Menasha Corp. is paying the Panama Canal Commission $56,156.69 to settle an investigation into corruption involving a former Solidur Plastics Co. representative. Menasha of Neenah, Wis., bought Solidur in February 1993.
Documents obtained from the commission claimed that during a period in the early 1990s, prior to Menasha's purchase, a Solidur representative paid a commission procurement officer illegal contingent fees to change specifications to use only Solidur ultrahigh-molecular-weight polyethylene products on certain contracts.
Glenn Holcombe, associate general counsel for Menasha, said the Poly Hi Solidur International division discovered the problem about a year ago when the commission declined to consider its bid for some sheet UHMW products it sells to the commission for various uses in construction. UHMW PE is used extensively in dock fender facing and other marine applications.
``We were very surprised and a little concerned when we learned of this situation,'' Holcombe said.
Evidence gathered in the com-mission's investigation found that Solidur had employed the services of an agent who applied ``improper influence'' on commission employees and officials, according to a letter from the commission to Menasha's Poly Hi Solidur International unit.
The letter did not identify the Solidur agent, and Holcombe said Menasha does not know the identity of the individual, or whether the agent was a direct employee or sales representative.
The investigation conducted by the commission determined that Solidur violated the law concerning contingent-fee relationships in seven commission contracts and various purchase orders.
The commission said the illegal fees were then added to the original price of the government contracts.
As a result of the investigation, the commission demanded payment of $56,156.69 in fines, the total amount paid by Solidur as illegal contingent fees to the procurement officer.
The commission requested that in addition to paying the fine, Menasha take other remedial measures internally to ``ensure future compliance'' with the commission's procurement regulations.
Holcombe said that in April Menasha decided to pay the fine under protest in order to restore its bid position with the commission.
Holcombe said he believes Menasha's bid status has been restored, although he said he has not received any official approval. Commission officials did not respond to questions from Plastics News.
A letter written in May by Theodore G. Lucas, the commission's deputy general counsel and procurement executive, expressed concern that many of the management personnel of the ``old company [Solidur Plastics Co.]'' who ``played a personal and substantial role'' in the payment of the illegal contingency fees, remain in management with the ``new company.'' Lucas expressed doubts that Menasha had taken sufficient steps internally to ensure full compliance with the commission's rules and regulations.
Holcombe said he has assured Lucas that management changes have been implemented and employees instructed on proper procedures required to comply with the commission's rules.
Asked if Menasha had plans to pursue reimbursement from former Solidur Plastics Co. personnel, Holcombe said that the company plans ``to review warranties and indemnities'' in the asset purchase contract and ``take whatever action is deemed appropriate.''