immediate release -- Tuesday, March 17, 1998.
Dairy Paying $100,000 to Muscatine and
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
Davenport-Area School Districts in Bid-Rigging Case
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.
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."
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.