across
other European Union countries, suggesting it expected more
revelations could emerge.
FleishmanHillard said in a statement that it was "committed to
ethical conduct" and being "legally compliant in its activities,
including the handling of information."
Monsanto for years has been a target for environmental activists
who often criticized the company's aggressive lobbying tactics. In
addition to the legal liabilities Bayer is struggling to compute,
many investors fear Monsanto's controversial reputation, which they
think has now infected its new owner.
Mr. Berninger, a former Greens member of parliament in Berlin
whom Bayer hired at the start of the year, said he had discovered
some questionable Monsanto tactics in his first months on the job
that weren't in line with Bayer's ethics.
While he said the French probe had yet to determine whether the
list-making was indeed illegal, he hinted Monsanto might have
overstepped the line.
"When you collect data that is not publicly available about
individuals, a Rubicon is clearly crossed," Mr. Berninger said.
Bayer said it had also hired an external law firm to conduct its
own investigation into the practices and that it was fully
cooperating with French authorities. Mr. Berninger said that Bayer
was prepared to dismiss personnel if needed and that it had
suspended its work with the communication firm under
investigation.
While so-called stakeholder mapping -- the process of
identifying influential players and their stance on an issue -- is
common practice in public relations, French media reported that the
file included data that can't be collected without a person's
consent under European privacy law.
According to the reports, the list included the personalities'
stance on glyphosate and whether Monsanto was likely to be able to
influence them as it was seeking the renewal of the EU license for
the chemical.
French newspaper Le Monde filed a complaint in France after it
and public broadcaster France 2 obtained access to the list that
included some of its own journalists as well as researchers and
lawmakers.
Mr. Berninger said Monsanto had a contract with FleishmanHillard
to work across Europe at the time, which is why similar lists might
exist in other countries. French PR firm Publicis was also involved
in compiling the file, French media said.
Clément Léonarduzzi, president of Publicis consultants in France
said his company had launched an internal audit to investigate
possible illegal acts. Most of the people who had worked on the
project -- for which Publicis had been paid $20,000 -- had left the
group, he said.
--Nick Kostov contributed to this article.
Write to Ruth Bender at Ruth.Bender@wsj.com
(END) Dow Jones Newswires
May 13, 2019 14:53 ET (18:53 GMT)
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