| For
immediate release -- Tuesday, March 17, 1998. |
Borden
Dairy Paying $100,000 to Muscatine and
Davenport-Area School Districts in Bid-Rigging Case
DES MOINES-- Iowa
Attorney General Tom Miller said today that five eastern Iowa school districts
will receive $20,000 each from Borden, Inc., as a result of a federal case
that alleged bid-rigging in the sale of dairy products to public school
districts.
Miller's Office has provided assistance periodically to federal authorities in connection with bid-rigging investigations. The Borden case was handled primarily by the midwest office of the antitrust division, U.S. Department of Justice. Borden paid a total of $900,000 in restitution, including $700,000 divided among 93 central and west central Illinois districts, $100,000 to 13 Missouri districts, and $100,000 to five Iowa districts.
The Iowa districts receiving $20,000 each are Muscatine, Bettendorf, Davenport, North Scott and Pleasant Valley Community School Districts.
The federal case alleged an illegal bid-rigging conspiracy among several dairies, including Meadow Gold -- now owned by Borden, Inc. -- and Prairie Farms, based in Carlinville, Illinois. U.S. officials alleged that the companies illegally allocated territories so that competition would be avoided and different dairies would regularly win the bid at various districts.
"Bid-rigging and price-fixing harm all consumers by artificially raising prices," Miller said. "Anti-competitive activity employed against schools is particularly objectionable because it puts more strain on public budgets and limits the funds available for worthy projects. Bid-rigging subverts competition and undercuts our schools' ability to get the best product at a fair price."
The bid-rigging conspiracies ended with the 1989-90 school year, according to U.S. officials. A criminal case against Prairie Farms ended with the dairy pleading guilty and paying a fine of $1 million, the maximum fine possible for a bid-rigging conspiracy ending in 1990. Borden/Meadow Gold applied for amnesty early in this phase of the government's investigation, cooperating with investigators and accepting a requirement to pay restitution to the school districts.