Justice Department Orders Largest Criminal Antitrust Fine
WASHINGTON (AP) _ Dyno Nobel Inc., one of the world’s largest commercial explosives makers, agreed today to pay a $15 million fine, the largest ever in a criminal antitrust case, the Justice Department said.
The Salt Lake City-based company pleaded guilty for conspiring to fix the prices of commercial explosives sold in Kentucky, Illinois and Indiana, and for eliminating competition in the sale of commercial explosives to three limestone quarries in central Texas.
The $15 million fine is the largest from a single defendant in a criminal antitrust case, according to the Justice Department. Last month, ICI Explosives USA Inc., a Dallas explosives company involved in the same case, agreed to pay a $10 million fine.
``Today’s record $15 million fine, which topped the recent $10 million fine, is a real one-two punch against criminal price-fixers,″ said Anne K. Bingaman, assistant attorney general in charge of the Antitrust Division. ``The message is clear: if you engage in criminal price-fixing activities you will face tough tough penalties.″
Dyno Nobel, a wholly owned subsidiary of Dyno Industrier A.S., said the company had appointed a new management team, headed by Douglas J. Jackson, to turn the company around.
``DNI does not condone violation of the antitrust laws, or any laws, and has taken necessary steps to prevent any such violations,″ Jackson said in a statement. ``Although it was an extremely difficult decision, DNI elected to enter into the settlement agreement in order to avoid the cost and distraction of an ongoing investigation.″
The case was filed in U.S. District Court in Dallas, charging Dyno Nobel with conspiring from the fall of 1988 to mid-1992 to fix prices of commercial explosives in western Kentucky and parts of southern Indiana and southern Illinois.
The company also was charged with conspiring from the fall of 1990 through 1992 to eliminate competition in the sale of explosives in central Texas _ to the Lafarge Corp. quarry in New Braunfels, the Redland Stone quarry in San Antonio and the Texas Crushed Stone quarry in Georgetown.
``Dyno Nobel Inc. and its co-conspirators carried out the conspiracy by discussing and agreeing to increase prices for certain commercial explosives and agreeing upon bids or quotes to certain customers,″ the Justice Department said.
The sale of commercial explosives, such as dynamite and ammonium nitrate mixed with fuel oil, is an estimated $1 billion industry in the United States. The mining, construction and oil and gas industries are the primary buyers.
The Antitrust Division also filed a one-count case charging Mine Equipment & Mill Supply Inc., a commercial explosives distributor in Dawson Springs, Ken., with participating in the conspiracy as well.
Bingaman said all the cases resulted from an ongoing grand jury investigation with the assistance of the FBI.
The maximum penalty for a corporation convicted of a violation of the Sherman Act is a fine of $10 million per count, or twice the financial gain by the company or twice the economic loss suffered by victims.
Gary R. Spratling, deputy assistant attorney general in charge of antitrust criminal matters, predicted similar future investigations would result in even heftier penalties.
``You can expect to see higher and higher fines as we crack larger and larger conspiracies,″ Spratling said.