In this file:
· DeLauro challenges USDA officials about JBS corruption in meat industry
· Lawmakers seek probe into trade mitigation payments, JBS S.A.
DeLauro challenges USDA officials about JBS corruption in meat industry
Food Safety News by Marler Clark
February 13, 2020
Before 2007, before Brazil’s JBS S.A. bought Swift & Co. for $1.5 billion in an all-cash deal, there was not any question about a U.S. meat company being caught up in a breath-taking South American bribery scandal.
But since that transaction made the newly consolidated JBS Swift Group into the largest beef processor in the world, Brazil’s investigation of JBS, dating back to 2014, has raised a few eyebrows in the United States. The bribery scheme involved meat inspectors and other officials up to and including the president of Brazil.
Not until this week, did any U.S. elected official go public with their inquiry into the situation. U.S. Rep. Rosa DeLauro, D-CT, had an exchange earlier this week before the House Appropriations Subcommittee where she pressured the USDA Inspector General to investigate possible corruption involving JBS and again questioned why USDA is subsidizing the Brazilian concern.
Last November, DeLauro had called on USDA Secretary Sonny Perdue to direct the USDA IG to open a suspension and debarment investigation given the “well-documented” history of JBS’s corrupt and illegal behavior. A copy of Secretary Perdue’s response letter declining to take up the matter can be found here.
A full video of her more recent exchange with the IG can be found here. Following is the transcript:
DeLauro: Thanks so much Mr. Chairman and welcome to all. Ms. Fong, it’s great to see you again. I am concerned about the continued and substantial payments to U.S. subsidiaries of the corrupt Brazilian-owned and controlled meatpacker, JBS.
Trade Package, JBS has received a little over $100 million dollars in payments – that money I might add was supposed to have been for struggling farmers, ranchers who have been hurt by the Administration’s failed trade policies.
Unlike farmers and ranchers, JBS also receives payments on an annual basis and that’s through a USDA’s Agricultural Marketing Service. In fact, U.S. taxpayer has subsidized JBS to the tune of tens of millions of dollars over the past several years.
It’s a problem because according to the Federal Acquisition Regulation and related USDA policies, government contractors must have, and I quote, “present responsibility.” I’m not going to go through the explanation of that, it’s too detailed, but you know it. And accordingly, ‘the present responsibility’ can be impacted by fraud, bribery, other violations of federal laws.
JBS is currently under investigation by the Department of Justice for potential violations of the Foreign Corrupt Practices Act. This is because the Batista Brothers, the leading shareholders, have admitted to criminal acts, numerous criminal acts, consisting of the bribery of thousands of Brazilian government officials to obtain illicit loans from Brazil’s National Bank. The ill-gotten loans were then used by JBS to illegally enter and consolidate the meatpacking industry in the United States. You talk to cattle producers, you find out what they think about JBS, you’re not going to get a favorable answer.
November of last year, I wrote to Secretary Perdue urging him to open up a suspension and debarment investigation into JBS to determine whether the company meets the legal requirement of ‘present responsibility.’ Just very, very recently received a reply from the Secretary stating that he refuses to open such an investigation. And Mr. Chairman I would like to submit both my letter and his reply into the record.
So, no action. So, I make an assumption that the Secretary condones the use of taxpayer dollars in order to subsidize a corrupt, foreign-owned corporation engaged in illegal activity. So, Ms. Fong, I don’t know what kinds of conversations that you have had with the Secretary on this issue, the criminal allegations, do you take them seriously by this department? And I have two other questions, so I’d like a quick answer: How seriously are you taking these allegations?
Fong: We are aware of these allegations as reported by you and the media...
Lawmakers seek probe into trade mitigation payments, JBS S.A.
By Erica Shaffer, Meat+Poultry
WASHINGTON – Officials from the Office of the Inspector General (OIG) of the US Dept. of Agriculture faced calls to investigate the department’s trade mitigation program and JBS S.A., a high-profile recipient of program payments.
The issue was the source of intense discussion during an OIG budget hearing before the House Subcommittee on Agricultural, Rural Development, Food and Drug Administration and Related Agencies. Inspector General Phyllis Fong said her office is reviewing how USDA designed and implemented the Market Facilitation Program, which assists farmers and ranchers directly impacted by the administration’s trade war with China. But she declined to confirm that OIG is investigating JBS USA, a subsidiary company. JBS currently is under investigation by the US Dept. of Justice and the Securities and Exchange Commission.
“This is because the Batista brothers, the leading shareholders, have admitted to numerous criminal acts consisting of the bribery of thousands of Brazilian government officials to obtain illicit loans from Brazil’s national bank,” said Rep. Rosa DeLauro (D-Conn.). “The ill-gotten loans were then used by JBS to illegally enter and consolidate the meat packing industry in the United States.
“You talk to cattle producers; you find out what they think about JBS; you’re not going to get a favorable answer,” she added.
DeLauro said she wrote to Agriculture Secretary Sonny Perdue requesting an investigation into JBS, but Perdue declined her request on the grounds that an USDA investigation would conflict with current investigations underway in DOJ and SEC.
“How seriously are you taking these allegations?” DeLauro asked.
“We are aware of these allegations as reported by you and the media,” Fong said. “We are doing what is appropriate at this time.”
Fong noted that OIG is required by law to coordinate with the DOJ but declined to confirm an OIG investigation into JBS S.A. or trade mitigation payments made to the company. Fong did say that several audit reviews related to the program are in the works.
“The first piece of our audit in this area, the first audit results, will be coming out in the next few months,” she said.
An analysis by the Midwest Center for Investigative Reporting showed...