Former Coke employees get immunity in federal probe of Burger King tests

<p>Federal investigators have granted immunity to at least two former Coca-Cola employees in return for testimony about how officials of the beverage company rigged marketing tests at Burger King four years ago, The Atlanta Journal-Constitution reported Thursday.</p><p>That and testimony this week before a federal grand jury indicated that prosecutors are considering criminal charges in the case.</p><p>A spokesman for the U.S. attorney's office declined to comment Wednesday, and Coke spokesman Ben Deutsch reiterated that the company is continuing "to cooperate with the authorities," the newspaper said.</p><p>Receiving immunity are Ed Zambie and Beth Sturm, attorneys familiar with the case told the newspaper.</p><p>Coke admitted undermining the test and said the employees involved were disciplined. The company offered Miami-based Burger King and its franchisees $21 million as part of an apology, and the Coke executive who oversaw the division responsible for the test stepped down a year ago.</p><p>In October, Coke agreed to pay $540,000 to Matthew Whitley, a former company finance manager, to settle a whistleblower lawsuit that led to the criminal investigation. Whitley sued in May 2003 for wrongful termination and accused Coke of falsely inflating the popularity of Frozen Coke at Burger King restaurants in Virginia during the test marketing.</p><p>The U.S. Justice Department and the Securities and Exchange Commission have been conducting separate investigations of Coke that have focused on, among other things, the Burger King case, allegations of accounting irregularities at the company's Japan unit and accounting issues with some suppliers, including Lancer Corp. of San Antonio.</p><p>While a decision on whether criminal indictments will be sought does not appear imminent, according to attorneys and others familiar with the case, some aspects of the investigation have intensified in recent weeks.</p><p>In the Burger King case, Coke acknowledged in June 2003 that a midlevel executive, John Fisher, had approved a plan to spend up to $10,000 to boost demand for Frozen Coke as part of a test conducted at restaurants in Richmond, Va.</p><p>According to an internal memo written by Coke employee Bob Bader in March 2001, the Richmond test was not producing the desired results when it first began.</p><p>Bader is a focus of federal prosecutors, according to an attorney familiar with the investigation, but it is unclear if his memo has been reviewed by the grand jury.</p><p>Bader's memo, obtained by The Atlanta Journal-Constitution, said a team of Coke employees _ including Fisher, Zambie and Sturm _ decided to expand the program.</p><p>___</p><p>HASH(0x2866340)</p>