Seaboard Corp. had no comment on Tuesday about a report alleging that the Justice Department is investigating whether the Merriam-based shipping and agriculture conglomerate did business with a Lebanese family with apparent ties to terrorism.
A front page story in the Wall Street Journal said federal investigators, as part of a broad criminal probe, have looked into Seaboard’s flour operation in Africa and whether it tried to conceal business dealings with the Tajideen family.
A Treasury Department memo from 2010 said Kassim Tajideen, his brothers and business partners had financial ties to Hezbollah, a Shiite Muslim militant group based in Lebanon.
“We do not have any comment at this time,” said a woman answering the phone at Seaboard CEO Steven Bresky’s office on Tuesday.
The Journal story claimed Seaboard did business with Congo Futur, an African food-import business owned by the Tajideen family. Congo Futur shows up on a Treasury Department list of entities and individuals with apparent connections to terrorism and narcotics trafficking. U.S. companies are barred from doing business with entities appearing on such lists.
The Journal, citing anonymous sources and documents, reported that Seaboard sent payments to Congo Futur through middlemen up until 2014. That’s four years after the Treasury Department added Congo Futur to its blacklist.
The company denied the allegation in the Journal’s story, saying it had stopped doing business with Congo Futur before 2014 and didn’t enter into any contracts with the company after U.S. authorities blacklisted it. Tajideen and his brothers Ali and Husayn told the newspaper that they hadn’t heard of Seaboard and denied any ties to terrorism.
The story highlighted difficulties that U.S. companies face doing business internationally while also complying with laws meant to choke off money to terrorist groups, drug traffickers and companies under U.S. sanctions when shadow companies and go-betweens form to disguise true partners in a transaction.
Seaboard is both one of the Kansas City area’s largest and most quiet companies. Based in an office building in Merriam near the U.S. 69/67th Street exit, the company had net sales of $5.59 billion in 2015 and was No. 417 on the Fortune 500 list. Seaboard trades on the New York Stock Exchange, but rarely grants interviews or comments publicly about its business operations. It has divisions in commodity trading, pork, shipping and turkey, where it counts Butterball as one of its brands.
The company employs 10,772, not counting subsidiaries and affiliates. About half of that number work in the U.S.
Seaboard has far-flung offices in countries ranging from Ecuador to Singapore. Seaboard’s Commodity Trading and Milling Division has a stake in a bakery business in the Democratic Republic of Congo, where Congo Futur has its headquarters in that nation’s capital of Kinshasa.
Seaboard disclosed in its most recent quarterly report that it received a subpoena on April 29, 2015, from the Justice Department’s Asset Forfeiture and Money Laundering Section seeking records related to 37 foreign companies and five individuals. Little more than a month later, the company received two additional subpoenas “related to a certain customer.”
It’s not clear whether the subpoenas described in the quarterly report are related to the allegation in the Journal story. Seaboard said in the filing that the Justice Department’s attorney conducting the investigation informed the company in 2015 that it was not the target of the investigation. On June 6, it received a request for additional information related to an affiliate of Seaboard, which retained outside counsel and was said to be cooperating with the government’s investigation.
Companies found to be doing business with blacklisted entities risk civil penalties. If they knowingly do business with banned companies and individuals, criminal penalties become possible.
Sean Murray, a partner with Kansas City law firm Miller & Co. who advises clients on international trade laws and compliance, said the burden to avoid dealings with blacklisted companies falls on any domestic business that exports products.
Murray said the number of prohibited entities runs into the “several thousand.”
More difficult to establish is whether a company is possibly conducting business with a prohibited entity through intermediaries.
“It can be a real challenge to see through middlemen and front companies,” Murray said.
Murray and his firm do not represent Seaboard.
Several federal agencies maintain lists of prohibited entities. Restrictions can apply to people or companies with ties to terrorism, drug trafficking, past violations of U.S. export controls or that exist in countries under sanctions by the U.S.
The Treasury Department is in the midst of consolidating the various different blacklists. Its website features a searchable database, upon which both Tajideen and Congo Futur appear.
But companies come on and off the list frequently. Murray said exporting companies often pay freight forwarders or software companies to analyze whether their customers appear on domestic restricted lists. Others search lists kept by the United Nations, Interpol or other governments.
“I do think the (Wall Street Journal) story points to how difficult it can be for a company trying to do the right thing that can make mistakes,” Murray said.